Most business leaders agree that innovation is important. Unfortunately, they’re not happy with the results and don’t know how to improve. What’s going wrong? And what are the most successful corporate innovators doing that others are getting wrong?
Innovation is an essential part of long-term, sustainable success, and most business leaders understand this. What’s more elusive — especially for established companies in highly regulated industries — is the ability to turn ideas into successful innovation projects.
We already have data proving that innovative companies grow faster, in both revenue generation and overall valuation. This data justifies the growing investment in innovation among corporate enterprises. Unfortunately, there’s a pretty low success rate when it comes to corporate innovation projects.
It’s not that business leaders don’t understand that their business models are at risk for disruption. Indeed, there’s a long history of startups putting larger, more established competitors out of business with their ability to innovate, iterate, and adapt to market needs. Many business leaders might not realize that nearly three-quarters of the most transformative innovations have come from employees working in larger organizations over the last three decades.
Perhaps one of the biggest reasons established businesses struggle to innovate effectively is because they tend to focus on incremental innovation. Rather than trying to find the next big breakthrough innovation, they’re looking for small improvements to their existing service or product. No wonder less than 10% of business leaders said their innovation efforts and projects were successful.
The good news is that corporate enterprises are getting serious about improving their innovation capabilities. Many organizations are starting to task a specific person with ownership of innovation projects and initiatives. Whether this person is an executive, an innovation manager, or an outside consultant, having a champion to own, drive, and manage corporate innovation projects improves success.
Organizations that include innovation in the strategic planning process are also more likely to have more successful corporate innovation projects. Not only does having a documented innovation strategy help businesses focus and prioritize innovation projects, it also improves the chances of successful project execution.
Watch out for these common roadblocks to innovation success
It’s no surprise to see risk-aversion, long development times, and idea prioritization on the list of corporate innovation blockers. These blockers highlight the reality that most established businesses are structured to suppress genuinely transformative innovation. If corporate innovation programs are going to succeed, they need space to fail. But why would an established industry leader want to take a risk on an unproven new idea when the success so often feels hit-and-miss?
The answer is for the big wins. Smart innovation strategy includes building a portfolio of innovation projects knowing that some will flop, while others have the potential of becoming the next big thing.
Orgs that include innovation in strategic planning are more successful.
The most successful corporate innovation leaders understand that they need an innovation strategy, and that strategy must align with the overall business goals. They also know that they can’t just innovate for the sake of innovation. They also need to become “need seekers” who focus on identifying gaps in the market and being first to fill the void with innovative solutions.