There’s probably no better illustration of just how important it is to keep innovating than to consider what happened to Venice and the incredible empire that it built, and then lost. The story of what happened and what as business founders, leaders and change agents we can all learn from it, is well set out in the linked article by Piero Formica, first published in the Harvard Business Review on 17 January.
I’ve found that there are 5 essential things to remember when it comes to innovating successfully. I’ve set them out below.
1. It’s not a tick in the box and you can’t stand still
Innovation is not a tick-box activity or a finite task. You can’t just innovate and then stop and do something else. Well… you can, but not if you want your business to endure and to really attain success.
Innovation is an ongoing commitment. It’s a marathon, not a sprint. You’re likely to fail and make mistakes before you get it just right.
And if you stop, then in almost every case, someone else will start to eat your market share. It’s that simple. The pace of business across all sectors today is not getting any slower or less competitive.
2. It’s usually not an ‘off-the-shelf’ fix
It’s also rarely the case that you can innovate in isolation of the rest of your business. I see this all the time where large businesses especially, approach innovation with the expectation that a bit like a magic pill or sticking plaster, it can be bought and ‘plugged in’ – a classic example being acquiring a new piece of technology that largely improves back office efficiency, like a new account management system or ebilling. Box ticked, right?
Hmm.. Tread really carefully with this kind of approach to ‘innovation’.
It might be a new step for your business model. However, what is not innovation in the eyes of your customers is innovation that’s not worth shouting about. And your customers may have a very different perspective on innovation to you.
For example, if your investment does not
– improve your customers’ experience in trading with you, and
– provide them with better solutions for their genuine and most important needs, and
– demonstrate to them that they should (continue to) choose you over your competition
then think very carefully about how you mention this investment to them.
Think especially carefully about how it may be reflected in your prices to them as they will most likely resent any increase in price without a counterbalancing improvement in what they consider they’re getting for their money.
And that’s even before they compare how competitive you are based on what your rivals may be offering.
3. When is innovation competitively distinctive?
Innovations that improve your efficiency and that may make your business more profitable longer term are great, and of course you probably can’t afford not to invest in them, particularly where your rivals are doing so.
But these arguably necessary investments are not points of competitive distinction unless they enable you to materially improve what you already offer your customer.
Remember that your customer will expect you to be competitive and to stay abreast of developments, to be efficient and to make a reasonable profit as a matter of good business management. Those are ‘hygiene’ factors, part of your everyday operational set up.
So be wary of any one who tells you that a particular new product or approach is a ‘quick fix’ to satisfy your need to demonstrate innovation and distinctiveness. Make sure you can at least answer the three customer requirements above before you start talking to customers about your latest spend on operations.
4. People and the right business culture drive innovation best
Innovation must be a serious commitment on the part of a business and it must be driven right from the top. Unless it is a leadership priority, it will never really be effective at any level.
This means that innovation needs to be facilitated and nurtured in an environment where individuals are encouraged to think and share their ideas, to experiment and to seek feedback and conduct research. There are loads of ways to achieve this – and many of them cost very little to nothing, such as employee brain-storming sessions, customer feedback sessions and cross-functional workshops.
The best approaches are also non-hierarchical, inclusive and collaborative, across employees, other businesses and sectors.
Some of the best inspiration I have ever drawn has been from very different businesses to the ones in which I have worked and led. Some of the best ideas I’ve heard have come from the newest and least experienced members of staff who have a different and often fresher way of thinking. And some of the best collaborations have been triggered by wholly unexpected conversations that almost inevitably happen when bright, empowered people sit down, share a coffee and simply compare notes and play ‘what if?’
5. Don’t be an island
The responsibility for the evolution of a business may nominally sit with its leadership, but those businesses who continually perform best, and who consistently stay ahead of the pack, are those who share that responsibility and the opportunity with everyone who works within that business.
One of the best ways to ensure that you don’t start to sink and gift others with the chance to rise, is making sure that everyone who works with you is thinking about how your business could improve, or change, or exploit new opportunities.