It would seem we’re facing a profound lack of innovation readiness, inaction and clumsiness, and these are the primary factors holding back growth and market opportunities. Let me explain further.
So much information about innovation has come across my desk lately, it’s been quite extraordinary. If themes emerge in waves, this is a tsunami – albeit a good one and it presents exciting opportunities.
Today I’m sharing insights into these themes, key pieces of research, as well as innovation roadblocks and some strategies you can deploy to tackle them.
1. CEOs are not driving the innovation agenda or adequately measuring it to support growth
While innovation remains a top three strategic priority, only 3% of companies are ready to innovate in today’s environment, according to a new Boston Consulting Group (BCG) study.
It would appear post-pandemic macro-economic factors are still creating significant uncertainty and businesses are stuck in the benign motions of BAU and this is stifling innovation and growth.
The focus has shifted from medium term value creation and growth to really short term agility (aka survival).
Sound familiar?
The result?
Innovation has fallen off a cliff and companies have become less efficient, less effective and less tied to their strategic priorities.
And yet there’s a paradox in this data: companies have never placed a higher priority on innovation.
Innovation is a process steeped in failure. You simply must test, fail and learn in order to find the best ideas. The trick is to fail fast, learn and have another go.
You must innovate your way to sustained or exponential growth, pivoting and refreshing BAU along the way to stay relevant.
Max Mara Fashion Group Creative Director, Ian Griffiths, summed up the need for innovation well, he said, “People think of us as a minimalist brand, but as a designer, too much minimalism can become deadly dull. In the end, all you can do is shorten or lengthen a hem by two or three centimetres. Creativity dies.”
Most CEOs know innovation is crucial to growth and longevity, without it boredom creeps in and you lose momentum, talent and productivity.
They also know growth is very hard to achieve without the right team, motivation and leadership focus.
2. Not hiring or talking to the right people
This lack of innovation readiness is further compounded by a lack of interest in hiring the right talent.
Korn Ferry research has found recruiters are strongly biased against hiring entrepreneurs – the very people who are known for being innovative.
They’ve found leaders constantly say they want employees with innovative ideas who can revolutionise products and processes, but for some reason these candidates can’t get job interviews.
And the more disrupted an industry is, the more it needs workers who think like entrepreneurs, because entrepreneurial-minded workers tend to cope better and remain engaged during periods of significant change.
Which is constant.
So maybe they’re not selling it well enough…?
Which brings us to…
3. You have the wrong pitch
How do you know if you have the wrong pitch?
When you consider that innovation uptake is based on people being able to effectively pitch an idea, if your ideas are being rejected, it’s because you have the wrong pitch.
Jason Feifer, editor in chief of Entrepreneur Magazine, articulates this extremely well in his newsletter, The One Thing.
To break this down further…
If you can’t articulate the value proposition of your idea or innovation in a way that furthers the goals of the people you’re presenting them to, your idea will be rejected.
This is because ‘what’s in it for me’ thinking is overriding the ‘what’s in it for them’ need.
But you need a pipeline of ideas and innovations in the first place in order to pitch them.
Volume first, then quality.
To achieve this, CEOs and business leaders must give people permission and a process to share their ideas and then they need to do something with the good ones and carefully manage the bad ones.
This will go a long way towards turning around the lack of innovation readiness.
4. Innovation in Action
In 2007 Joseph Golan, a division leader at ELOP, an Israeli electro-optics company faced a massive challenge – he knew his manufacturing and operation division’s success depended on getting creative ideas from his employees.
The results of his efforts are extraordinary:
- Employees generated over 5,000 ideas, with an exceptional implementation rate of more than 70%. (Simple ideas were implemented at a much higher rate than complex ideas.)
- Of the 430 employees, 81% submitted ideas; that’s an average of more than 14 ideas per participant.
- The new system doubled the number of suggested ideas and participating employees.
- The ideas generated through this system saved the company millions of dollars, improved efficiency, and dramatically changed the organisational culture.
The Power of Gen AI from Pharma and Beauty to Tax and Legal:
- Novo Nordisk and Eli Lilly and Company have seen their market cap double through innovation – notably, addressing chronic disease
- Sanofi has reduced the time to create clinical trial reports by 40% by using Gen AI to create the first draft
- L’Oréal has created a Gen AI product called Beauty Genius which produces hyper personalised beauty recommendations. Think delighting customers.
- KPMG has developed KymTax, a Gen AI tool that is crunching a day’s work into an hour
- Law firms and practitioners are using Gen AI to break through grunt work, support greater efficiency and create capacity for further uptake. Some are calling it their “first draft fairy.”
More than 16 million new businesses have been started in the US in the last 3 years, not including sole proprietors. While they may not be ready to innovate, they have ideas they’re pursuing, showing there’s a groundswell of innovation.
Watch this space, there’s a movement happening all around us and it’s time to get ready.
What does this mean for us?
If you’re a CEO or business leader you have the power to:
- Get out of the weeds and close the gap between innovation and strategy.
- Actively drive innovation in conjunction with strategy across your business.
- Set quantified objectives and KPIs for monitoring and measuring innovation.
- Give people the permission, tools and space to innovate, test and learn – they can’t do this if they’re overworked and overwhelmed, with no time for strategic projects.
- Embrace Gen AI throughout your business. Let it be your teams’ first draft fairy. Let it take away the grunt work and train your people to use it well.
Doing this alone dramatically improves innovation readiness and engagement.
If you’re an aspiring business leader:
- If you want to get to the next level in business or just feel more fulfilled, get curious.
- Build relationships and diversity of thought. These will pay dividends forever!
- Get your pitch right – make sure your idea, business case or proposal furthers their goals instead of yours.
- Embrace Gen AI – play, test and learn so you can create efficiencies and free up time to participate in strategic projects.
Innovation doesn’t have to be huge and game changing, it can be incremental, it can be a revitalising a component of your existing operations and you can stick to your core operations along the way. It might be as simple as developing a better message to get better cut through.
Complexity is the enemy of execution. So keep things simple in the beginning.
Consider expert help to kick start the process, it will not only speed up the process, it’ll transfer knowledge faster and reinvigorate people in your business.
Play to your strengths, respect your brand and customers, but know that spicing things up gives you a chance to appeal to a whole new segment of the market. And that’s a great thing for growth!
Would love to hear what you’re seeing and doing in this space.
Nina