How to Identify and Develop Your Next Big Innovation

We’re experiencing the fastest pace of change in the history of business. It’s no wonder innovation has quickly moved up boardroom agendas, as enterprises have recognized that it is vital not just for sustained growth, but even for survival.

Regardless of your industry, staying innovative requires focused leadership, strong resolve, and the ability to tolerate mistakes that will inevitably happen along the way.

Innovation starts with the right cultural mindset. You may have appointed a CIO or a CINO for this purpose, but regardless, innovation has to be a company-wide effort for it to be consistent year after year.

In this article we review the skills your company must cultivate to be able to identify and develop your next big innovation, then the next, and even the one after that.

Consider this your cheat sheet to ensure that your company is on the right track for continued innovation success.

Innovation Starts with Creativity

Creativity is the indisputable first step in any enterprise’s innovation path. It can be encouraged, cultivated, supported and even rewarded through continued effort. Creative enterprises use any and all ideas as a springboard to come up with their their next products, services and operations.

For example, to encourage thinking outside the box, many organizations now organize periodic hackathons, 24-hour windows for employees to work on anything they like and provide results.

In an increasingly globalized world, accessing various points of view and integrating them into viable, original solutions helps today’s companies serve international audiences better.

When employees are exposed to multiple perspectives and worldviews, the outcome is richer. Studies show that creativity is often achieved best in diverse environments, making a case for inter-departmental collaboration and diversity in the workplace.

Companies that foster creativity achieve stronger revenue growth, as such top-down efforts encourage employees to think bigger, take more initiative, and be bolder. In a 2014 Adobe study, it was discovered that 69% of enterprises where employees are encouraged to be creative reported having won awards for being a “best place to work.” Such recognitions attract a more talented workforce, snowballing the positive effects.

As long as you’re in business, there will always be problems to solve and better solutions than you currently offer. To be able to tap into the power of the minds around you, encourage your employees to explore new ideas without fearing reactions.

Nothing Is Insignificant or Off Limits

For long-term success to take place, the company-wide mindset has to be more than just theoretically open to change. The enterprise needs to really embrace change. A fully developed innovation culture looks both internally and externally for ideas.

This means that nothing should be considered off-limits. This mindset must be cultivated at the C-level of your company and be allowed to permeate through every department and level in order to encourage innovation.

Employees have to know that alternative solutions are welcome. To cultivate a successful company-wide startup mentality, everyone must be allowed to share their insights about products, workflow, best practices and anything else they want to bring up.

Freedom to innovate is the key to a profitable future. All ideas can be explored — even those that seem insignificant, those that concern practices that have been in place for decades or those that are assumed to be unfixable.

Take Swiss Post, a 168-year-old and 60,000-employee-strong global business. When the company noticed that feedback from different departments was going unnoticed or unacted upon, they implemented a system of asking employees to submit any and all ideas. One year into this practice, in 2017, Swiss Post received an international innovation award.

Let your employees explore all frontiers; they might see something operational or practical that you may not be aware of. Create a direct medium of communication where all topics are welcome.

Embrace Failure Along the Path to Greater Success

It might seem like a challenge to encourage risk-taking and free innovation without incentivizing the wrong outcomes. Some managers may fear that there’s only a fine line between cultivating exploration and an everything-goes attitude, but such a belief implies a negative attitude toward failure.

Cultivating a corporate culture that accepts and even embraces failure – within your predetermined parameters – will help your employees generate more ideas, and help you select which ones to pursue.

One way to foster innovation without making grave mistakes or extending your resources too thin is bringing in intrapreneurs. Their job description will require them to be shaker-uppers, focus on what your company can do better and faster, and allow them to fail at times.

A failure can be a resource. It can be studied and learned from. Managers can explore why the specific failure took place — inability to offer what the market wanted in a timely manner, technical problems, lack of technological advancement, lack of motivation etc. — and work to fix the problem.

An example of a company that learned from a very expensive mistake is Kissmetrics. They spent $1M on a project that never launched. In turn, they learned to optimize their innovation process for learning and to focus on customer happiness.

Behavioral economist Dan Ariely explains “loss aversion” in his book Predictably Irrational by saying that “When factoring costs, you tend to focus more on what you may lose than on what you stand to gain.” This is called the sunk cost fallacy, and is a favorite subject of economists worldwide. In short — focus on your goals and potential wins, and don’t stress over potential loss.

Failure is okay as long you take the time to learn from it. Fearing failure might cause more damage in the long run, as your company might miss out on opportunities that require some risk-taking in the beginning.

Develop a New Relationship with Your Employees

Flat hierarchies tend to promote innovation but they can be a challenge to maintain in large organizations. Because employees are the backbone of any company, managers and C-level executives must find ways to create the optimum work environment. This includes the way each team is built, and how work processes and communication are facilitated.

Google may have cracked the employer-employee relationship code. In a 2004 letter, Google founders Larry Page and Sergey Brin wrote, “We encourage our employees, in addition to their regular projects, to spend 20% of their time working on what they think will most benefit Google.”

This approach has redefined the Google management’s relationship with its employees, empowering creative initiatives in the process.

Have the Willingness to Pivot

Pivoting can be key if your company wants to identify disruptive early market opportunities. An idea that doesn’t work for one industry might bring magic in another. If your idea hasn’t proved fruitful yet, it doesn’t mean it can’t turn into profits in other markets or niches.

Take Twitter, for example, which was once called Odea. The company pivoted to the microblogging area when they recognized iTunes was soon to take over the space they were in — podcasts. They looked for a nascent area they could move into, and by 2016 Forbes valued Twitter at a whopping $15.7 billion. What Twitter did right was not giving up on the idea of creating a viral product in online communications.

Sometimes when an idea doesn’t work for one industry but works in an another one, companies merge several ideas into a bigger plan. The cosmetics giant Avon was originally a book seller, but when founder David H. McConnell realized that women were likely to open doors to salespeople selling products that mattered to them, he shifted the company focus.

Try to be flexible in your thinking. If you recognize a viable opportunity in a market that’s new to you, take a chance. Your idea just might be what a different market has been waiting for.

Small Budgets for Big Success

Part of what makes startups unique is their endless ability to be innovative while they are bootstrapped. Today, many startups don’t need a big budget to get in business. This can serve as inspiration for enterprises with access to resources.

If you were in their shoes, in your very own industry, how would you go about finding cost-effective solutions? How would you empower yourself to do more with less? Some enterprises create a specific department tasked with exploring these questions and advising management.

Allow your staff to step outside of their comfort zones to find alternative, creative solutions to easy and expensive ones. Consider creating an innovation department where these issues can be discussed and challenged.

Changing Your Tomorrow, Today

Successful businesses are grounded in innovation. Paying attention to what the most successful startups are doing will help keep you inspired and on the right path. There is power in identifying big ideas, and more importantly, identifying which one will work for you.

To find your next big innovation and to keep your innovative edge, you must encourage creativity, boundary-breaking exploration, interdepartmental communication and openness, thinking above and beyond budgetary concerns, pivoting and even failure.

About the author