From randomness to strategic innovation

One of the biggest frustration for CEOs is the random experimentation with no results. The fact that all enterprises have the same challenge doesn’t set anybody apart. But that is the goal for several enterprises for 2022. Most innovation centers today end 2021 with several improvements but no genuine innovation. While almost all of today’s innovation methods help manage ideas to get to the prototype stage, non have reached the market. In a few cases, it did but died within a few months. It’s time to get strategic. There are 800 unicorns, bolstered with a billion $ or more, ready to disrupt whatever market they are looking at. One CEO asked, “Why did I never see a unicorn in the making? I saw hundreds of startups, but most didn’t make it.” An excellent question. We answered: “Because you saw only those who ran around from startup event to startup event, trying to raise capital.” A unicorn is far more strategic than most people think. They are relentless executors, have brilliant talents, and run faster than any other business. Many enterprise leaders have yet to learn what it takes to bring innovation successfully to the market. But there are several who just now do that – with a dedicated innovation development strategy.

From improvement to genuine innovation

Another early shift we saw for 2021 is that enterprises realize that improvement is not innovation. Improvement has been made for 200 years in every R&D center. Some enterprises have already learned the hard way: an R&D center is not an innovation space and cannot be just “tasked” to be done. Using improvement as a step-by-step path to innovation is like a sailor using a lake to prepare for circumnavigation. One major force to make a clear decision to engage in innovation is the CEO. Without a clear direction from the CEO, innovation cannot happen in any enterprise. That shift to genuine innovation bares the question, “Should that innovation center remains a department, be a business unit, or even a separate company?” The trend is already seen by companies like Kärcher who separated the innovation activities into a legally separate unit which is still owned by the mothership. There is a slew of advantages included above and beyond the risk mitigation. Those separate units don’t have to be integrated into the massive bureaucracy of the main enterprise, they may have different legal contract frameworks and more.

From Students to top-level teams with exceptional cognitive abilities

Another interesting trend comes actually from the innovation consultant space. Very often, students had been hired to innovate for a company. The task was simple, “find a great idea”. It has been that way for quite some time because innovation was associated with a brilliant idea. Only now do we understand that a brilliant idea is always coming from solving an existing or in the future envisioned problem. Today we know that a human is producing thousands of ideas every year. We are even drowning in ideas. Ideas are of no value. Solving a problem is a hard and complex task and the solution may be considered a brilliant idea. When Elon Mask hires people, he still focuses on people with exceptional abilities. When Amazon employs people, they spend more time on soft skills than hard skills. The search for people with exceptional cognitive abilities for the innovation job is on the run. Several software companies emerged from this trend, like Pymetrics, which exclusively focuses on a hiring process for those soft skills.

2022 Summary

In the past two corona years, businesses of all sizes learned to be far more agile or suffer enormously, if not pushed out of business. Innovation has shown its positive effect on some companies where it resulted in innovation efforts that brought even significant improvements to the market capitalization on the stock exchange. We see even a trend of amplification in innovation efforts as the past growth also encouraged investors and the capital market.

In 2022, we will see

• More enterprises investing in intelligent and strategic innovation, away from random experimentation.
• More explicit use of the term innovation by refraining from using “gradual innovation” as an excuse.
• A big challenge is finding talents with innovation-related soft skills.
• A surge in upskilling teams to gain innovative thinking and become more entrepreneurial.
• Finally, by the end of 2022, we may see some significant innovations created by enterprises.

We, the BlueCallom team, wish you all a happy, healthy, and innovative 2022.

The post Innovation Outlook 2022 appeared first on BlueCallom.

These are just a few of the thought-provoking questions that came up in conversation between Innovation Managers from around the world in BlueCallom’s Innovation Thought Leader Circle (ITLC) in April. The ITLC is a virtual gathering of international innovation professionals with a diverse range of experiences with the goal of exchanging ideas and furthering learning within the discipline of innovation. 

What is Innovation and How to Measure It? 

Surprisingly, there is no one-size-fits-all definition to describe the term ‘innovation’. In the software industry alone, “there are more than 30 definitions of innovation” says Axel Schultze from BlueCallom. Without a universally accepted definition, companies will have different experiences in how they identify opportunities for value creation, develop an innovation process, and measure its success. 

Defining the concept of innovation will influence how an Innovation Manager is able to “implement the idea of innovation into the organization” as mentioned by Wolfgang Zondler from Zondler Consulting. To proactively confront challenges in considering how to measure innovation, Tony Namulo from Tavalé recommended an approach to clearly define what innovation means within your organization and relevant indicators to track its success by looking at it “what problem it is you’re trying to solve”.

 The goal is to gain a common understanding of innovation, while taking into account that variables such as industry type or firm maturity will influence the understanding of innovation, according to Alkan Dogan from Simmons & Simmons. He also added that “‘innovation should not entirely be focused on generating ideas and implementing them no matter what,” but rather for Innovation Managers to be selective about what ideas to pursue.

Kevin Minier, Health and Social Care Advisor, also recommended that your organization’s ethics should play a role in defining innovation.

Fiorella Vari Castro from Sportradar discussed how to define innovation within an organization by breaking apart the concept into three types: incremental (improvements to an existing product or service), strategic innovation, and disruptive innovation.

According to Schultze, disruptive innovation can be considered as when “you build something new…new market segments, new behaviors, or new needs.” But, defining innovation can be controversial because it depends on the perspective of the end-user, as discussed by Namulo, in judging whether something is truly transformational or not. As a result, the concept of innovation is perceived differently by alternate groups of people, just depending on their life experiences. 

Interestingly, Namulo introduced a very cool strategy to describe the concept of innovation: rather, “define the opposite of what it is not”. By providing a point of contrast and defining what “does meet the definition”, innovation can be better understood, according to Namulo.

 “What are the key performance indicators for innovation?” asked Schultze. It’s an important question because the chosen metrics or KPIs will influence and incentivize employee behavior and how innovation is managed. To provide an example, a company that measures its level of ‘innovativeness through the number of patents will incentivize employees to produce patents, but “how does this affect customer satisfaction?” questioned Namulo.

Furthermore, KPI considerations include: “Did [the innovation] improve outcomes? Did it make the company more profitable?” as pointed out by Minier. 

Innovation Culture is Key 

A key takeaway from the conversation revolved around the importance of cultivating company cultures to support innovation, with special attention to assembling diverse teams. “Diversity is required to protect against groupthink and linear thinking,” said Minier.  This thought was also echoed by Vari Castro, who said that “having an innovation team with background diversity helps so much to come up with different ideas.” 

But in order to reap the benefits from a group of diverse thinkers, a company should invest in building up an innovation culture that makes productive exchange possible.

Mikel Mangold from Venture Lab at NGK mentioned the need for “collisions and confrontation” to create a productive dialogue with different perspectives. Fostering an environment where creative abrasion can occur leads to more innovative thinking through diversity in thought. Of course, the challenge is then extending this innovative mindset from within the bounds of an Innovation Team and how to “foster culture within the company?” as asked by Vari Castro.

It’s an intriguing question, and one that we may be exploring during our next Innovation Thought Leader Circle on June 11. 

The team at BlueCallom will continue the Innovation Thought Leader Roundtable exchange. If you are interested in joining our next by-invitation-only event, please send us an email: tanja@bluecallom.com

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