If innovation is about developing something new that impacts the market and creates value for users – what is required to make that happen?
Innovation is a question of mindset, and creating that mindset precedes everything else. In my opinion, it’s the innovation mindset that overrides the aspects of human nature that are often holding back innovation in large organizations.
So, how do we create an innovation mindset?
1. Be open to change
To be open to change means to admit and embrace the notion that the world is in constant transformation and all areas of society are challenged by this change. It also means to be aware of where this transforming world is heading and to curiously keep track of change and new phenomena. Finally, it also means that you have to constantly keep analyzing what the transformation means and what the possible consequences of the transformation will be for your business.
Change is a tricky thing – we all have to deal with it and organizations are no different. Accepting the fact that technological transformation is about to impact your business is usually very hard for established organizations.
Let’s apply a light version of the Kübler-Ross Change Curve to this:
Denial is a common reaction to new technology and new market forces that can potentially overthrow an organization’s incumbent business.
‘We’ve been doing what we do for many years: it has proven successful and if we just continue to deliver on our quality we will be back on track again. The newcomer does not even have a working business model and are financed by venture capital.’
Defense is the next stage in the Change Curve: a kind of anger or aggressive energy to defend one’s current business model. A prime example of this can be seen in the music industry when MP3 and streaming came along as new technologies, and established organizations tried to change laws and prosecute against their customers.
The next stage is depression, where an organization will begin lamenting the state of affairs. Only after this depression stage are they ready to accept the new market paradigm and start working towards managing and adapting to it.
In today’s fast-moving markets there is little time to dwell in the different stages of the Change Curve, as competitors and new market entrants are pushing forward while you’re in the first three stages. To be innovative, established businesses must learn to shortcut the Change Curve and go directly from shock (pre-denial) to acceptance, without dropping into any of the stages in between.
2. Embrace creativity
The other aspect of an innovative mindset is to truly embrace creativity. An innovator’s attitude is that creativity is the solution to problems, rather than a traditional scientific method. This argument is predominant among many of those who have successfully practiced innovation in the realm of daily business activities. The innovation-as-art perspective in business stems – to a large extent – from the concept of design thinking.
But importantly, to equate innovation with art doesn’t rule out the necessity of structure, processes and methodology for innovation. All these are required also when practicing the art of innovation. However, the innovation-as-art perspective stresses that the starting point for innovation is creativity, rather than implementation of management processes and organizational structures for innovation. Which, in turn, requires a certain kind of culture and organization that enables creativity. In this area, we see many digital companies positioning themselves. For example, Valve Software, who stress their flat organization and the freedom – and every employees responsibility – to be creative in everyday work in their company handbook.
3. Think big
Today, most academic researchers and experts on innovation agree that innovation is about more than just incremental improvements to existing products or product extensions.
This leads to the point that innovation requires an ability and the courage to think bigger and beyond the current norms and truths in the market. Innovation is about stretching one’s thoughts out of everyday ordinary thinking and analysis.
We’d argue that big thinking and innovation is a combination of analytical skills, entrepreneurial spirit and the ability to fantasize. Few individuals are blessed with all these capabilities, but a group of people – and certainly organizations – are well equipped to accommodate these capabilities under the same roof. This is also one of the reasons why a diverse organizational culture has emerged as a key prerequisite for innovation: diverse groups that combine skills and capabilities can accomplish big thinking more easily than homogenous groups that are likely to reproduce versions of similar thinking over and over again.
4. Show courage
Innovation doesn’t happen unless organizations and the innovators within them have the courage to constantly rethink how things can be done. It takes courage not to conform to widespread beliefs and popular “truths” in big organizations. It takes courage to challenge proven strategies and successful products and services before they go into decline. It takes courage to question management and colleagues for doing things the way they have always done. It takes courage to constantly problematize and be that one person who always goes against the grain and tries to think about things from a different angle. It takes courage to be vulnerable rather than playing it safe according to established business practice. It takes courage to venture into the new and uncertain, risking failure.
But all of the above is necessary to push innovation forward and to create an innovative climate in organizations. Because when has anything new ever happened unless someone dared to take that step into the uncertainty of the unknown? When I think about the courage needed to take that first step I always think about the guy that started a dance party at Sasquatch music festival. That is exactly how things can work in an organization as well.
5. Think and act fast
Innovation within an organization must be a fast-moving process to keep up with the change going on outside of the organization.
Twentieth century innovation was often a slow process, with long lead times from idea to concept, and concept to market. A lot of time usually went into extensive R&D. In the automotive industry, for example, the timeframe to invent, design and launch a new car model has been around eight years. But today, eight years is an eon in an automotive market that is transforming year by year. Potentially disruptive business models for auto manufacturing like Local Motorshave proved that a new car can be dreamed up and launched in the market in 12 to 18 months, and with advanced 3D printing technologies and VR-aided design and manufacturing, that timeframe can probably be cut even shorter in the years to come.
To sum all of this up succinctly, there are five main ingredients to an innovation mindset. We need to be open to change, have a bias towards to creativity, an ability to think big, unrelenting courage to challenge the norm, and be characterized by speed of thought and action.
An organization with the desire to be innovative must think fast and apply a fast-paced innovation process with an efficient go-to-market roadmap. In this context, it’s also critical to adhere to the notion of “failing fast”, as new ideas and concepts have to be tested out quickly and be shut down just as quickly if they don’t fly. In this way, the organization can move resources to the next concept instead of getting stuck in a dead-end innovation project, because after all, the world’s next “big idea” is just around the corner.
This is the second post in a four-part series on innovation:
Why is innovation the buzzword right now?
The upper left corner is about using ICT to innovate value chain efficiency and improve offerings to the current market. In the car industry, this is typically a connected car. Today’s connected cars are sold as any other car, but they make use of the connectivity to improve the offerings toward the car buyer. This could be to offer safety features like calling 112 automatically if an accident happens, or having built-in connected features like ‘find where I parked my car’.
Jag (Ericsson), Helena Sjöberg (Microsoft), Marcus Wärn (Spotify) och och moderatorn Tommie Cau under panelen ”Innovation och digitalt i DNAt, organisationer måste tänka om”
Mikael Eriksson Björling 