We all know that CEOs are demanding higher levels of innovation and that they are dissatisfied with performance today. This isn’t really surprising as competition ramps up from all corners of the globe and as technology races ahead. Change is rapid yet constant, and innovating new products and services is the one way that CEOs and other executives can fathom a path to profitability.
Executives and managers, however, face a great number of challenges to develop and sustain innovation cultures within their firms. You can’t simply demand that someone be creative. And, of course, no one has a crystal ball predicting tomorrow’s next blockbuster product.
Instead, CEOs, senior executives, and managers can design and foster an environment that is conducive to innovation. A company’s culture sets the tone for risk and opportunity. An innovation culture is one that is fun, real, and transformative. Learning is a primary goal of firms that are successful innovators.
A lot of corporate environments are stodgy and formal. Some companies have dress codes that specify no jeans or t-shirts. My husband’s company (an oil and gas refinery) has banned fire-retardant clothing (required in the operating units) from their main campus, along with golf shirts and tennis shoes. They are hoping that a formal dress code combined with cubicle-only workspaces will foster instant collaboration. Incidentally, a frequent “gift” from the company is a logo golf shirt. This doesn’t sound like much fun to me.
Instead, we can look to Silicon Valley firms where the dress code counts less than the work that is accomplished. Some of these companies openly display foosball and ping pong tables in the lobby. By encouraging light-hearted competition, managers can also build team spirit. A team that has fun together will drive toward a goal with a collective will and be motivated for success. Laughing together can diffuse conflicts and allow different pathways in creative problem-solving.
Grounded in Reality
Innovation, however, is not all fun and must be grounded in reality. While a fun environment can establish an open, sharing, and collaborative culture, innovation needs to produce products and services that make a profit. Managers must ground their new product development (NPD) teams in the reality of the markets, manufacturing boundaries, and other real-world constraints.
For example, we all know a basic ground rule of brainstorming is not to critic an early stage idea, regardless of its basis in science or consumer markets. However, not every idea is a good one. When the team moves from divergent thinking (brainstorming) to convergent thinking (e.g. selecting concepts and building prototypes), management is responsible to establish reasonable boundaries on the development project. Some constraints that are reality-based may include raw materials supply, manufacturing cost, and available distribution channels.
Innovation is defined as a new way of doing things. The goal is to change how a customer’s problems is solved, how a service is delivered, or how a company executes its planned business strategy. If these changes are minor and at the fringes, the firm will lose to a more innovative competitor. A successfully innovative company seeks radical transformation.
Consider Amazon, for instance. Starting out with a goal to be the biggest bookseller, the company has transformed itself into an unrestricted retailer and provider of information storage through S3. The transformation cam as a result of trying new approaches to identified customer problems.
Note that Amazon’s transformation from selling books to selling everything, including cloud hosting, didn’t happen overnight. Jeff Bezos, Amazon’s CEO, nurtures transformation with continuously evolving expectations and accepts failure as a learning event. In 2017, Amazon has begun to experiment to transform a previously untapped market by offering their Prime service at a discount to those who receive government assistance (yet announcing a 20% price increase to existing customers in 2018). Some experiments lead to profitable and transformative innovations, while others provide learning opportunities.
Innovation is Learning
Fostering learning crosses all aspects of developing an innovative environment. Managers and senior executives must be open to failures from small experiments in order to learn what works. Successful innovators use learning as a key element of an open culture. Innovation should be fun, real, and transformative.
New product development teams will benefit from a culture that fosters learning and supports creative team-building. New products and services must be grounded in reality, while management provides goals within a broad set of constraints. Seeking a new outcome or experience can transform a business that is accepting of risk from rapid experimentation and learning from failure. CEOs are demanding innovation to stay competitive. Senior executives and product managers can nurture innovation through a learning environment.
To learn more about innovation and new product development, check out self-study and other NPDP Workshops. Feel free to contact me at firstname.lastname@example.org or 281-280-8717. At Simple-PDH.com where we want to help you gain and maintain your professional certifications. You can study, learn, and earn – it’s simple!
A great starting point to learn about innovation is NPDP Certification Prep: A 24-Hour Study Guide with additional references at https://globalnpsolutions.com/services/npd-resources/. You also might like The Invisible Element by Robert Rosenfeld and colleagues, and Innovation at the Speed of Laughter by John Sweeney. And look for my chapter on Virtual Teams coming soon in PDMA Essentials Vol. 3.
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