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May
10
Rick Boersma

Is there a gap between how companies value enterprise innovation versus the resources they actually devote to it? What are the reasons behind this disparity?

When I was asked this question by an editor recently, this is my response...

There is absolutely a disparity between how companies say they value enterprise innovation (or innovation of any kind), and the resources they devote to it.  The proof of this is evident in an examination of the financial-results posted by different companies in any given sector.  Truly innovative companies in every sector out-perform their less innovative competitors by an order of magnitude.  Although lip-service is paid to “innovation”, relatively few companies follow through.

The principle reasons are 

  1. A confusion about what innovation actually is, followed by 
  2. Either a lack of understanding or commitment to doing what’s required to innovate.

Let’s look at each of these briefly.  

  1. As mentioned above, innovation (which produces breakthroughs) is not the same as problem-solving (which produces incremental solutions). Most companies don’t distinguish between the two, and take the path of least resistance, which is incremental innovation.
  2. Enterprise innovation, or the creation a culture of innovation, requires an OD or organizational-change approach.   This in turn requires a capital investment, but even more importantly, the investment of time + energy.  If leadership truly wants to create an innovative organization there are some best practices, which include:
  • clear, regular communication of support and expectations
  • modeling the desired thinking and behaviors 
  • understanding of the knowledge skill and behavior that lead to innovation and investing in ensuring people have them
  • identification of opportunities - and encouragement for identifying opportunities
  • openness to ideas
  • ability to assess balance risk and create practice opportunities 
  • the ability to encourage innovation at the individual level through the understanding of abilities, style, values and motivation.
  • As each corporate culture is distinct, there are also ways leaders can support the development of a culture of innovation that must be tailored to the organization and the point in time.  A process of discovery must be undertaken that creates a strategic, targeted approach for leaders to take to ensure innovation settles in to the organization with the least resistance and greatest return possible.  The discovery categories include:
  • Definitions and expectations of innovation within the organization: if innovation is being talked about - how?
  • How innovation fits into and contributes to the strategy: how will innovation move the company forward, and how aligned are leaders and others on this part of strategy?
  • The current value discipline (operational excellence, customer intimacy or product development) or the service delivery imperatives that are perceived to be in place: what do people think are the priorities when working - doing things efficiently?  Creating deeper relationships with the customer? By adapting and making new offerings?
  • Current employee engagement and feedback on the culture:  what are the current benchmarks?
  • Iconic success and failure examples: are there common "legends" about trying new things in the environment now?

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Rick Boersma

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