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Innovation: The Economics of Innovation
If you have recently overheard someone discussing technology, real estate development, retail marketing, economic development or even hotel and restaurant concepts, you are probably hearing the word “innovation” in more of the conversations. The trend in business is most certainly toward innovation but what exactly is “innovation” and are we really ready to innovate? The reality is, like most buzzwords, innovation has become merely a concept that is tossed around in conversation and may be taken as far as paying a consultant to bring innovative ideas but at the end of the day, few will truly execute a plan for innovation.
The exciting thing about the innovation trend is the timing with the economic downturn—everyone agrees that we must innovate and we are forced to if we are to survive. What isn’t clear to many is exactly what it means to innovate and what is required of them to make it happen. Innovation is simply creating change in a controlled way that results in a positive benefit. In our experience working with many people and organizations, it appears that most really want positive benefit but without the pesky “change” part. Even today, some people cling to the belief that they can prevent change or keep things the way they are—the way they like their world to be. The problem is, change happens regardless. For example, the City of Sarasota would like to build a vibrant downtown, however there are factors—such as a noise ordinance—that could be holding success back. True innovation only happens when people:
• Understand that change happens, regardless of actions.
• Open themselves to new ideas and new people.
• Create a vision of change they would like to see.
• Act upon a plan that supports the vision.
It is important to come to grips with every step. Hiring someone to help you innovate can be a positive experience but it is not the only key to success. Most will be able to help you with creating a vision through their innovation processes but if they walk into a situation where the organization is not really open or there is resistance to change among members of the group, then the effort can be disastrous. The challenge begins dealing with the first two steps.
Change
What kind of change are we talking about? First, management in your organization or your key constituents must be ready to embrace change. This may not be easy for many and some may say they are open to change but deeply resent it due to fear of the unknown, being locked in old traditions and cultures or just being too busy staying on the original course. There are specific techniques that can help create an open forum and guide executives toward discovering true innovation for their company. Also, reframing the challenge by asking the right questions to get the desired change is extremely important. For instance, the challenge could be “how do we sell more widgets?” This is a good question to start, but selling more widgets may only be possible if you make real change. Selling more widgets today requires more innovative thinking, such as asking “how might we have 80 percent of our inventory made of sustainable methods by 2010?” or “how might we create a business culture that supports our vision?”
The recession was a wake-up call for many and is only part of the whole story. If you think you have to innovate just to get through the downturn, be careful to evaluate whether or not you were prepared for today’s business landscape at all. Technology has changed so much of how people communicate that you need to be prepared to address more than short-term problems. The most unfortunate part of this particular recession is that it comes at a time when many have refused to adopt new ways of marketing and communicating and they will fare the worst or endure the most disruptive changes to survive.
Openness
Being open to the possibility that good ideas come from unusual places is critical for success. Think of it this way: if your culture is one of suits and ties, multiple degrees and niche industry experience, then there is a good chance that hiring another person or consultant who matches your cultural profile will not bring the innovation you seek.
Innovation may come from the shop floor. Innovation in sales may come from someone in accounting. Innovation may come from a kid, a customer or a radically different industry. The bottom line is, creating an environment that nurtures true innovation starts with individuals shedding their preconceived ideas and prejudices. Deliberately bring people who are different than you and your team into your innovation meetings. Do something radically different in your next meeting—make everyone wear a funny hat or come to work in flip-flops and Hawaiian shirts. Have a meeting on the beach or right after a company-wide paintball game. Ask a trusted friend from a disparate industry to review some ideas you have and sit in on your next strategy session. Hire some student interns from Ringling College of Art and Design or New College of Florida to think about your marketing plans for bringing in more Gen Y customers. Then have them brainstorm how to reach more Baby Boomers. A new perspective can open doors and create the positive change you seek, but you first have to see that your viewpoint is not the only viewpoint and seek to understand from there. Remember that today, there are probably more new businesses created by CEOs who wear sneakers and jeans and are under 30 than there are new businesses led by experienced executives in suits. If you don’t believe it, spend a week in Silicone Valley or any large city.
Vision
One of the simplest principles in business and life is to begin with a vision or goal before you start any new venture. Unfortunately, it is probably one of the most ignored rules in business, especially in a crisis. Know what your innovation effort will do for you and build your innovation plan to support that goal. The loftier the goal, the more excitement you will build among your team.
Plan
The plan is just as important as any other step but without the foundation of openness, willingness to change and a solid vision, the execution may end in disaster—if it starts at all. There are many ways to innovate and many qualified facilitators if you need one. Some advocate incremental innovation, open innovation, disruptive innovation and on and on. As long as your plan supports a vision that has the backing of your management, then your plan will likely succeed. Learning the various types of innovation processes is easy thanks to the Internet and I encourage you to learn about the different methods as you begin this process. Any one of the innovation methods will not be right for every situation. It will depend on the vision, the industry landscape, competitive landscape and other influences.
Finally, innovation succeeds only if something is done and every part of the action plan is executed. Sounds easy enough but again, a plan is just a map—you must execute. A word of caution: sometimes this is where you really find out whether or not your organization is really ready for change. Resistance may occur from even the most vocal early supporters. You have to press on and if required, you may be forced to make difficult decisions to clear your path to innovation.
Michelle Raines is president and director of market innovation at Inc Marketing. Tim Raines is president of Rare Innovation. You may contact them at michelle@inc-marketing.com
By Tim Raines and Michelle Raines
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