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Stop commoditizing of innovation!

13 April 2018

By Paul van der Hoeven, Innovation Driver at Eneco, IDCP* participant 2017-2018

 

Summary

For several years, innovation is a trending topic for companies, universities, countries and cities around the world. Almost every (corporate) company has its innovation center, every city its city incubator, start-up area, every university its accelerator program.

Innovation is almost a commodity, everyone is practicing and supporting innovation, sometimes it almost seems to be trick. As the word of innovation is only on the façade of the company, while internally everything follows the historic company business rules. What does this actually mean for the innovation domain on long term? Does this type of ‘innovation theatre’ creates positive value for your business?

 

Problem

As an innovation driver, I encourage any initiative to facilitate and discover new opportunities for companies, to let’s say, re-invent their selves. On the other hand in the case of threatening innovation as a one trick pony, one could expect negative effects. Why?

First, imagine the innovation capability as a commodity. Commodities are of course necessary, but commodity markets are a race to the bottom, loosing added value rapidly over time. One could state a commodity is not helping to differentiate at the end and does not generate any kind of sustainable advantage for your company, so simply playing copy-cat might harm you or at least bring you know real sustainable advantage. So be alert, if companies tell they started to work with a start-up, because it’s so cool.

Second, positioning and communicating about innovation, as a hobby, is something different than really make it happen and let the change be really part of the company and its DNA. If new ideas, products or services are not properly accompanied, supported and carefully nurtured, valuable explorations, can be suddenly stopped and could lead to demotivation or decapitalization in your company. E.g. a one-time idea competition does not change the organization into a game changer. This could lead to disappointment with employees, seeing new ideas are not followed up, and this bad remembrance, could harm. Remember, that real changes in markets and companies take at least 7 years.

Third, the enormous offering of incubators, accelerators, start-up competitions sometimes feels like a jungle. During the current period of economic growth, this might not be a problem, but what happens, as we enter a period of economic hardship. One could argue that a consolidation and shake out will happen (which is not a bad thing itself). You could assume any innovation trick will stop immediately to save on costs and creates a bad company remembrance. If under pressure of severe economic times, real game changers need to step up, they might face even more difficulties, to launch valuable new innovations, as they have to compete with the bad innovation vibes of the past, which could result in extra delay, frustration and therefore harm the company.

 

Solution

Several steps might help companies, to assure the innovation capability is developed to create value.

 

1. Urgency and compelling story

Innovation needs urgency and a compelling story So what urgency of compelling story has your company? Take sufficient care for this to determine and find the urgency and compelling story, before you decide to just, launch a one-off internal start up competition.

 

2. Innovation

Innovation has many interpretations. From Incremental, disruptive, platform, business model, technology, R&D towards product management or competitions, etc. Define what problem or type of innovation category are you into or looking for. So start with answering the question on definition, type and horizons of innovation, before you leave station. In what type of bucket (core, adjacent, transformative) needs the work to be done?

 

3. Maturity of Innovation

Every company is at a different level of innovation maturity. Some companies are still at the beginning of a long trip and consider a start and some have a long track record in innovation. A careful assessment of the current innovation capability is crucial to determine the ambition and next steps. Rita McGrath has shown that an assessment is a start. So what is your innovation maturity, check it out!

 

4. Capability & team

Driving innovation is a dedicated (supporting) capability, which you need to develop and invest in, in a continuous way. Just like sales, marketing and IT are these competences you will need and develop and fuel over time.  It is a set of soft and hard skills, from culture, commitment, budget, resources, (learning) targets. So until how far has this capability developed already?

 

5. Ambidextrous

Changing the business and running the business are different games to play. Tushman & O’Reilly  argue ambidexterity is key for create better opportunities and fertile grounds for success. What is the proper and fertile ground for organizing innovation in your company?

 

6. Impactful innovation takes time 

Case studies show that real changes in companies take at least 7 years to really be in the NDA of companies. So a strong vision, strategy and dedication is required to make the change happen. Anchoring change is therefore crucial to not let it be just a temporary thing.

 

7. Leadership & Vision

To have and create all the circumstances, like time, support, a strong (entrepreneurial) c-level leader with vision needs to start and drive the process of innovation, to create and protect the developments for the future.

 

Practical impact

So should you not start with innovation? No, every company should start exploring their future business. And innovation is about (fast failing and) learning, but as explained above, it requires a careful approach and assessment of the current company situation, the urgency, conditions, to make it happen and work on long term. Otherwise you might reduce the chances for successful innovation in your company.

 

Background information

This opinion piece is one of the deliverables of participants of the *Innovation Driver Certification Programme (IDCP). 

Author: Paul van der Hoeven, Innovation Driver at Eneco, IDCP participant 2017-2018

Also published onhttps://www.managementexchange.com/hack/stop-commoditization-innovation

 

Disclaimer: This is a personal opinion piece. Any views represented in this post are personal and belong solely to the author and do not represent those of people, institutions or organizations that the owner may or may not be associated with in professional or personal capacity.

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