Creating an effective innovation culture can solve business problems and open up new business models – with successful technology innovation labs having the capacity to deliver transformational benefits across the organisation. But how do you introduce a truly innovative culture that delivers ROI? Our Client Services Director, Mark Lapicki, shares the lessons he learnt setting up and running a technology innovation lab for a Fortune 500 company.
What do we mean by an innovation culture?
Many organisations claim to foster innovation, but an innovation culture to me is one where experimentation is not just acceptable but encouraged; where failure is not just tolerated, but welcomed as a learning exercise; where the normal ways of doing things are a risk, or not always a benefit.
To deliver long-term benefit, an innovation culture is also a long-term commitment. The reality is that it is often driven by the capacity that a company has: when times are good and a company is doing very well and they have spare capacity, then innovation becomes a priority; when times aren't so good, then companies typically go back to what they know. While that may be less risky, it’s arguable that if a company is experiencing significant challenges, that's the perfect time for innovation.
The benefits of an innovation culture
Done right, an innovation culture can open up new business models. If innovation is going to be successful, it needs to generate value, which means it either needs to be able to enhance something you already have, or do something completely new. Although it's easier to enhance what you already have, it's doing the new things that really have the capacity to generate huge revenues, but also to protect your business against somebody else developing that idea and disrupting you.
The innovation team should be charged with trying to solve the hardest of the business problems and looking at new ways that perhaps haven't been considered so far to try and resolve those problems. This means that the innovation culture, as it permeates through the company, is creating the culture; from every position, every seat, people are empowered to articulate problems – and even articulate ideas for solving those problems. These can then be fed into the innovation engine to refine, build, execute, learn, and cyclically continue to refine – until you can get to a point where you can start gathering data, using that data to feed the refinement, and then eventually launch your product.
The innovation team’s scope – and boundaries
When we talk about an innovation engine, the fuel is the ideas. The engine is generating refinements based on data, and the output is a product that can be passed over to run and maintain teams.
An innovation team’s role is essentially to establish proof of concept for new methods or products, as well as identify potential uses for them. For example, if the enterprise identifies a need for a new software product, the innovation team will get in front of user groups, gather feedback, gather data on usage, and make lots of modifications to the software and user flow until they feel that they’ve extracted the best value from it. It’s this data-gathering exercise that generates the value; the innovation team is not there to build the final product, but to gather the data and understand how to build the final product.
At that point, the project should be turned over to the development team to build it properly and launch it as a full product. An innovation team can't operate in a run-and-maintain mode. They tend to be multidisciplinary, able to work with a variety of different technologies, so there's a broad element of expertise. But if an innovation team were consistently to launch products, you would need to grow it massively to support the products that you’ve launched – which is not the role of the innovation team, and is not playing to their strengths.
Foundations for fostering a successful innovation culture
There are several factors that are important for creating a successful innovation culture:
- Top-down support: The drive for an innovation culture has to come from the CEO. You’re highly likely to encounter roadblocks, and the easiest way to clear them is to have the sponsorship of the person at the top of the organisation, which frees you to actually get on with solving difficult problems.
- An evangelist for innovation: In some respects, that can be the person at the top, but it's also an auxiliary function of the innovation department to continue to evangelise the work and get people excited about what innovation can do – the art of the possible. It's a constant presence of innovation throughout the business – through roadshows, meetings, webinars – so people know you're there and know where to take ideas.
- Involvement across the organisation: A technology innovation team can't operate successfully in a silo. The team could be fairly small, sometimes just a couple of people; they’re likely to have a lot of ideas at the beginning, but then those ideas will run out. The only way to sustain the innovation is to keep feeding that engine with ideas, which have to come from across the enterprise, with the innovation team responsible for the execution of the innovation portfolio.
- Structure: There's a misconception that innovation is very ad hoc, very unstructured, and fails. The reality is that a good innovation function is highly structured and can demonstrate value through data. If an innovation function fails to produce value, they're not going to exist for very long – but you have to accept, at the same time, that innovation does have a mandate to experiment and therefore fail. The key part is that the failure must generate value through the learn. And in the instances where the experiment works, there needs to be a mechanism to iterate on that, to extract the maximum value to then put into building a full product with less risk.
- Mindset: You need a combination of technical knowledge to really understand what is possible and very quickly put together solutions which aren't expensive but actually demonstrate something, alongside the ability to navigate a business, to get the ideas from people, to get the right sponsorship and buy in from the right people and actually be able to bring something to market.
Having set the parameters to create a successful technology innovation culture, the next challenge is to manage and demonstrate value – read more.
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Introducing enterprise innovation
If you’re a CIO or CTO wanting to introduce innovation as a cultural change, it can be helpful to discuss how to do so successfully – and how to get buy-in from your fellow C-suites – from an experienced team who already have operational understanding of running innovation, who have already had those learns, and are able to navigate a large enterprise to build a sustainable innovation function.
