Innovation discussion document
Introduction
Innovation is a growing business concern.1 As competition increases in all industries following the recession, the improvement of products and processes through innovative thinking is essential to survival and growth.
Innovation is now something that is measured globally using the Global Innovation Index to the extent that countries are ranked according to their investment in various areas, including research and development.2 In an Accenture study, 93% of Executives surveyed said that the long-term success of their organisation’s strategy depends on their ability to innovate. The implication of this is that for companies to truly compete with the global leaders, they need to create a workforce that is capable of free and independent thought. One way to do this is through training and development.
Innovation and training
As the below results from the UK Innovation Survey 20133 show, 14% of the 14,487 companies who responded invested in innovation training, which was an increase from 12% in 2011. Businesses are increasing their awareness of innovation and its importance, and it is a growing need that will only become more urgent with increasing competition in the corporate world.
There are already many available courses on problem-solving or creative thinking, both of which are foundations for innovation. However training does not have to be limited to the generation of ideas; it is also valuable to train individuals to communicate better with others so that they can more successfully develop their ideas. This means that training in seemingly unrelated areas, such as collaboration, contributes to an innovation culture. In our accompanying article, Creating an Innovation Culture, we talk more about the differences between having ideas and taking them through challenging development stages, highlighting that there are more skills required for successful innovation than just creative thought.
‟If we do innovate and we take advantage of the new waves of technology, the new waves of service delivery, product improvement, customer service engagement, then we’ll have a place in the world but we're going to have to devote some resource to doing that ... So it’s about what people often call training but we call learning. It’s about making sure that organisations collaborate.’’
– John McGurk, Head of Scotland, CIPD4
In addition to innovation training, companies are also encouraged to offer the opportunity and incentive to innovate, such as google’s ‘20 percent time’ initiative or their Founders Award which offers stock as a financial reward for entrepreneurism.5 These programmes support recruitment and retention strategies, since employees are encouraged to share and explore ideas, giving them a greater commitment to the organisation’s success, but they also help to foster a culture where innovation is a priority. The result is that companies now need to be innovative about innovation in order to keep the best people and make the most groundbreaking advancements.
Industry approaches to measuring innovation
Depending on which system is used, there are several measurable aspects of corporate innovation. These include but are not limited to:
- New products or services
- Reviving incomplete projects
- New or improved organisational strategy, process or concepts
- Acquisition of knowledge, training or new equipment
It is difficult to separate the categories for the purpose of financial measurement; for example the Business Enterprise Research and Development Bulletin 2014 states that UK companies invested £18.4 billion in Research and Development in the previous year, however this includes the creation of new products, new processes and general research.6 The amount spent on innovation training would also be easy to calculate, but would the subsequent creation of a new product be attributed to that people investment, or to direct technological research?
The process of innovation is interlinked and interdependent; without the training, it would be harder for people to generate ideas; without the research those ideas would have no backing; without the correct organisational processes the project could fail to get off the ground at all. To measure innovation, then, is not as simple as looking at financial statistics. The Global Innovation Index (GII) completes an annual study, gathering data from more than 30 sources to assess an economy’s innovation activities. In their 2014 study they evaluated national economies according to the below scorecard and ranked them accordingly.7
These aspects of innovation can equally be assessed within an organisation. The important themes to take away are infrastructure, education and market knowledge. Is your company built to support innovation? Are your people educated and inspired to make a difference? Do you know what your competitors are doing, and how you can surpass them? It is widely accepted that a formal approach to innovation is more likely to deliver a competitive advantage8, and a thorough diagnosis of your current approach would be a helpful first step.
It is possible to analyse your own business, or to bring in a third party to review it objectively. We recommend checking your innovation-readiness and identifying those areas where you want improvement.
“A formal approach to innovation is more likely to deliver a competitive advantage.”
There is pressure on organisations to facilitate internal innovation, however there are several obstacles that every organisation can face which will hinder their efforts. These can be structural, cultural, or people issues:
Whatever content you need to deliver, an app could probably help you do it. Easy-to-access, 24-hour, bite- sized access to learning is what mobile offers – and it’s also what today’s learners expect.
To improve internal innovation results, a business needs to be agile, focused and people-centred. Often companies will employ consultants to come in and review existing practices in order to make the necessary changes but to tackle these underlying problems can be difficult and costly for companies; new systems and processes take time and money to integrate, an established culture is a huge effort to change, and people need investment if they are to be made innovation-ready.
One solution that some companies have adopted is to collaborate with other organisations who have different thought processes to stimulate or challenge their own. As the Times states:
“Today, more than half of P&G’s innovation originates from a partnership with an external organisation; their innovation success record has doubled while their cost of innovation has fallen.”9
This external organisation serves as a conversation partner, allowing a free dialogue to discuss ideas and offer an unbiased perspective. Sometimes a third party can point out flaws in a plan before it is implemented, much like a proof-reader. It is a relationship of mutual advantage and can be a quick way to promote innovation in a traditional or change-resistant culture. Sometimes it can just be using an external tool or methodology that yields results, such as when Insights helped 3M to foster a culture of innovation. You can see the results of this here.
It can often be the opinion that innovation is reserved for those radical technology companies who base their success on producing ground-breaking products, but there is no company – new or established, large or small – that would not benefit from a more innovative approach. Successful innovation is not about making change for change’s sake, but about implementing changes that will have a measurable impact on efficiency, output and ultimately business goals.
The key components of a true innovation culture are:
- The support and reward of employees who have ideas
- Open channels of communication so that ideas can move forward
- Market awareness to learn from, and stay ahead of, competitors
- The necessary infrastructure for making quick changes
- An objective viewpoint to sense-check suggested changes
- Awareness of the barriers to internal innovation and ability to overcome them
With these in place your company and your people will be ready to do great things. Rely on each individual’s drive to succeed and let them be the momentum for the change to a company where innovation is business as usual.
1 Accenture Study: Innovation Efforts Falling Short Despite Increased Investment, May 2013. According to the study, 70% of Executives place innovation in their top five business concerns. The survey included 519 companies across 12 industry sectors in France, the UK and the US.
2 www.globalinnovationindex.org. The UK is currently tenth on this scale.
3 UK Innovation Survey, Department for Business Innovation and Skills (April 2014)
4 http://www.cipd.co.uk/hr-resources/podcasts/67-innovation-hr.aspx
5 How creative reward can drive innovation, Duncan Brown, CIPD (3rd February 2015)
6 Business Enterprise Research and Development Bulletin, Office for National Statistics (November 2014)
7 www.globalinnovationindex.org
8 Accenture Study: Innovation Efforts Falling Short Despite Increased Investment, May 2013.
9 Innovation is key to business success, Tony Crabbe, the Times (13th February 2014)
