Have you ever come up with an idea in an organisation and someone shuts it down before you could finish articulating the idea? If so, you are not alone; in fact, this is very common in organisations that focus only on business value “known and or well-articulated” requirements or initiatives.
Without a doubt, focusing on known user requirements is pivotal to the success of any organisation; however, only focusing on the “known” without room for innovation and exploration of new ideas, creating new products and new ways of delivering services could lead to stagnant growth.
So, why is innovation important? Wikipedia states: “Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services.”
The beauty of innovation is that it applicable in any industry, even our everyday lives. In the context of large enterprises, it is extremely crucial to innovate, as innovation assists companies to improve productivity, reduce costs, increase competitiveness, improve brand recognition and value.
It also stimulates new partnerships and ultimately improves revenue generation and profitability. These are usually core objectives of business strategies of large enterprises. So, why not innovate?
Hinderers of innovation
I have often wondered if innovation is so important, why do some organisations see it as secondary?
It is said that Thomas Edison, who invented the light bulb, made 1 000 unsuccessful attempts at inventing the light bulb before he got it right. Imagine failing 1 000 times to create a product that as yet, nobody in the organisation understands. Funding of such initiatives becomes questionable.
Anything “new” that has not been proven, or is not yet understood, does not get the necessary support in a corporate environment that does not embrace innovation.
The first stage of the design thinking process is to gain an empathic understanding of the problem you are trying to solve.
Innovating or trying to innovate for many years, running multiple proofs of concept and seldom taking the deliverables into production is a costly exercise that seems to have little merit, depending on how you analyse it.
On one hand, during these experiments, gaining knowledge and experience is imminent and valuable. On the other hand, there is big potential for a high failure rate as compared to the success rate which ultimately boils down to expenditure.
The old adage of “if it ain’t broke, don’t fix it” which is merely maintaining the status quo, is one of the reasons companies fail to innovate.
The people aspect in innovation cannot be overlooked. Innovation means “change”. And change is usually uncomfortable. It generally means more work and new ways of doing things, which often incites thoughts or fears of chaos, loss of control and excess uncertainty.
How do the top innovative companies do it?
To put this into context, Apple, which is one of the most innovative companies in the world, according to Statista, spent $18.75 billion in its fiscal year 2020 on research and development.
Similarly, Microsoft has a $20.7 billion budget for R&D for 2021. Google spent $27.57 billion on R&D in 2020. Amazon, being the biggest spender in R&D, spent $42.7 billion on research and development in 2020, according to Forbes.
These figures certainly reinforce the notion that innovation is an expensive exercise. And while not all businesses will have anywhere near this kind of stretch in their purses, apart from R&D and innovation budgets, there are some fundamental principles embedded in the culture of these high-performing companies when it comes to innovation:
- “Day one” culture(Amazon) means every day should be as if it’s the first day of doing business, where the company has everything to lose and everything to play for.
- “Start with the customer and work backwards” is one of the principles of Amazon’s “customer obsession”.
- “Focus on the user” and “freedom to innovate” (Google) fosters a culture of innovation by giving employees room to innovate in their daily jobs.
- “Empathy”(Microsoft).
Interestingly, each of the above-mentioned company culture philosophies places people at the centre. And the common denominator, which stems from design thinking principles, is understanding a problem from the customer perspective and/or understanding what the customer needs.
Albert Einstein once said: “If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.”
I share his sentiment. I am an advocate for spending more time on understanding the problem prior to going into solution mode. One of the principles I use in the data engineering space is to “never try to solve a problem you don’t yet understand”.
The first stage of the design thinking process is to gain an empathic understanding of the problem you are trying to solve.
For large enterprises to truly become innovative and deliver the unmet unarticulated needs of a customer, they need to:
- Utilise innovation as a medium in the execution of the company strategy.
- Create a culture that fosters ideas.
- Create incubators for ideas to be explored and flourish; eg, hackathons.
- Create a culture where employees embrace change.
- Enable employees to think beyond what is possible.
- Encourage lean start-up thinking.
- Embed design thinking and DevOps principles and practices as part of the organisational culture.
- Make substantial investments for innovation initiatives.
- Incentivise innovation.
- Acquire the right technology, and people with the right skills and the right mindset.
Innovation should be used to augment business value-driven requirements. Once innovation becomes a competitor to business requirements, the likelihood of failure is inevitable.
Share