How Startups Can Drive Continuous Innovation?
Digital change is coming fast, and it will not stop. Embrace it, understand it, and have a plan for it before it is too late. One of the most critical tasks of a Founder & CEO is to lead Innovation. How quickly can you stop following and start transforming?
In today’s VUCA world married to “Digital Darwinism”, technology and society are evolving faster than the ability of many to adapt. The founder does not have the classical choice of leading or following. What they require is a behavioral change to develop the “WILL” to translate everything they have learnt and understood about their startup’s fitness to lead into actual practice. Today’s digital age is quick, it’s ubiquitous and no organization is safe from it. Digital change is coming fast, and it will not stop. Embrace it, understand it, and have a plan for it before it is too late. It doesn’t wait or discriminate, only favors those who at least try to constantly innovate.
Over my corporate career of more than 2 decades transitioning across five different industries, I have realized that one of the most critical tasks of a Founder & CEO is to lead Innovation. How quickly can you stop following and start transforming?
I am sharing below some of the practices I have found successful in my career so far in driving constant innovation in any organization; a large setup or a startup and in fact, embedding innovation as a culture of the organization. I have coined this model as “MOTELS”
What does innovation Mean to your organization? (M)
Before embarking on the journey of innovation, I have found that it is critical to define what does innovation mean to you? Is there a common understanding across the organization? Does innovation mean simply generating a lot of new ideas? Are you looking for insights on improving customer service? Are you soliciting ideas on how to break into new markets? Do you want people to focus on trend spotting? Are you looking at ideas to tap into adjacent markets or product categories? What should innovation do for you – cut cost, improve response time? Idea generation needs guidance, and if you don't guide your team on what you need, you may get a stream of ideas that are not aligned with your strategic goals.
For example, innovation for Google is “Think 10X”. For them, true innovation happens when you try to improve something by 10 times rather than say by just 10%. Companies such as Apple, 3M, Samsung, Flipkart, P&G and dozens more have demonstrated strong records of innovation success and they all have defined very well what innovation means to them and everyone in their organizations know that. These companies have worked hard to create their innovation culture.
Establish innovation as One of the top items in your leadership agenda (O)
A crucial factor in accomplishing sustainable change is strategic follow-up and follow-through by the CEO or Founder. Therefore, if you seriously want your startup to innovate, you have to establish innovation as a strategic imperative. You have to make innovation one of the top items on your leadership agenda—not just once or twice when you first announce it, but consistently. You have to demonstrate that innovation isn't just a management pep talk or a flavor of the season but a true commitment. And how do you demonstrate this commitment? Some of the ways I have used with success are:
Performance Reviews: Check. Is innovation a top agenda in your performance review process? Do you rate your team leads on how they lead innovation? For example, how receptive are they to new ideas? Do they create and nurture an environment that supports creative thinking by everyone in their team? Do they respond quickly and decisively to capture a new opportunity, or do they sit on it? Do they encourage people to challenge the status quo? Do they pioneer out-of-the-box thinking?
Redefine Metrics and Incentives:Many a times, innovation initiatives are killed even before takeoff as businesses fail to redefine metrics to evaluate innovation activities. Create the right incentives for your employees to know without doubt that you are serious about driving innovation to constantly stay ahead of the curve.
Tools and Platform: I have often heard of stories of how even the best of ideas did not get any traction. Why? Simply because to my mind, the people who brought in those ideas were not clear of the value they brought to the organization. Therefore, my learning is that it is very important to empower your team with the right tools and resources to enable them to show why their ideas are worthwhile. For example, Autodesk the leader in 3D technologies regularly conducts innovation workshops to teach their employees on what to do with a good idea, who should hear the idea first and what that person should be hearing. Facebook empower employees to improve upon successful pieces of its platform, resulting in expansive changes like its News Feed and Timeline. Four Seasons Hotels and Resorts launched a new company-wide innovation program, BLUEWATER, some time back equipping employees worldwide with tools and behaviors needed to ideate, pilot, and refine guest experiences.
Build a culture of Trust (T)
I have often observed in my corporate journey so far that in spite of a compelling vision, rock solid strategy, excellent communication skills, deep consumer insights and talented teams many corporates and leaders just are not able to take the organization to the next level. Simply because people don’t trust each other! And to my mind, a culture of trust is the bedrock for innovation to blossom. When trust is missing, fear takes over. And fear, for sure is an innovation crippler.
You have to give your team a sense a safety. When your team members feel safe with each other, they feel comfortable to open up, take appropriate risks, and think creatively to innovate. You need to create a culture where new ideas are not ridiculed, no matter how crazy they are. Failure to my mind should never be discussed publicly; they should be only used as innovation lessons and case studies.
In an innovation journey, I have often found that the traditional top down approach just does not work. As Seth Godin said, "Ideas spread horizontally." Forget the organizational hierarchy when you invite people to innovation meetings—invite anyone who has a skill or talent. Walk across your organization, interact with employees and ask them customer pain areas and ideas to innovate. Have “Coffee with Founder” – a one on one with anyone for 20 min who says he has an innovative idea.
Reverse mentoring is another method I have seen which strengthens trust and the message goes out loud and clear. In fact, GE is known to use reverse-mentoring to foster understanding, create mutual empathy and promote collaboration between disparate generations of team members, all pre requisites to drive innovation.
Focus on End user, yes your customer (E)
The classical debate most often is should you focus on competition or on your customer when driving innovation? Should I innovate in doing something better than competition? In my experience, a laser focus on your customer pain areas and anticipating potential needs of the future will ultimately help you to come out with innovations that will make everything else irrelevant. When you build a robust and loyal base of people who love what you do, you’ll have something rare and valuable. Just kindle the desire in your employees to improve the lives of your end customers.
Innovation Lead (L):
This is another question I have often been asked. Should innovation drives be organization wide or should you build small focused groups to drive innovation. My feel is that while the drive has to be organization wide, to bring in that everyday focus you need to create champions who will lead the drive across the organization.
One way to harness this is setting up a dedicated innovation lab, separate from core business operations. This separation helps encourage disruptive innovation and entrepreneurial thinking, reduce bureaucracy and give your team the freedom to challenge current ways of working at the business. This however must be led by a key CXO of your leadership team or one of your co-founders.
Support this by appointing “innovation champions” in every business. These champions or Leads must be credible leaders who would help their and other business units implement programs and processes to move the needle on the innovation metrics. Creating “passion Groups” of employees from varied backgrounds and locations having a common passion for any particular area is another idea which generates lots of positivity.
For innovation Leads to succeed, setting up a companywide budget for innovation is a good idea. This is like a catalyst fund” – a pool of money that internal innovation teams could use for doing rapid proof of concept on new ideas. Thompson Reuters uses this concept very effectively where teams with the most compelling ideas are given an opportunity to present and defend their idea to the innovation investment committee, which includes the CEO, CFO, CHRO and a few other senior executives and then given the funds.
Speed is critical (S):
While size gives your business scale, in the innovation journey, speed is most critical. The importance of speed is becoming more and more important with each passing day in today’s digital age as it enables you to catch up with consumer trends as they emerge, leave competitors flat-footed, and even drive costs down and quality up. In my experience so far, any new initiative should be tasked to be piloted in 100 days or less. This brings in the much required sense of urgency and management focus.
The CEO’s and Founder’s greatest battle today is to constantly innovate and stay ahead of the curve, charting new growth trajectories. Building this culture of innovation within your startup is insanely important and has to start from the top. You have to Embrace failure.” “Fail forward.” “Fail hard, “Fail fast. You have to knock such failures off its pedestal, disempower it, and move on.
While it’s one thing to drive your company towards success, it’s another to properly safeguard it for the road ahead. Continuous true sustainable innovation can only be the road to continual success. I have found this “MOTELS” concept very powerful when HR has taken the driver’s seat in driving innovation as a culture. I look forward to hearing your experiences and views.
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