How to implement a kinder innovation strategy
Yes, it’s hard right now. In the face of adversity, companies are making tough decisions. But, disruption can be an opportunity, and it’s an ideal time to redefine innovation strategies, involve your employees more than ever, and experiment with new ideas to shape post-pandemic life and commerce.
The evidence in favour of this is clear - consumers have been reflecting on their choices since the Covid-19 pandemic began; 42% of consumers believe the way they shop will fundamentally change, 34% would pay more for a local product, and over 25% say they are already paying more attention to what they consume and what impact it has.
Past recessions have seen the emergence of low-cost airlines, alternative FinTech companies (and currencies), and launched market disruptors like Airbnb and Netflix.
This time, we can seize opportunities to create overdue, lasting positive change:
The focus on operational cost-reduction, means organisations are studying their supply chain continuity more than ever, accelerating automation, localising production and multiplying suppliers.
The lockdown has actually fast-tracked digital transformation across organisations, validating the possibility to work from home, creating a culture of change and ensuring a global move to e-commerce - some countries banning cash altogether.
Constraints have led to creative solutions and flexibility demonstrated by corporations and small businesses alike: eg. repurposing core production, tools and materials to create PPE, sometimes keeping workers employed.
Covid-19 Disruption Benefits
Consequences of the lockdown are well documented and very tangible, but soft factors such as company culture transformation, attitudes to change, company-wide communication and collaboration - often key hurdles to implementing innovation strategies - are paving the way for future innovation.
It’s time to leverage the underlying optimism, explore these opportunities and drive positive innovation across business units to prepare for success after the pandemic.
Why is sustainable innovation good for business?
Sustainable Innovation can be defined as the implementation of a new process, product or service, that adds value to a market AND makes a positive impact on the environment and society - incrementally or transformationally.
For me, key focus areas are: moving to Circular Economies (zero waste looping of materials moving from ownership to leasing via the 9 Rs), Cellular Agriculture for alternative proteins and power from Renewable, Clean energy.
Circular economies look at the real customer value and if there’s a better, more durable, effective way to deliver it.
When environmental, social and financial factors are taken into consideration and immersed into the whole business cycle you will see multiple success :
Customers are demanding more sustainable practices from companies, wanting products and services with a lower impact on the environment. Cleaner technologies, localisation and competition, mean prices are getting lower to reach this goal.
Environmental implications of sourcing fewer raw materials, using cleaner energy, using greener suppliers, and a plethora of other actions will be beneficial.
Sourcing value - if adopting the circular economy approach for manufacturing or consumer goods industries there are cost reduction opportunities with re-acquiring materials and re-manufacturing products. Even more useful is the informational value gained from retrieving your goods from users to understand HOW they are used and which parts are breaking first.
Employees. When involved and communicated to properly, sustainable innovation can be a big driver to employee satisfaction. CSR “social innovation” initiatives alone, improve employee engagement job satisfaction, and talent attraction by 77% - but, when involved in company-wide innovation they understand the whole value chain better and contribute to identifying efficiencies, thinking beyond business units, and work in collaboration with colleagues.
Plus, most of your workforce is experiencing a culture-shock, forcing flexibility they otherwise wouldn’t have encountered. Experience adapting to changes is crucial to innovation implementation and often a big hurdle to overcome. Teaching your workforce to think creatively will mean ideation will flow second-nature. Embrace it.
Who should be doing this?
Crafting an innovation strategy is important at any stage of an organisation’s lifecycle or any organisation size to keep relevant and maintain a competitive advantage against competitors or market disruption.
Tech Startups (or ex-startups) naturally have an innovative culture as they’re launched from an idea and developed to reach market growth. Product roadmaps are their innovation strategy planning new features, capturing new markets and rolling out an exciting disruptive vision that they believe will change the world. But milestones may be disrupted and they’re currently most likely considering how to pivot - or already have. As they grow, it’s important to maintain this innovative mind-set.
SMEs account for 90% of the global economy who, despite fewer resources and scale, can adopt similar principles - particularly for process efficiencies, eg replacing unproductive meetings with workshops and automating systems. Or, put-off by the cost and resources involved to develop a new feature/product might fail to test ideas.
Corporate teams are likely have innovation strategies to maximise productivity and boost financial KPIs - but if sustainability isn’t being properly considered, this is a really good time to invest while everything else is operating at a lower capacity. When the market picks up again you’ll have the strategies in place.
At any stage your company may be in, it’s essential to align your innovation strategy with your business goals.
Ok, so HOW can I make an innovation strategy sustainably align with my business goals?
It’s likely that your organisation has actively been busy securing the means to pay your workforce, or maintain operations, renegotiate contracts, and communicate your efforts to your audience amongst a million other tasks - but the global pandemic has seen shifts in empathy, slowing down, community and caring for the environment with customers demanding a “new normal” one in which the world IS a better place. This is a perfect opportunity to offer exactly that.
How are you aligning your innovation strategy with your business goals? More importantly - has your work culture shifted?
Take the time to analyse your business goals.
Does they still resonate? Does it give you and your workforce reason to go to work? OR - is there a potential shift in the making…? Are you having crazy dreams you think are unfeasible? Pay attention - this could be the future.
Analyse your competitiveness, your value proposition, markets and active projects to understand if you should be expanding in existing markets or creating new ones - ask yourself how innovative your current industry is - what could be better?
Identify opportunities for innovation
What could be improved in the business, industry, global level that you hadn’t considered a priority previously? Which areas need to be explored? How can you answer customer needs with technology and ideas? How can you reach your business goals FASTER?
Is there potential for a circular economy for your own industry? Probably. Will you be the one to lead the transition?
If you’re exploring Circularity - you could consider how replacing ownership with leasing and upgrading with modular products would shift your business model, or how feedback loops will maximise informational gains.
A huge part of innovation is understanding customer pain-points. There is a lot of customer pain out there. And will continue to be. Today’s pandemic, is tomorrow’s recession - automation was on track to reduce jobs substantially anyway - how can you help soothe people’s problems? Can you provide cheaper options while maintaining quality?
Look to sectors looking to be disrupted - online education, energy, banking again?
Identify your assets, and what organisational changes you’d need to make it a reality.
Take stock of your assets and see what you could do with your distribution network, physical assets, talent, or brand. There is so much potential isn’t there? Identify how to access and leverage them and let’s experiment.Do you need to upskill your staff? Do you need specialists? Is there a young startup out there offering amazing tech you could hire? What partnerships or technology would you need to make it happen? Will your organisation adopt the projects or think it’s “just more work”.
Importantly - identify who will be leading the innovation efforts. Ideally, it should be the CEO, or President - but more companies are hiring CIOs… in any case, it should be a company-wide effort - delegating incremental innovations to business units and overseeing transformational innovation from the top.
Set-up processes and structures to enable innovation
There are multiple options for rolling out your innovation programmes internally and with external help on varied scales of involvement and budget (I’ll cover more in future post). You could always run a workshop to establish a clear programme in one or two session. Then - build your teams and start communicating.
Identify how to best manage them whether it’s by business unit, centralised through the innovation manager, centre of excellence or all through the CEO - in any case top-tier involvement is crucial. Remember that while Innovation Teams can manage these systems, involving the work-force is critical.
Implement Innovation Strategy . Whether it’s completely transformational projects or incremental wins with a purpose - well done!
Measure the impact but don’t just focus on the hard metrics of revenue generated, rate of return, C02 saved, efficiencies gained and other traditional metrics. Soft metrics including customer touch-points, insights generated, ideas generated, hypotheses tested, number of patents generated, demos made, collaborations, and so many more can be even more valuable to see the effects of your innovation projects.
All the efforts you make for your innovation strategy will fail without the support of a flexible company culture, where people feel empowered, working towards the same, exciting and meaningful goal. Involve cross-unit employees from the beginning through workshops to establish the innovation strategy and communicate it to every part of the organisation.
Conclusion
To wrap this up I’d encourage businesses to think around simply going back to “normal” and instead, use this opportunity to showcase your values and leadership in your sector.
It may appear counter-intuitive to invest in the future when you’re struggling to keep up with the present, but as outlined above, conditions for innovation are favourable and it will be crucial to solidify the competitive advantage of your offer.
It’s not too late to define your innovation strategy and set up some actions. I’d be happy to help you plan your internal innovation strategy or facilitate innovation workshops to explore some of the new ideas your innovation programmes have gathered.
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