5 ways your business can foster innovation

Lorraine Warren, Professor in Innovation and Entrepreneurship, Massey University
5 ways your business can foster innovation

Innovation is a wide-ranging term that means different things to different people, which can cause confusion around how to do it well and how to benefit from it in organisations.

If we think of it as creating value from new ideas, there’s no limitation on what that might be. It can be a small improvement or a radical or transformational shift. It can be a new product, a new service or maybe just a new way of doing things.

And it’s definitely not just around start-ups or new technology – it can take place in any sector or any size of organisation, private or public.

Organisations often create processes and structures that are supposed to enable innovation, for example, programmes where employees can share ideas and get new projects underway quickly. Sometimes that involves partnerships with people outside the organisation, a way of thinking often referred to these days as ‘open innovation’.

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Large firms such as Proctor and Gamble have well-known programmes such as ‘Connect and Develop’ that seek to connect internal assets with the ideas, knowledge and people outside the firm, being careful that intellectual property and reward systems are aligned correctly as new thinking develops.

Of course, we shouldn’t forget that joint ventures and partnerships to carry out larger scale innovations have been around for some time. Whatever the context, successful innovation is based on fostering a culture where enterprising behaviours are encouraged and rewarded.

So what can your business do? Here are some ideas:

 

Create safe spaces for experimentation.

That can be a one-off, such as an Awayday for some creative thinking, or a decision to set up a separate structure such as a spin-out, where staff can develop something very novel away from the day-to-day processes of the ‘main’ organisation.

Or, it can be a creative area, where people can interact outside the norm. That can be as simple as the ‘water cooler’, which has almost become a cliché in innovation stories. But it is important to have a place – virtual, physical or both – where people can meet and just throw ideas around and see what happens.

 

Don’t forget your company’s vision

Think about your organisation’s long term vision and where innovation fits in that vision. Try and establish short, medium and long term goals. Consider where your ideas come from. Do you only look inside your organisation? Or do you look at your competitors are doing? Do you look ‘outside the box’, outside your own sector to see what might be happening elsewhere that you could use in your own organisation to really gain a competitive edge?

 

Create and develop business models

Think in terms not just of ideas and inventions, but instead of business models that enable you to realise value from those ideas. Learn how to create and develop business models and also how to use them as a vehicle for planning and growth.

 

Know the risks

Accept that innovation, however well managed, always incurs some risk. Learn to appraise and manage risk so that you can accept failure without too much harm to individuals or the organisation.

Learn to learn from failure, and move away from punishing failure or assigning blame. There’s no quicker way to stifle innovation.

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 Lorraine Warren, Professor in Innovation and Entrepreneurship, Massey University

Lorraine Warren has years’ experience of research, teaching, consultancy and business development UK universities.  Her main interests are in emerging technologies, early stage concept development and digital business models.  

She has recently joined Massey University's School of Management at the Manawatu campus.

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