Internal innovation is key to building a growth-enabled company. Here are four steps that must be taken to achieve that.
Few things are better for business than heading an organization that's always at the cutting edge of innovation. Being responsible for a breakthrough won't just mean more revenue by selling the innovative product or service you're offering — it will also cement you as a thought leader in the eyes of your customers. When you think of innovative phones, don't you think of Apple?
Yet, innovation isn't just about a company's products and services. It's about what's going on internally behind the scenes, which arguably lies at the heart of everything else.
Why internal innovation matters
You probably don't need us to tell you why innovation matters. According to the Boston Consulting Group in 2015, 79% of respondents thought innovation was one of their three biggest priorities. Likewise, a 2014 survey of 500 senior leaders by the Center for Creative Leadership (CCL) found that 94% of organizations believe innovation is crucial for success. Yet, although 77% of these firms were trying to improve innovation, just 14% felt they were achieving success.
Often, companies put too much focus on making changes to their products or services, which are sources of external innovation. But what about internal innovation, which can be defined as changes made within an organization (e.g., adapting the hierarchical structure)? It's often overlooked.
Both types of innovation can help companies grow, avoid getting behind the times, and carve out a niche. However, internal innovation can be a more affordable and accessible solution since changes with more long-lasting changes. Once the people in a team have the tools they need to succeed, you free them up to create breakthrough after breakthrough.
Now, let's get to the good stuff. Innovation is all about taking action, so here are four of the best ways to drive it forward:
1. Create a culture of experimentation
By definition, innovation involves trying new things that may not have much precedence. But when you do something for the first time, there's a significant chance of you getting it wrong or failing. Combine this with an organizational structure where individuals are trying to climb the ladder by succeeding consistently, and the natural result is that most people will shy away from innovation in the fear it will hinder rather than help them. It's the responsibility of leaders to create a culture where the opposite happens, and everyone in an organization feels actively encouraged to experiment.
One way you can do this is leading by example. If the leaders in a company share their attempts and failures explicitly, it makes it clearer that trying and failing is accepted as normal in the organization. You can also make an effort to celebrate small successes along the way if they involve experimentation.
2. Use data to detect inefficiencies
Innovation typically involves finding something that isn't working, then implementing a solution. What's the most foolproof way to identify these problems? Data.
Collect data on your current processes, such as what happens in your meetings, how long different processes take, or what exactly different team members spend their time doing. Are there any areas that stand out as being particularly inefficient? If so, figure out how to address them.
Naturally, this analysis will involve some degree of data literacy, so you may need to train your team for the best results.
3. Encourage bottom-up ideas
When we hear about a huge innovation that's taken place in a company, we usually imagine the CEO or other executives are responsible, and they're often the people shown on billboards. In reality, though, the people who are best at coming up with solutions are those who are the most familiar with the problems — and that can mean low-level employees.
Unfortunately, most organizations don't provide any kind of opportunity for these people to share their ideas, never mind making them feel valued when they do so.
Once again, leaders have the responsibility for creating the kind of culture that encourages this. Why not make it part of your standard business meetings to leave some time at the end for people to give their own suggestions? You could also consider some kind of always-open form online for people to leave their ideas to be discussed in the next meeting.
4. Don't be afraid of new technologies
When you're familiar with a technology and can't imagine life without it, looking at someone who refuses to use it is painful. Imagine speaking to someone from the year 1990 who was reluctant to use Excel and favored pen and paper — you'd almost certainly feel frustrated. Yet, when we're on the other end of the change and are faced with a technology we don't understand, it's tempting to run.
On an organizational level, this can feel particularly daunting, since adopting new technologies could result in weeks of disruption as staff are trained and new equipment is installed. But ultimately, embracing technology will prevent you from getting left behind.
And on another note: If individuals in your organization feel scared of the new technology, be patient with them. They may be technophobic, especially if they're not in a technology-centric position. Do you need to provide extra training?
Innovation is yours for the taking. No two organizations are exactly the same, so you may have to adapt the four strategies above to your unique circumstances. However, one cornerstone principle remains: We're better off embracing change than shying away, and your organizational structure is the perfect means to do exactly that.