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Executive Education

How can companies unleash the power of innovation?

In our latest Executive Horizons survey, nearly 70% of respondents said their company actively promotes innovation and the majority gave their companies an average rating of 4 out of 5. But what are the main challenges facing companies that need to speed up innovation? What practical steps can they take to overcome these challenges and embed innovation into their culture?

 

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Why is innovation crucial?

Innovation is essential in the workplace. An innovative culture allows companies to break into markets quicker and more easily. It gives them a competitive edge and accelerates growth.

Innovation, however, does not necessarily have to be a momentous, game-changing disruption – small changes often have a big impact. Starbucks, for example, departed from convention by labeling their cups tall, grande and venti rather than small, medium and large. The founder, Howard Schultz, who wanted to style the company’s image based on the coffee bars he saw in Italy, conceived the idea. By differentiating the brand in this way, he gave Starbucks an edge in an extremely competitive marketplace.

 

The main challenges of driving innovation

Innovation is not without its challenges. According to our Executive Horizons survey, respondents thought the two biggest challenges to driving innovation were “having the necessary time and resources to make innovation a priority” and “the fear and acceptance of failure.” James Ontra, CEO of Shufflrr, a presentation management company, sums up this fear of deviating from the status quo, by stating, “We are all creatures of habit and treasure the consistency of routine,” he says. “Innovation breaks that routine and can sometimes feel like a threat.”

 

In general, it can be difficult for companies to question established industry formulas, especially if they have been successful in the past. The Duolingo app, for example, revolutionized language learning by incorporating elements usually associated with games – a process known as "gamification". This was a significant innovation in a language learning industry that had built its success around methodologies based on audiotapes, books and dictionaries.

 

Practical steps to promote and accelerate innovation

Over 85% of respondents agreed that companies can drive innovation effectively by “ensuring that innovation projects have the backing and support of senior management.” Sometimes this involves convincing your boss that innovation will create value and drive growth. Choosing the right moment to present your innovation initiative and drafting a clear innovation plan can help gain the support of senior management.

 

Respondents also felt that in order to drive innovation effectively, companies must “adopt a ‘test and learn’ culture that accepts failure.” In fact, when it comes to innovation, some of the ‘biggest failures’ have led to the greatest successes: penicillin and the microwave oven were both the result of accidents.

 

According to Executive Horizons survey participants, companies can drive innovation by setting “specific objectives that are measurable, realistic and time-bound.” Whirlpool is a good example of such effective and clear goal setting. The Chairman and CEO, Jeff Fettig, aimed to double the value of the company’s innovation pipeline over two years. This required executives to reallocate resources and to establish a set of comprehensive metrics. Without these metrics, Whirlpool would not have been able to reach its innovation goals.

 

Innovation is critical in the workplace, driving growth and success in the midst of fierce competition. The challenges – fear of change and lack of resources – that obstruct its effective implementation are not insurmountable. Learning from failure and gaining the support of management can accelerate its successful implementation. By taking measures to implement innovation effectively, a company can not only survive, but thrive.