Innovation from within an organization - a step by step guide

Creating ‘innovation from within’ an organization: a step by step guide

1. The purpose of this innovation briefing paper

This briefing paper describes the required steps in creating ‘innovation from within’ an organization.

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2. Background on innovation

Firms are constantly looking to differentiate themselves from the competition, albeit, many tend to focus on price differentiation rather than innovation. This tends to be the quickest and fastest solution for competitiveness without investing in research and development. This often leads to focusing on short term results and returns, rather than long term stability and growth. This also makes it difficult to create a working environment, where new ideas are constantly formulated.

However, innovation does not just mean inventing, but the creation of dynamic products, introducing new or improving existing services, processes, and business models. Innovation can be a catalyst for growth while helping the business succeed, adapt, and grow in the marketplace. It is also much more than investing in development or improving products, processes, and services. It’s about having an open, individual, and collective mindset among people in an organizational setting, and the creation of environments for experimentation and creativity that have individual, as well as, organizational good outcomes.

Furthermore, for innovation to be successful, it should be built into the business strategy, which can lead to a culture of innovation and creative problem-solving. This also increases the likelihood of a business succeeding.

3. Innovation process, a key consideration before implementing a step by step innovation framework

Implementing an innovation process will lead to a structured strategy. While using a generic framework like design thinking, will help structure that innovation process. Of course, the methods and tools should be adapted to the company’s objectives. This will ensure that the team working on innovations will idealize an innovation and work with it until it is successfully implemented. An innovation process will provide the structure to face every challenge head-on and to take innovation seriously.

Without a structure or set steps to follow, the innovation process can seem confusing, complex, and unachievable. Implementing a structure will simplify the process.

The benefits of a structure include:

3.1 Increases business performance

Increasing performance through a structured step by step model provides the opportunity to identify and improve on the weak areas of the business. One example is if the team is great at implementing and coming up with ideas, but poor at analysis, it identifies analysis as the weak area that needs improvement. As a result, the structure yields positive outcomes, as it identifies weak points that may have gone unnoticed.

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3.2 Provide incentives and rewards

Usually, a team of at least a group of participants is required to carry out an innovation process. It is very likely, that ideas proposed will not be successful; some will fail terribly. However, others will be successful. Employees who are willingly participating in the innovation process should be given incentives and rewards for their efforts. Even if processes fail, this provides the incentive to continue innovating and learning from failures. Offering incentives and rewards will be the catalyst tool for motivation which creates an innovation culture.

3.3 Increase effectiveness and efficiency

Companies that embrace innovation as their core culture, can expect a more efficient business and workforce. This of course, depends whether innovation is adopted one time, or it becomes a continuous process. A structured innovation process can lead to the innovation being adopted for new or current markets.

3.4 Creates a form of urgency

Great innovations need time and are never urgent in nature. It usually happens over a period. They usually formulate as ‘hunches’, lingering in the shadows of the mind, sometimes up to decades, before it is transformed into something more significant1Johnson, S. (2010). Where good ideas come from. New York, USA: Riverhead Books, p.89 . However, innovations do create a sense of urgency for improving and growing the business beyond the status quo.

4. Further key considerations which support innovation

Besides the innovation process, there are a couple of other factors to consider when an organization is looking to implement innovation into the organization’s culture. These factors will influence the way innovations are managed and encouraged, what people in the organization will be involved in, and what type of work-spaces or environments innovation will take place.

4.1 Leadership

Leaders create the necessary environment that fosters sustained innovation at all levels. It is crucial to tune the organization’s processes and procedures toward entrepreneurial behaviour. The challenge is, management structures and bureaucracies, often impede and create barriers for innovations, especially in larger organizations. It is important to introduce organizational agility to reduce complex hierarchies, bureaucratic product/service approval procedures.

4.2 People

Innovation is at its best when ideas are developed and exchanged across different teams and multiple business functions. These group conversations allow for cross-functionality, with people of different functional expertise to work together. This creates an open social flow of group conversations. Every person in an organization shares the responsibility of innovation, as this makes everyone feel involved in building the business. The more people feel their ideas matter, the more passionately they will engage in innovation.

The key to success is, to create open communication and facilitate active collaboration in order to foster an innovative company culture.

4.3 Environment

It is important to establish a specific physical architecture for the work environment, as this will have a lasting change on the quality of ideas. It is best to have open spaces rather than closed offices to encourage the exchanges of ideas and not to inhibit serendipity, as innovation prospers when ideas and hunches can connect and stumble across each other2Johnson, S. (2010). Where good ideas come from. New York, USA: Riverhead Books, p.74, p.135, p.136. .

It is also advisable to consider creating an innovation center, as this could serve as a space where people can gather for design thinking workshops, innovative events, and brainstorming sessions.

5. Implementing step by step design thinking framework

Using a generic and basic innovation framework, such as the design thinking method, will highly encourage innovation from within. It is easy to use, which encourages those early, creative, thoughts that help build value propositions that can lead to new business models.

The five steps (it’s not always sequential) of design thinking are:

5.1 Step 1: Empathize

The first stage is gaining an understanding emphatically of the problem the business is trying to solve. This is understanding what the customer wants, needs, and objectives are. This also means to engage with them on an emotional and psychological level, so that design thinkers can set aside their own assumptions and gain a real insight into the customer.

5.2 Step 2: Define

The next stage is putting together the information that was collected during the empathize stage. This is where the analysis of the observations should now start to make sense. It should reveal things like, what is the biggest customer problem the innovation team needs to solve? What barriers do customers face? Once a clear problem statement has been established, solutions and ideas can now be formulated.

5.3 Step 3: Ideate

Once a solid understanding of all the customer problems have been established, armed with a clear problem statement, it’s time to work on a solution. This is the stage where all the creativity happens, and it’s time to “think outside the box”. This may involve using brainstorming or mind mapping to explore new alternatives and options, to identify new solutions to problems that were created in the problem statement.

5.4 Step 4: The prototype

In this step, it is all about experimentation by producing several cheap scaled down versions of the product/service that incorporates a potential solution to the identified problem(s) in the previous stages. The prototypes can be shared internally and perhaps even with trusted customers and partners, to test and highlight any constraints or flaws. During this stage, the prototype may be improved, accepted, redesigned or even rejected.

5.5 Step 5: Test

This is the final phase where testing takes place to complete the product/service using the best solution to any problems identified during the prototype phase. This is an interactive process and the results that are generated during this phase, go through further refinement and scrutiny in order to understand the customer needs and wants better. However, this is rarely the end of the design thinking process, as this phase may lead back to any of the previous steps.

6. Recommendation

Before implementing the step by step design method framework for innovation, all key consideration factors should be reviewed beforehand. Businesses that innovate, perform better, create better products, and tend to have more efficient work processes.

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References
1 Johnson, S. (2010). Where good ideas come from. New York, USA: Riverhead Books, p.89
2 Johnson, S. (2010). Where good ideas come from. New York, USA: Riverhead Books, p.74, p.135, p.136.

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