These days almost every organization is discussing the need for innovation. There is no CEO that talks with me about the company’s strategic drivers without mentioning ‘building more innovation power’. Every government is claiming innovation to be one of its key economic drivers. Innovation is hot. And of course it makes sense! In my previous post I described the difference between focus on sustainable value creation versus focus on short term financial growth, and how the latter can jeopardize a company’s future success. It is clear that innovation has become vital for value creation. More than ever will it distinguish successful businesses from the less successful.
The point is, there is so much talk, discussion, and buzz going on around innovation that it makes me wonder: do we all really talk about the same thing? What do we actually mean with innovation? Are we maybe mixing up things? And which businesses are really innovative? What differentiates the successful innovators from the others? It triggered me to write this piece. I believe there are a number of misconceptions about what innovation really is and what it requires from leaders to actually lead a company to innovation. Three fundamental misconceptions stick out.
1. Innovation is synonym for change
There are many definitions of innovation. To mention just a view:
“The act of introducing something new” (the American heritage dictionary) / “A new idea, method or device” (Webster online) / “Change that creates a new dimension of performance” (Peter Drucker)
To create innovation is to put something new into the marketplace. Innovation can occur in products, processes, approaches, or services. This means that every innovation is by definition a change. But the reverse is not necessarily the case. Not every change in product, process or service is innovative. Innovation is almost always found outside what is known to us, outside our comfort zones! And that makes it different. Too often innovation and change initiatives are mixed up. Many change initiatives are actually improvement oriented and based on knowledge and examples that are already available in the marketplace (best practices, benchmarks, pilots), and are therefore not innovative. Real innovation requires a company to go first, to go where no one has been before; to be a leader rather than a follower.
2. Innovation is a business goal as any other
Innovation does not belong on the annual short list of business goals for the coming 12 months. Research shows that successful innovation depends on the level of strategic alignment in the organization: alignment between the corporate strategy, the innovation strategy and the corporate culture (see a recent study in S+B on this). Innovation is therefore more than just one of the business goals. It is more fundamental. It requires a specific innovation strategy and culture, based on a profound understanding of the external developments, how we adjust our strategy to it, which part of the business (products, services, processes, systems) we need to innovate, how we use our qualities and competencies to create innovation, which competencies we miss and need to develop, how we deal with trial & error and failure, how we will change the way we work in teams, how we will refocus resources. And it hugely depends on the power of the company’s leaders to let go of the past (see also my earlier post ‘the power of letting go’).
3. An innovation culture is something you can copy from successful innovative companies
Let’s have a close look at how successful companies have created innovation and do the same. Wrong, doing what others do is not innovating! You can learn lessons from others, but you will have to translate those to your own reality. Companies are unique, because their people are unique. Creating innovation successfully requires a corporate culture that is aligned with your specific innovation strategy and is based on transparent values, rules and guidelines that encourage innovation oriented behavior in line with this strategy. Based on people who have adopted an innovation mindset that is specific to your company’s reality and challenges. Needless to say that the leaders (starting on C-level), their leadership style and their behavior, are important if not crucial in creating and stimulating such a culture.
Feel free to join the discussion by sharing your ideas and experiences below. I look forward to reading your comments.
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As international business consultant, change leader, leadership facilitator and executive coach Aad supports executives and leadership teams of multinational companies. Over more than 20 years he has acquired a vast experience and expertise in leading complex change, cross-cultural leadership, post-merger integration, and amplifying business performance. If you are interested, find out more about Aad and his services. If you would like to hire Aad, don’t hesitate to contact him here.
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LeadershipWatch 
Wow! “Innovation is not a synonym for change”. When you said that, it immediately hit me between the eyes. I find a lot of “change” being labelled as innovation out there, and indeed within my own circles, yet it’s what we’ve picked up from somewhere, or just an improvement. What a shame that such a buzzword has been reduced to mere “tweaks” in systems and processes.
The aspect of leadership being crucial is quite true. Setting the pace and allowing the innovation to happen is something that is rare to find. In my experience, they say “innovate”, then put so many restrictions and rules that it’s impossible to “fail safely”. People are too scared to think outside the box because there is a massive stick waiting for them.
If innovation is to succeed, the strategy must include what happens if we fail, as you’ve so rightly put.
I feel much more relaxed about innovation now, because it is exactly what I thought it was, not what I was told.
Thank you for a great post
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Great comment. The role of leadership is indeed crucial and often overlooked. Thanks for sharing your experience.
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Great article. I like the idea of copying culture to foster innovation, but this is really not so easy. To change a culture always takes a long time for becomming innovative maybe this is to long. But I comp0letly agree on the importance
Kind regards from Germany
Hansjörg
http://www.der-bank-blog.de/
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Hansjörg, you’re right that cultural changing takes time. Though I believe creating innovation and the required culture can go hand in hand. Don’t wait starting innovation initiatives until you have reached the ‘right’ culture, do it simultaneously. Take care and thanks for stopping by!
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Clarifying the sweeping scope of what it takes to create a truly innovative culture, beyond business goals and buzzwords, is a very helpful, especially framed as common misperceptions. I’m constantly amazed THESE days at how much institutions struggle with getting outside of their corporate boxes to listen to those who can help them change perspective. Those inside the box must be the implementers and self-changers to fully embrace innovation as a positive change.
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