ARE YOU STUCK IN AN INNOVATION RUT?
We all know we need to innovate to compete. However, acquiring the knowledge and the capabilities to innovate can be daunting, if not an insurmountable challenge for many organizations. In this brief article, we consider some of the challenges, and then invite you to complete a brief self-assessment to see if your organization is ‘stuck in an innovation rut‘.
The pace of change continues to increase. What was satisfactory yesterday is either no longer wanted or superseded by something better today.
Globalization, competition from developing countries (low labour costs), the easy access to knowledge and the speed of communication, the advance of technology and rapidly changing consumer tastes are driving this change.
Change brings both danger and opportunity. Changes must be sensed, interpreted and then acted upon.
Charles Darwin said ….“The species that survived were not the most intelligent – they were the most adaptable to change”.
Failure to Innovate
A business that is not growing through new product and service introduction is likely to be in decline, as its existing sales portfolio inexorably matures.
The role of business is to create wealth (added value). This added value is used to reward the stakeholders (employees, providers of capital and government through corporation tax) and then to sustain and develop
The business through investment for growth (R&D, capital expenditure and amortization of acquisition goodwill). Failure to create enough added value will jeopardize growth.
There are serious risks of ‘INERTIA’ for most organizations today:
- Competition intrusion
- Loss of market share
- Product obsolescence
- Declining margins
- Business close-out
Barriers to Innovation
There are a number of factors that prevent innovation from occurring. Being able to recognize and work through these factors will help you to create an innovative culture in your organization and help you to make your business successful. Some of the top obstacles to innovation across industries include:
LACK OF LEADERSHIP
The most common barrier to innovation in organizations is a leader or manager that is not open to new ideas. This negatively impacts the team by discouraging creative thoughts. Employees won’t be motivated to come up with new ideas if nobody is going to bother listening to them. There are also managers who listen to ideas but are reluctant to take them any further, resulting in lost opportunities. Just because something hasn’t been done before doesn’t necessarily make it a bad idea.
LACK OF TIME AND RESOURCES
Time and resources are also significant barriers to innovation. Employees are often so busy with just doing their regular work that there is insufficient time and incentive to generate new ideas. When ideas are generated, they are not taken any further due to the potential risks associated with developing the idea.
SHORT-TERM FOCUS
Innovation is also often seen to be too expensive for many businesses to get involved in. Where they do, management may have a very short –term focus, and often expects a very rapid payback. This approach tends to build caution and to stifle creativity. However, there are cost effective ways to generate new ideas and managers need to look at the potential benefits that come as a result of investing in innovation.
LACK OF SYSTEMATIC INNOVATION STRUCTURES AND PROCESS
Often, organizations lack direction in terms of innovation. Whilst people require freedom to be creative, some boundaries or guidelines can help focus their efforts and motivate them to achieve outcomes. Without structures and innovation management processes in place, the wrong ideas are be prioritized and time and resources can be wasted.
LACK OF ABILITY TO MONETIZE IDEAS
Organizations with the inability to implement and commercialize (monetize) new ideas are the biggest barrier to innovation. After spending the time, resources, and effort to develop an idea, they fail at the final step and the product is never successful in the market. It takes careful management and planning, as well as commitment from an organization, to generate profitable returns from good, innovative ideas.
LEARN MORE
Is your organization ready for change? Is it equipped to innovate? Or is it stuck in an ‘innovation rut’? Have a look at our online course in LEADING INNOVATION and some of our range of courses in Innovation and Change Management
