Fostering innovation for long-term organizational success
Leaders need to foster and embrace innovation in their companies to unlock long-term organizational success.
For businesses in most sectors, continuing to adapt, focus on and embrace innovation is critical when it comes to standing out from competitors and overcoming oversaturated markets — ultimately cementing your long-term success.
In fact, according to one study eight out of 10 digitally maturing companies say innovation is a strength of their organization, as they report constantly driving toward digital improvement and investing more in innovation than less mature organizations.
But as Deloitte’s 2021 Innovation Study found, for some companies, innovation has become both a business-critical concept and a buzzword that means nothing at all.
To avoid simply paying lip service to the broad concept of ‘innovation,’ which can result in missed opportunities and put you at risk of falling behind the curve, leaders need to nurture an environment where productive, valuable ideas can genuinely flourish.
For many, the key to success means zeroing in on the ideas and processes that offer the greatest value and exploring how best to encourage creativity across your entire team.
Here’s how you can shift towards a management approach that fosters innovation:
Move away from hierarchical management structures
Although most of a company’s business knowledge required for innovation comes from non-management employees, says the Harvard Business Review (HBR) — many consider innovation outside of their remit. Others may be discouraged from participating in the process by cultural norms or organizational barriers like authority bias. As a result, allowing bottom-up innovation to thrive requires a move towards cultural flatness.
As McKinsey explains, flattening and unstructuring your company can unlock a great deal of long-term value. When you minimize management layers and ‘decentralize’ the innovation process, your company can gain greater speed and agility to move at the pace of change.
As an example, Google takes a decentralized approach to innovation, where different product groups are encouraged to work independently of one another.
This approach will help you empower the front line of your organization to make decisions and enable those closest to customers, clients and products to have a voice and collaborate – allowing for more rapid innovation and effective decision-making.
Focus on offering value to the human experience via technological advances
Making moves to integrate more artificial intelligence (AI) into the workplace can help employees find better, more efficient ways of doing certain tasks, freeing them up to think more creatively.
As HBR notes, automating processes by using smart technology can make workplaces “more fulfilling and less exhausting” for employees. However, it’s important to note that employees should still be responsible for tasks that require empathy and intuition.
Essentially, smart tech can take over the more mundane tasks, leading to a more manageable employee workload and reduced stress, allowing people to focus on other activities like problem solving and intuitive decision making.
For example, time-saving software, such as online collaboration or project management tools, can take basic processes out of employee hands and add valuable time to their schedules, so they can take on more innovative tasks.
Develop a system to identify where innovations may arise
As an absolute necessity to the long-term growth and success of your business, innovation and potential innovation needs a metric. Just like sales and marketing initiatives, you need to know where you should be directing your attention – and your funding.
As CEO World magazine explains, while it is a creative process, innovation is also about discipline, so it can be measured – as long as your company is clear on what you mean by innovation. For example, is innovation something new and disruptive in your industry, or simply an improvement to your existing products or services?
Implementing a system to take stock of where innovation is happening in your business is not always easy, according to the Mack Institute for Innovation Management at Wharton. For example, while some companies look at financial metrics like percentage of sales from new products or revenue growth, it’s hard to link this data exclusively to certain innovations or processes.
Instead, consider process effectiveness metrics when measuring innovation, says the Mack Institute, such as the percent of projects that are major improvements, number of new products launched, average time to market, cost/investment and patenting activity.
If your company is ready to unlock the tremendous value of fostering innovation, you need to have a solid plan with concrete steps to analyze and support your company’s journey. That includes having the working capital you need to achieve your goals.
Need a reboot to your cash flow strategy to support your growth plans? Contact a Liquid Capital Funding Expert today to learn how our alternative funding solutions can help you be ready for anything.