Australia ranks 17th on the Global Innovation Index and is being outgunned by neighbours such as the Republic of Korea (14th), Hong Kong (11th) and Singapore (7th). Looking at how the green and gold performed on 'innovation efficiency’, Australia ranked 72nd. I could elaborate on Australia's innovation problems but I’d ratherpresentsolutionsso let's bust some corporate innovation myths and present some tips to counter these common lies.
1 - We are innovative
Your company has been around for decades, if not centuries, and your founder was the ultimate innovator. More likely than not, you've been peddling the story of your innovative founder but wouldn't be able to define 'disruptive innovation' if asked. Unfortunately, most large incumbents are founded on one-hit-wonders unable to replicate their innovative success to create new products or services. The cycle persists as big firms usually define innovation as incrementally improving current business models as opposed to disrupting them.
TIP: Cultivate a culture that truly supports innovation and change.
2- Shareholder returns priority
Yes, executive managers are ultimately accountable to shareholders - and so it's also the executive managers who need to manage the tension between executing on a robust long-term innovation strategy and short term, quarterly outcomes closely monitored by impatient shareholders. Fuelling this cycle is the short-termism that runs rife in large corporates .
TIP: Consider longer-term incentives for senior executives and better communicate the long-term strategies to gain shareholder buy-in. More on this in the Innovation Manager's Handbook.
3 - We don't need to innovate
Let's come right out and say it, you're scared. You've worked so hard to be a market leader and no one wants to mess that up. But you've gotten complacent about trying new things or won't because you don't want to cannibalise your share. I've seen this numerous times, you're not alone. But you're wrong. A recent study out of NYU and University of Minnesota has shown that “firms are most likely to introduce “radical” patents when their prior technological performance has been just below their aspirations, but such patents are most successful when introduced by firms performing substantially above their aspirations".
TIP: Innovation should remain a priority. The results of the study suggest that you can do so by focusing on extending capability in areas you’re already doing well in and cut back on research in the areas where you’re struggling.
4 - It's not ready for market
This is my favourite lie that corporates tell themselves because it immediately signals that we need some Steve Blank and Eric Ries goodness in here pronto. Enter the 'Build, Measure, Learn' framework. The aim of this model is not to build a final product but to maximize learning through incremental and iterative engineering. Thus, employee mindsets need to be refocused on to learning rather than perfecting.
TIP: Focus on learning in the early stages of your innovation projects, not generating financial returns.
5- We're under-resourced
If you're a small organisation, chances are you need more money and if you're a large organisation you need more time. This is where the beauty of scarcity comes in. Rather than betting the farm on one idea, make small investments in a few opportunities. The idea here is to use a low-risk way of identifying what could be the most profitable innovations.
TIP: If you're running a Hackathon at your company, spread the prize money over a few opportunities rather than awarding it all to one team. The same principle can be used with time allocation.
Can you relate to any of the above lies? How has your company tackled these? What other lies have you heard? Hit up our Twitter at @collcampus or drop us a line at firstname.lastname@example.org.
In this ebook, we provide an overview of how customer expectations are changing, what technology and business models are disrupting insurance, and how incumbents can drive internal and external innovation to best prepare for the disruption.