Today, innovation is seen as the key way to achieve growth. Professor Keith Goffin, Cranfield School of Management, joined clients at this month’s Innovation Day to share his research on how companies can move from developing incremental innovation to achieving radical capability.
When implementing innovation, many companies tend to focus on, or fall back to, incremental innovation – the same products, same processes and same markets. To achieve real growth, it is vital to develop new features at existing or adjacent markets – breakthrough innovation – or develop completely new markets, products, services, and business models – radical innovation.
In order to be proactive in supporting radical innovation, leaders must:
- Define what innovation means to their organisation: There is no such thing as one universal standard of innovation that applies to all companies. The first step to be successful in innovation is to verify and define what incremental, breakthrough and radical innovation means to your organisational context. Next, agree on the right distribution of investment across these categories.
- Embrace failure: Be willing to take risks, instead of staying in the comfort zone. You need to change not only the processes, but also the culture. Failure is an inevitable part of building true radical capability in your organisation. Celebrate the projects that go through AND celebrate the projects that fail.
- Build a customer insight capability: Breakthrough and radical innovations require deep customer insights. One problem with asking customers what they want is that they often wish for the product to be better or delivered faster, which only provide, or pull your company back to, incremental ideas. Instead, observe customers to lead you in a new direction, with potential solid market grounds and model development.
- Transform the stage-gate process to achieve radical innovation: The structure of many companies today is that stage-gates during selection and implementation are not very effective in ‘killing’ new products or services. That is not really a problem when you know the markets and products. When developing new markets and new products, organisations should be ready to stop products before they go to market (for good reasons) or if markets are not accepting it. You need to make sure good ideas are also good business opportunities.
Clients at the Innovation Day – including HSBC, North of England CSU, Cafcass and Baxi – emphasised the importance of building a culture that stimulates, prioritises, and implements new ideas, in order to accomplish radical advancements.
Next, this group will explore how organisations can build resilience against cyber security. For more information, please view the Innovation Day page.