Why are some large companies very good at innovation and others more likely to drop the ball? Earlier this year, Oracle sponsored a survey, conducted by the Economist Intelligence Unit, to answer that question. The survey queried 226 senior executives across a wide range of industries, and some of the findings may surprise you.
Bob Evans, senior VP of communications at Oracle, wrote about the survey for Forbes. He discussed 10 strategic insights one can glean from the survey's findings to help encourage companies to “improve their efforts ad identifying, nurturing, and generating innovation.”
What stood out for me among the insights is that, conscious or not, the lack of innovation is a choice. Innovation isn't something that happens just when you hire geniuses; it happens as the result of a series of decisions and encouraged behaviors. For example, one often sees large companies suffering from “silos” that separate one department from another (such as IT and marketing) and stifle innovation. But Evans notes that this is not a rule; in fact, “big companies have to relentlessly fight the tendency toward innovation in isolation.”
Assuming you actually WANT to see more innovation at your company, then, how can you help make it happen? One way involves bringing more people into the process – specifically, your customers. Go out of your way when you're designing and testing new products to interview your customers and find out what they think. Doing this will win you more loyalty from your customers, who now have a psychological investment of sorts in your next product. Additionally, as Evans points out, “relevant innovation in a customer-free vacuum is impossible.” How will you know what your customers want if you don't ask them in some way?
This brings me to the topic of social media as a way to reach out to customers and the world. One can do a lot with social media, but here's a sobering statistic: global management consulting company Accenture reported that more than half of their clients – sixty percent, to be exact – still think of themselves as social-media novices. Evans insists that company leaders who are not serious about social are being irresponsible. Anyone who is serious about encouraging innovation should embrace this new means of engaging customers; as I pointed out above, customer communication assists the innovation process.
Consistent with the rest of these points, Evans explained that innovation can come from anywhere – which makes the title of “Chief Innovation Officer” somewhat dangerous. BT Group managing director Jean-Marc Frangos stated in the Economist Intelligence Unit report sponsored by Oracle that “Innovation is not something a special team does – it is something which must be ingrained in the mindsets and behaviors of everyone, and for which, ideally, there should be no special process.”
Indeed, when all levels of a business hierarchy get involved in the process of innovation, everyone benefits. Evans cited Kaiser Permanente's experience in this regard. The health care provider utilizes a number of “innovation centers” to improve patient care, but the ideas to do so come from every level of the organization, including nurses and patients. In fact, these lower levels spurred three of the company's more successful innovations: text-based reminders for patients; neon-colored uniforms to reduce confusion; and portable clinics.
I'm going to leave you with one last insight from Evans, but in my opinion it's critically important. Say your company tried out a new idea, but it didn't work. Do you know WHY it didn't work? Companies that manage to successfully innovate learn as much or more from their failures as from their successes. This means actually putting a formal program in place to study the problems with the attempted innovation. If your company does not do this, it has “invested time, money and other resources in a failed innovation effort without finding out what went wrong.”
That's bad on several levels. If a company does not know what went wrong with their last innovation effort, how will they know that their next effort won't fail for the same reasons that doomed the last one? Looking at the situation from an accountant's perspective, learning something from the experience means that the company gets some kind of return on investment from the resources they just spent – at the very least, it may save the firm from making the same mistake again. Even innovation-wary executives can appreciate this kind of reasoning.