Keep in mind that this is much easier said than done. Although organizations might gain a leadership position momentarily, maintaining it consistently is much more difficult to achieve. Furthermore, no company should expect to launch an innovation expecting the market to reward them with sustained growth and success. Instead, companies must stick with a series of radical innovations capable of leading the market.
To me, many entrepreneurs don’t realize that how they innovate will determine what they innovate. Rather than leaving the success of their innovations to chance, executives must use a combination of effective strategies based on fundamental rules.
With this in mind, I would like to share with you the interdependent rules of innovation that will help you redefine your industry:
Rule # 1 – Strong Leadership
Innovative companies have strong leadership, period. To illustrate, look at Apple and how Steve Jobs changed the company when he came back with creative innovations, like the iPhone and iPad, that changed our world. When Jobs passed, Apple appears to be getting worse under the leadership of Tim Cook and its last two iPhone 5 launches (C + S) yesterday failed to attract the market, causing stock prices to drop ~ 5.8%. Therefore, it is imperative that your organization exercises strong leadership in innovation strategies, including portfolio decisions. Remember, clear directions from the top of the organization permeate the entire company to motivate, support, and reward innovation.
Rule No. 2: Integrating innovation into business models
Successful organizations embed innovation in their mindsets and business models. These entities live and breathe innovation and ensure that it is an integral part of the daily operation of a company. By incorporating innovation into business models, including research and development (R&D) and new product development, entrepreneurs will increase their chances of innovative success in the years to come. Remember the adage … out of sight, out of mind? Well, it’s true, so keep your innovation in view at all times as you work to achieve your organization’s goals and objectives.
Rule No. # 3: determine the innovation needed for your business
Each company must determine the amount, including the type, of innovation necessary to achieve the company’s mission and vision. While innovation is the foundation for long-term success, it is not necessarily necessary at all times based on competition, market situation, product life cycle (PLC), time of latest innovation, and business strategy. Keep in mind that more innovation is not necessarily better. Therefore, entrepreneurs must determine the amount and type of innovation required that aligns with their overall business strategies and resources.
Rule No. 4 – Balancing creativity with courage
To be successful, companies must be creative while delivering value. This means developing creative innovations that deliver value to stakeholders on an ongoing basis. The more creative and beneficial the product or service, the better it will perform in the market. So how do you balance between the natural tension of creativity and courage? Remember that too much emphasis on value could stifle the creative process and vice versa. Begin by developing a balanced and structured creative process capable of determining which management practices act as a creative stimulus and which practices hinder it. Once determined, you can use those management practices to design value-packed creative products and services.
Rule No. # 5: neutralize threats
Entrepreneurs must also be aware of the many threats that an organization’s innovation capabilities face. Here is a list of some of the common threats to innovation that need to be neutralized and addressed:
- High management accommodating and resistant to change.
- Opposition from others because it is a radical innovation that goes against the status quo.
- Organizational culture lacks the courage to change, explore, and innovate due to company leadership.
As we know, innovation requires change. Therefore, companies must not only neutralize threats, but also foster a pro-innovation organizational culture that continually questions assumptions, along with finding alternatives to improve the overall business.
Rule No. # 6: build networks
One of the main bases of innovation is the creation of networks with people inside and outside the organization. By doing so, you would gain not only a network of critical knowledge for continuous improvement, but also strong partnerships that could help you achieve your innovations. For example, employees could help you improve business models; customer feedback can help you improve the products or services offered; other companies could help you innovate and optimize your business and your distribution channels. Remember, successful organizations are very effective at building networks and using a wide range of resources to achieve capital gains, goals, and objectives. You don’t have to take my word for it … just look at all the mergers and acquisitions lately!
Rule No. 7 – Configure metrics and rewards system for innovations
To ensure successful innovation, organizations must also incorporate systems that appropriately measure, motivate, and reward creative people. Whether positive or negative, everyone reacts to stimuli, and your organization’s innovation is no exception. In essence, you will never achieve your breakthrough goals if people are not adequately rewarded for their efforts.
So, do your best to create a carefully designed system that not only measures the success of innovations, but also rewards innovators with incentives for their hard work. Failure to do so would ultimately result in a daunting environment that lacks motivation, innovation, and a structured process to guide the development of ideas and concepts.
So why did I include strong leadership like rule no. 1 while listing metrics and rewards as the ultimate rule for innovation? The answer is simple. Innovation requires change and that starts with the leadership of the organization. When it comes to metrics and rewards, it comes last because it helps close the loop, measures innovation results, and provides motivation for remaining rules.
In the end, Steve Jobs summed it up best when he said that “innovation distinguishes between a leader and a follower.” By embracing innovation and incorporating it into the company’s mindset and overall business strategy, organizations could not only become leaders and redefine their industry, but also create new ones where the rules are in their favor. Although the innovation process is unique for each company, what remains constant are the 7 rules listed above. So follow these guidelines to become a leader in your industry and start innovating today!