Disruptive innovation enables companies to do business in ways they never could before! However, its turbulent track record promotes scepticism among business leaders. Anxiety about failure, criticism, incomprehensibility, and the impact on organization holds top management back from embracing and dealing with innovation.
For many companies, innovation is difficult to understand and implement. There remains a clear discrepancy between how corporations and start-ups approach it. As a result, corporations are looking to start-ups and innovators to identify disruptive ideas and opportunities for their business, and to unlock innovation through the spirit of entrepreneurship.
Think ‘innovation’ and the chances are you will probably think of a start-up business rather than a company from the stock market.
In times of upheaval or deep uncertainty, companies must carefully balance short-term, cost-cutting innovation, that is more predictable, and executable with potential breakthrough options. Opting for breakthrough solutions that are less predictable could cause significant, hard to manage, business disruptions, that could bring little to no benefit in the long run. As a result, many corporations are looking to learn from start-ups - often through strategic partnerships with very notable success.
So how not to lose by introducing and using innovations?
Generally, the meaning of "innovation" is very broad, and everyone puts their own understanding into it. It is my strong belief that it is necessary to maintain a certain balance between innovation and demand. From the business perspective, innovation is the ability to create, design, deliver, and scale new services, products, processes, and business models for customers.
Successful innovation delivers new substantial growth for the company. It has always been essential for long-term value creation and resilience.
Still, the question remains: how to build processes that capture and test a wide range of breakthrough innovative ideas?
Companies that lose the most money on disruptive innovation tend to do so by not investing in too much innovation, or by grabbing one big idea, irrationally betting on its immediate success, and then redesigning it to meet unrealistic expectations.
To be in-line with desired expectations, successful innovation requires answers on three important questions:
- Who is our customer and what problem is innovation solving for him?
- Is this innovative solution attractive and can it be implemented?
- What is the business model of this innovative solution and how does it create value –can it be monetized?
By finding answers to those questions, it will give you a better understanding of how to approach innovative drivers.
Agility is a key success factor which is highly promoted by flexible and lean organizations. Companies should start looking for innovation within the organization - among business partners, customers, suppliers, and in relation to competitors - especially start-ups.
Start-ups regularly pivot business offerings to best meet market demand. They can respond to challenges and opportunities with ease because of their agility.
Disruptive innovation doesn't have to cost multi-millions of dollars -it should pay off quickly. Once approved, the ability of a breakthrough project to produce quick outcomes - ideally profit from the start - is key to its long-term survival.
In fact, the greatest barriers to disruptive innovations are frequently organizational!
The ongoing focus on digital transformation as a driver of innovation reflects a shift in the market where organizations are increasingly merging the functions of innovation and digital transformation.
Companies have a heightened focus on digital transformation programs that need to be revised to meet new consumer experience. Customer experience innovation continues to be an important driver of innovation for companies of all sizes. This reflects the increasing emphasis on human-cantered design / design-thinking approaches.
Every kind of organization must seize the opportunity to transform itself into the new normal. Companies that want to create a thriving culture of innovation must act systematically and purposefully. This reinforces the importance for boards and senior leaders to regularly communicate the organizational intent to maintain a culture of innovation.
In addition, innovation leaders must focus on constant internal and external communication. This will enhance their approval and support for innovative behaviours and encourage employee actions.
Organizational innovation priorities need to be aligned with employees’ beliefs from all levels. This provides an opportunity for innovation leaders and top management to link innovation programs with employee engagement and wellbeing initiatives. Engagement creates a priceless sense of belonging and security by sharing a true commitment to innovation. Companies should empower employees to find confidence in experimenting with new things, asking difficult and controversial questions, and giving constructive feedback.
While most executives recognize that disruptive innovation is strategic, few know how to make it an integral part of their business. By adjusting the organizational values to drive breakthrough innovations and create processes and allocate resources to support them in the long perspective, businesses in many sectors can make breakthrough innovations profitable and repeatable.
So, there is no need to be afraid to encourage experimenting and attracting solutions from the innovation market.
Companies need to understand that releasing business problems into this market will create a high demand and in the long run the innovation market will be able to surprise you with a variety of solutions that will not only help grow your business but prepare it for the future!