How to drive innovation and growth within organisationsPosted on: September 20, 2022
Innovation skills are critical to the future of business, organisations and employees. While start-ups and other entrepreneurial ventures are characterised by innovation – it’s a methodology generally baked into their core business ethos – many other businesses are not yet capitalising on the innovation process. As a result, they stand to miss out on what can lead to considerable growth and gains.
To most people, innovation may be linked with advances in technology – and it is, undoubtedly, a large element of many innovation projects. However, innovation in its strictest sense has a far wider remit.
What is business innovation?
Business innovation refers to changes to the core business and operations of a company that lead to growth – and, ultimately, greater profit and a healthier bottom line. There are many ways to innovate within organisations, generally linked to new products, services, processes, ideation and concepts. Common types of innovation include: product innovation; business model innovation; and process innovation.
For example, a company may strive to come up with a new way of working to solve an existing problem that is losing revenue, or launch new products to meet gaps in the market. Regardless of the business area in which innovation efforts are focused, the core aim is to increase revenue.
The benefits of business innovation
WeWork suggest a number of reasons why organisations should be keen to drive innovation:
- Navigating potential disruption. Business innovation has the potential to anticipate potential disruptions, and changes in customer needs and buying behaviours, that affect the market. This foresight allows organisations to adopt an entrepreneurial approach and make strategic adjustments to their product or service offerings, or business models, ahead of time.
- Increased efficiency. Organisations seek to lose out considerably when they are hampered with existing business processes that are unsustainable, costly, time-intensive or ineffective. This is why much innovation focuses on transforming existing practices and processes. Changes in this area help organisations to prioritise agility and save time which, in turn, reduces both risk and volatility.
- Talent attraction and retention. Work environments that promote freedom to innovate, welcome fresh ideas and celebrate the entrepreneurs among their own employees are likely to be more attractive to both existing and prospective team members. Particularly, as WeWork notes, millennials and Gen Z employees who may find fast-moving, mission-driven organisations who care about the future more attractive.
- Brand perception. Increasingly, many customers are opting to spend their money with businesses who they believe have a commitment to socially responsible, sustainable and innovative practices.
Of course, each of these elements also helps to increase competitive advantage and establish a wider innovation culture in its own right.
What drives innovation in an organisation?
Edward D. Hess, an authority on organisational and human high performance, states that innovation demands an empowering work environment that functions as an “internal innovation system.” He believes that to facilitate increased innovation, innovative behaviours need to be driven by alignment across:
- leadership behaviours
Innovation behaviours from leadership shapes culture
Let’s take the examples of leadership behaviours and culture: after all, the former plays a powerful role in shaping the latter. Business leaders who model effective innovation – and make their respect for innovative approaches known – demonstrate to their wider organisations that it’s a practice that is encouraged and rewarded. It’s linked to risk-taking and creative thinking – where unsuccessful attempts, or even simply the sharing of ideas and opinions – are instances to be celebrated. Employees feel empowered when they are given opportunities to help improve and shape a company’s future.
Some businesses have integrated innovation teams, responsible for advancing – or discovering – novel ways of conducting business, new ideas or directions that will either improve or increase output. What may be more impactful, however, is to break down silos of thinking by encouraging all employees to innovate where they see potential for improvement. Innovative companies, whose stakeholders see the value of innovation projects, are much more likely to witness the growth they wish to see.
Clearly, any innovation strategy or attempt is not guaranteed to be effective. Companies that are characterised by innovation – or that are seeking to adopt more innovative practices moving forwards – must choose processes that enable exploration, discovery and, perhaps most of all, cheap, quick experimentation. A roadmap that features innovative efforts of this type will be less likely to lose money and invest too much time in failed efforts, and more likely to try out a wider range of innovative approaches. However, unsuccessful innovations can still provide valuable learning opportunities – failure is part of the process.
Innovation in practice: Microsoft
Microsoft’s innovation strategy understands that innovation originates across all levels and functions in its ecosystem, rather than as a result of a top-down approach. This democratisation of innovation – supported by Microsoft Garage, a scheme designed to make grassroots innovation possible – created an empowered, motivated workforce and allowed the best ideas to gain traction. The company’s famous week-long ‘Hackathons’ are another example of giving employees space to create, innovate and test ideas.
In more tangible terms, Microsoft has seen considerable upheaval in its operations in a bid to remain future-focused, competitive, and relevant to modern consumers. Among other successful innovations, the company has: invested in artificial intelligence; championed the use of bots; focused on accessibility and inclusive design to better support its customers; and developed apps for both iOS and Android to integrate their offerings with technology that consumers are already using. It also acquired Minecraft in a $2.5 billion acquisition, gaining an invaluable foothold in younger audiences and embracing a cultural phenomenon.
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