It seems these days we cannot browse a company website or see any of their collateral without being told about how innovative they all are. It is in slogans, mission statements, proposals, you name it, it’s been included there. But what do they really mean when they say they embrace, foster or drive innovation?
Three categories of innovation application
From my experience, efforts to embed innovation in companies can be classified in a spectrum loosely defined by three categories.
At the product or service level
The first one and generally the easiest one to understand and apply (at least conceptually) will be to apply it to the product or service we offer. More often than not, this is likely to be an incremental innovation built on the existing product or service with an extra layer of user centricity and insights.
Within this category you can also have various degrees of application. On a basic level, think of a mobile phone developer giving users yet another camera. Useful, and perhaps a great enhancement to the previous version in terms of the experience, but unlikely to have a massively different impact in the value proposition.
On a more impactful level, think of a public transport provider truly assessing pains and gains for all customer segments and rethinking all their stations design and customer touchpoints to ensure inclusion of all types of ability, positively influencing the lives of thousands on a daily basis. This can be literally life-changing.
At the company structure level
The second category is when you start to integrate innovative processes and frameworks into the ways you operate and organise your teams to carry out your work. This category is all about turning the lens inward to begin to shift the company into a new way of working.
This can take the form of a reorganisation of business units or reporting lines to enhance collaboration and shared success; or assessing your current procedures and policies and changing them to align with the overall objectives of the organisation; or even training your teams to approach their tasks as designers, constantly looking to improve not only their outcomes, but the way those outcomes are achieved. Once this mindset becomes the norm in the majority of your core teams, your company’s culture starts to shift to one of continuous change, testing and iteration. This is when the real magic happens.
At the business model level
The third and final category happens when you apply these design processes to re-evaluate your business model and the way your company provides value, effectively pivoting to drive sustainable profit growth through different revenue streams. Think of Netflix cannibalizing their rental business to move to streaming, or Lego generating revenue through movies, video games, and partnerships. In this third category we tend to find, generally speaking, two types of businesses: the visionaries looking to evolve before change happens to them and the ones realizing they need to pivot very quickly to remain relevant due to a rapidly changing environment.
Does the order of implementation matter?
Does this mean that this is a one-way journey, in which each category is a milestone? Not really. A company may start at the product/service level and realise that it needs to also adjust its processes to support this shift. It can also launch itself straight to redefining its business model and gradually works its way into defining what that means for its teams, processes and frameworks, which in turn will be reflected in the products or services being offered. It could be the case that a company can have different teams working at different elements within this spectrum, sometimes concurrently.
Regardless of whether you start at the product/service level and work your way up to the business model, or establish a differentiated strategic vision for the company and work your way down into the product/service level, the one thing to keep in mind is that this will be a cultural transformation challenge in terms of moving the collective mindset of the organisation toward one of experimentation, testing and learning. Dr Carol Dweck calls it a growth mindset.
The challenge is that these behaviours need to be fostered at the individual level while still managing to deliver a cohesive message from a company standpoint. Understanding your individual teams through an empathy exercise will likely reveal that different groups have different pain points and barriers, so the framework needs to be solid enough that it provides a single company identity, while being flexible enough to adapt to the needs of each user group, down to the individual.
What is one action you can implement this week as a result of reading this article? Give it a go and let me know how you go!
