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Innovation Why and How

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Innovation Why and How

30/09/30/2016 posted by Paul Morrissey

We live in an era of digital Darwinism. As technology and society evolves, it becomes imperative that organizations also evolve their business models. Companies that don’t invest in counter- disruptive measures will learn that evolution doesn’t wait. Fifty-two percent of the Fortune 500 have merged, been acquired or have gone bankrupt since 2000. The threat of startups upending established sectors is greater than it has ever been. The Wall Street Journal now tracks over 100 startups globally valued at US$1 billion or more, over ten of which are valued at more than US$10 billion. These high-value companies are, in many cases, not creating entirely new markets, but rapidly eating into traditional sectors using a combination of superior technology and a compelling customer experience.

Over the last ten years, there are myriad examples of established corporates that have fallen on difficult times. Nokia, Blackberry and Kodak are just a handful of the many companies that have been disrupted, decimated or reduced to a shadow of their former selves, after having once dominated their industries. How can companies avoid this fate? The answer is: innovation.

Innovation Has Never Been More Important...Or So Difficult

In today’s highly competitive economy, innovation is more critical than ever. A recent survey of large corporations found that 65% of senior executives face increased pressure to innovate.

However, the challenges of innovation continue to defeat many. In 2014, around US$1.6 trillion was spent on R&D globally. Despite this significant investment, the results are falling short. In consumer goods, for example, research shows that more than 85% of new products fail, but Innovation is NOT R&D it is about thinking differently.

This is a significant concern given the intensity of today’s competitive environment. In recent years, tech startups are threatening or disrupting the fabric of many established industries:

Markets are becoming increasingly digital and mobile is becoming the preferred channel ‘Big Data and Analytics’ are being pushed by vendors as the next ‘sliced bread’ across all industries but what to do with them! We need to understand the problems that these new technologies need to fix first not a scatter gun approach but laser focused problem defined Innovation

Digital customers and employees are changing the game. Their behaviors, expectations and values no longer align with tried and true processes, systems and technologies in place now.

To excel in these times requires innovation, to protect against external threats and create new competitive advantage. But, many R&D teams at large and traditional corporations seem ill-equipped to respond. They can be constrained by legacy organizational models, risk-averse cultures, and a rigid approach. A recent study revealed that only 5% of R&D staff feel highly motivated to innovate. This is a worrying tendency given the urgency to innovate.

Enter the Innovation Factory

The weaknesses of traditional innovation approaches have led a number of ambitious organizations to explore different avenues and seek new inspiration. These organizations have launched innovation initiatives or full-blown innovation centers in major technology hubs with the explicit mandate to accelerate digital innovations. These innovation centers, comprising teams of people and often physical sites, are established in a global tech hub. The goal is to leverage the ecosystem of startups, venture capitalists, accelerators, vendors, and academic institutions that these hubs provide. However, we at Bolgiaten together with our partners WeareNova take a different approach to Innovation Analytics we believe in most organizations that people are running 1000 miles an hour to do their day job, and innovation though perceived as important is all too often considered a distraction. These organizations are what I call single sighted looking at Business as Usual in order to succeed in Innovation they need to become ambidextrous organizations and continue with ‘Business as Usual’ whilst transitioning to ‘Business of the Future’. We allow this to happen in a remote environment (The Nova Innovation factory) first by workshopping the actual problems that need to be addresses and validating that they are worth solving, not a scatter gun approach to problem solution but with a tried and tested methodology to problem definition and then solution development, with substantial Customer Validation before we apply any analytics to the problem. In essence it’s all about the problem and fail early if you can’t identify the need or create a Minimum Viable Product (MVP) solution.