Business Guide to Innovation

Innovation in business is about new ideas, products, services, marketing and distribution methods, but it’s also about the culture of an organisation. Success isn’t just about satisfying a desire in the market but also creating growth for that desire. So, what are the necessary characteristics of a business that will encourage innovation?

The Panel:

Sonja Bernhardt, CEO of Thoughtware, an IT company specialising in human resources services, and software development

Robert Dew, founder of consulting firm Coriolis and innovation lecturer at the Queensland University of Technology

Rowan Gilmore, CEO of the Australian Institute for Commercialisation (AIC)

Roger La Salle, creator of the La Salle Matrix Thinking method and author of several books on innovation, including Think Again: Innovate Your Processes and Harvest the Untouched Wealth

Lyndal Thorburn, managing director of Innovation Dynamics, a technology advisory firm

Drive innovation

Robert Dew: There needs to be recognition to innovate, a recognition that it’s worth it and almost a business’ only option.

Roger La Salle: All companies need to be a moving target. They need to constantly innovate their products, processes and services to give their customers a better offering to move them to a better place.

Lead on innovation

Sonja Bernhardt: The CEO of a business sets the tone. Leaders and managers should display both innovation and an appreciation of innovation in others.

Rowan Gilmore: Ensure the buy-in of company leadership. The AIC works with a number of companies wishing to innovate, but it takes committed leadership not to fall by the wayside! The board needs to have innovation firmly on its agenda.

Roger La Salle: It has to come from the top. A senior manager has to have key performance indicators so that innovation progresses, otherwise it won’t happen.

Create a culture of innovation

Rowan Gilmore: [Businesses require] a culture where it is acceptable for staff to try things in new ways, and where employees feel safe in pursuing innovation.

Roger La Salle: The process needs to be systematic and able to be embraced by people at all levels of the organisation. It it’s too airy-fairy or complex, they’re going to think it’s a joke.

Provide resources

Robert Dew: Make sure there is an environment where innovation is properly resourced–the time to innovate, a budget that can be invested in innovation, expert availability, help with implementation and someone who will help with getting innovation accepted within the organisation.

Rowan Gilmore: Assign the most viable ideas a budget and resources for further investigation and development. Actively project-manage the development process to ensure this ‘commercialisation’ phase is successful.

Capture ideas

Sonja Bernhardt: [Businesses should employ] genuine brainstorming activities where thoughts are not rejected as soon as they appear but captured, explored, expanded on, and valued for later analysis.

Rowan Gilmore: Formally capture ideas from staff, customers and suppliers, and external collaborators such as research organisations. Continuously review those ideas along axes of technical, financial, and market risk.

Lyndal Thorburn: I’d recommend regular whole-company meetings that address progress and provide input to development of new product/service concepts. There need to be internal systems so that ideas can be proposed by staff and considered within company strategy.

Install a selection process

Robert Dew: Innovation is not just coming up with new ideas but choosing the right one. Effectively it means you need to find out where you can get approval inside an organisation—in a normal chain of command, if I go to my boss and he doesn’t like it I don’t have any chance of moving it forward. Reinventing the Corporation (by John Naisbitt and Patricia Aburdene) recommends decentralised decision-making where there may be three or four internal investors who are actively looking for innovation in the company and have a reason to say yes.

Manage risk

Sonja Bernhardt: Risk-averse people have difficulty being innovative as the risk aversion blocks thoughts and rejects ideas before they have been explored. To borrow something from a PR campaign—and be non-innovative!—just do it.

Roger La Salle: You need a way to evaluate the effectiveness of the innovation. The biggest risk in business is market risk. If you want to lower the risk of bringing out new products and services you need to find what’s doing well and go back to the market with something better than what people are buying.

Recognise and reward innovation

Sonja Bernhardt: Recognise and reward people’s great ideas—any idea that thinks differently, considers different angles, views—not just the ‘winners’ [of the selection process].

Roger La Salle: To encourage innovation there have to be rewards. The rewards only need to be a six-monthly competition and a night out to dinner for the team.

Manage innovation as an asset

Robert Dew: Implementation has to be based on an idea of open innovation where even if you can’t use the innovation internally, you will work out how to license it outside.

Rowan Gilmore: A business environment needs processes where ideas become transformed into intellectual property (IP) and where IP is considered and managed as an asset.

Roger La Salle: Protect innovation with patents. If we can protect innovation, Australian companies can survive in a market with challengers like Chinese and Indian manufacturers, if we have IP.