Going into the Covid-19 pandemic, almost all organizations were facing myriad challenges in terms of fiercer competition, more discriminating customers, longer sales cycles, and difficulty in differentiating their offerings, mostly due to tremendous advances in technology and a demand for greater transparency.
The pandemic has accelerated what forces were already in play, in addition to changing the way we all live and work, and devastating certain industries and business models. Now more than ever, every organization should be aggressively looking to innovate…or go extinct.
Every organization is different, with its own set of unique markets, customers and business drivers. As we work with our portfolio companies in helping them innovate, we start with the following 5 questions:
- How congruent is the way you innovate with your vision and appetite for innovation?
- How effectively do you articulate your vision and appetite for innovation to your stakeholders?
- Is innovation a crucial part of your team members’ job descriptions?
- Do you have the right processes to create and bring innovation to market?
- How do you measure ROI and your ability to meet customer expectations?
Tying vision to appetite for innovation – This is core to a company’s ability to succeed as it iterates and pivots. Is the innovation imperative part of your company’s DNA? Those who embrace creativity and boundaryless thinking are essentially building innovation into the way they operate.
Articulating your vision for innovation – It’s not enough to just think in a vacuum. It’s necessary to evangelize the need for different thinking and changing for the better. The most innovative organizations talk about their innovation goals and progress, and they actively share this with their teams, shareholders, customers, suppliers, etc. “Walking the talk” brings it all together for stakeholders and they can all participate to help companies innovate.
Team members as “innovators” – We have heard the mantra that “everyone is in sales.” Embracing this mentality has benefitted many companies and their employees. The companies who are most effective at innovating think that “everyone is an innovator,” and they actively engage all team members in formal and informal exercises and conversations for ideas on organizational self-improvement.
Processes for Innovation – This takes leadership from the top, and an assignment of resources to execute on the innovation imperative. The most innovative organizations create and implement innovation processes, measure results, and iterate off that feedback. This set of processes is a playbook for how companies can continue coming up with the best and most creative ideas.
Measuring ROI – The best kind of innovations have a direct and measurable ROI. Some will not be measurable, but will have benefits (examples could be improved employee morale, increased retention, customer lifetime, value, etc.) and should therefore be undertaken. The discipline of calculating ROI by itself is extremely useful, as it forces a closer examination of the various drivers of a business.
In summary, what we are looking for are the vision/desire for innovation, how it’s communicated, engagement of team in this effort, execution structure, and tangible ROI. The answers to these five questions will form a good foundation from which any organization can start looking at things differently and innovating its way to greater success.