New report looks at the gap between innovation and turning ideas into successful products, services or strategies
Often it is something that has been gradually crafted from the smallest seed, while at other times it may just pop into our head in an instant.
Either way, an idea is just the start – finding a use and turning it into a profitable product, service or strategy quickly enough is the difficulty.
Failure to do so is putting organisations at risk, according to a new industry report by Cass Business School, on behalf of cloud software provider VMware, which explores the gap between where ideas originate and how they are executed within businesses.
Titled Innovating in the Exponential Economy, it reveals the need for a culture of greater risk-taking and experimentation – but not “knee-jerk” moves.
Professor Feng Li, head of technology and information management at Cass Business School, part of City, University of London, says: “The shift to digital has forced organisations to think differently about how they are organised, how they bring ideas to the table and the way they deliver and measure these.
“The future is difficult to predict and many new ideas risk becoming obsolete before they are implemented.
“My research reveals that it is the combination of leadership, culture and technology that will turn great ideas into reality at the pace required.”
The report made four key findings:
Don’t dismiss digital disruption
Such is the rapid pace of digital change that transformation fatigue can set in as business leaders become bewildered or disinterested.
But the report warns this is dangerous. On average, industries are still less than 40 percent digitised, meaning even more radical disruptions are inevitable.
Organisations must keep adapting to new developments in cloud, artificial intelligence (AI) and machine learning, big data and internet of things (IoTs), as these lead towards a new type of exponential growth potential.
But Prof Li warns it creates a “winner takes all” battlefield characterised by big winners and, potentially, many losers.
“An incremental change can lead to a huge competitive advantage,” he adds.
Innovation isn’t always about creating something new
Reinventing the wheel plainly isn’t going to happen. Instead, new business models can be about adapting existing strategies and techniques for a new space – or adopting multiple business models as a portfolio.
Prof Li says: “By combining new business models, it makes the whole business a lot more competitive and resilient.
“Innovation isn’t necessarily about creating something new, it’s about adapting ideas from one domain for another.”
Innovation by experimentation
The traditional linear relationship between innovation and execution, rooted in a level of guarantee and pre-defined outcomes, is outdated, says the report.
A company’s future path and destination are difficult to predict so it needs to be able to green light an idea quickly, implement corrections as problems arise and learn from those actions on the go.
Prof Li says many business decisions are reversible and waiting on ideas to be fully developed before beginning to execute can be extremely costly as new ideas become obsolete before they are implemented.
“Most ideas are actually pretty useless but the difficulty is how you find those nuggets of ideas that will generate the returns,” he adds.
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Don’t think in isolation
Bridging the innovation-execution gap poses significant leadership challenges around culture, risk, technology and impact.
Chief executives and managing directors should encourage a culture of innovation in which the brains behind ideas are rewarded either financially or through career progression.
However, such changes shouldn’t be at the expense of thoughtful planning as this could lead to “quick-win” initiatives being prioritised over more strategic ones.
“Organisational culture is coming back really strongly,” says Prof Li.
“If you’re trying to change the culture you’re trying to change someone’s personality.
“It’s necessary to change formal rules and procedures but translating those things into behaviour means there are a set of unwritten rules in the business that must also be considered.”