Innovation is about changing behaviours – it is about people
Our focus is on culture change. Innovation practice will die if the culture of the organisation does not support a systematic process embracing the creative thinking, the customer focus, the risk taking, the multi disciplinary collaboration, the non-hierarchical communications, the right to fail and a committed leadership, all of which are essential parts of a successful innovation culture. But culture change is challenging. It demands that people accept the need for change, that they willingly take on responsibility for living the change. It requires that they face the inherent risks and make the necessary investment of their own energies, both physical and intellectual, to achieve success through new ways of working. It means acknowledging that there are new and different and even better ways of doing things – meeting customers’ expectations is no longer the gold standard. Now we must seek to exceed their expectations, to delight the customer, external or internal.
The use of the word ‘delight’ is significant. It is a word that connotes emotion – it implies that any transaction is valued for its meaning and symbolism as much as for its practical and tangible value. It means that, alongside the quantifiable and objective constituents of a product or service, we must also take on human behavioural aspects – and it is almost invariably the latter that will sell your offer. Partly this is the result of an increasingly sophisticated consumer base – advertising agencies since the Second World War have not only sold us products and services in all their diversity – they have also been teaching us, generation by generation, how discern quality, how to value quality, and how to aim for quality. With quality being generally defined as ‘fit for purpose’, consumers have been taught to be more discriminating, more self aware and more aspirational. And more demanding. Today, in an unmitigated buyer’s market, suppliers rarely compete on objectively measured features – faster, longer, thicker, thinner etc. The real differentiation occurs in the connection the seller can make with the buyer – how do you make them feel? What does buying your product mean that they are telling the world about themselves? Capture that and you will taste success.
But only ‘taste’ success. One of the changing elements of the 21st century market place is its fickleness. The terror that all artists face of creating that second piece of work, the second book, the second production, is now faced by companies across all sectors. What was good is no longer good enough. The consequences are that companies and organisations, large and small, no longer can take their markets for granted. Formulaic development quickly leads to market fatigue – consumers perceive intellectual laziness, a lack of inspiration and creativity, a failure to commit to their delight. So innovation becomes the mantra, the concept becomes the driving force and the process becomes the sine qua non of sustainable and effective organisations. In order to meet this constantly changing environment, organisations need to look again at their constructs. Large companies risk the solidification of silos, hierarchies and habits. Small companies face the disruption of unforeseen copycats and competition. No one can afford to stand still. But, importantly, no one has the monopoly on innovation. For the last ten years or so, it has been a truism that innovation and entrepreneurship go together ‘like a horse and carriage’. Thousands of small and micro businesses sprung up, aided and abetted by the new breed of venture capitalists, to launch market disruption whilst the big companies, liked beached whales, could only look on. But now that is changing. The financial situation has made VCs much more cautious; access to finance for micros and start ups has become even more difficult, whilst the potential for overnight copycats has grown exponentially, supported by increased connectivity, emerging economies’ skills and low labour rates. At the same time, big companies are learning that, by taking a big breath and changing their culture, by opening themselves up to new ideas from across the organisation and even outside, by making exploration and discovery and customer focus essential parts of everybody’s job description, and by acknowledging that managing creative talent demands styles of leadership very different from traditional practice, they are slowly beginning to make dents in the innovation agenda. It is likely to be a long haul, but it will come. All the evidence indicates that companies that don’t change will not be around in the next ten to twenty years[1]. We have been warned!