It has been a while that we have been hearing the term “Innovation” almost everywhere and we have been lured to believe in its existential importance. But how many of us have taken a moment to pause and think what exactly Innovation does to one’s business?
CIO Magazine rightly points out the insights of Colliers International CIO Mihai Strusievici who had been dealing with the pressure of developing fast and efficient business solutions quickly. He says, “We can create applications very fast, but our business partners may have expectations that if you do it fast, that you also got it right on the first attempt, iteration is harder to accept than one would believe.” This has made the global real estate services team face many challenges as innovation was taken from theory into practice. The biggest worry for Strusievici is the realization that most of the business heads have become frustrated with what they perceive as half-cooked ideas. “I don’t know if the [internal conflict] will emerge as creative energy, or if it will bring [innovation] to its knees out of fatigue.”
This is not just the case of Strusievici. There are many Strusievicis out there who face similar challenges when they measure the new ROI - Return on Innovation.
For many, Innovation isn’t just a representation of novel devices, ideas or methods but the process of revealing a new way of doing things. It can also relate to transforming enterprise models and conforming the changes to attain optimized products and services. To sum up, innovation is nothing but a consolidation of creativity and work which makes a process that utilizes the creative ability.
In the enterprise ecosystem, CIOs are in search of business solutions that are novel, inexpensive and caters to their business needs and values. Therefore, for an innovation to thrive, it must be reproduced without being too expensive when solving the specific need. Businesses who vigorously take up the innovation as an opportunity in a highly dynamic business environment are more likely to not only survive but also flourish adequately in the middle of harsh economic conditions. They employ innovation as a technical and strategic tool to build an agile culture to initiate improved business processes.
IDC foresees that by 2022, around 80% of the business revenue growth will depend on the digital offerings and operations. This reinforces the notion that there is very little room when it comes to project failure or an obvious tolerance for the quick and simple.
Getting Innovation to scale up correctly from an idea to its phased implementation is extremely difficult for even the experts within the business ecosystem. KPMG report on Benchmarking Innovation 2019 states that 60% of the executives who are responsible for Innovation and strategies have cited competing priorities as one of the biggest challenges in scaling Innovation where 59% stated that company culture was another key challenge.
Catching up with advances in technology, Innovation leaders are developing their business with IoT, AI & ML, Data Science, cloud computing and via social media. The scaleups in Innovation have been also changing the very basis of the competition that companies had. The increasing accessibility, and availability of innovative business solutions had made a hunger for the enterprises to become Innovative leaders in their fields.
Innovation doesn’t have to be something humungous like the next IBM or Microsoft. An excerpt from a CIO Magazine article called What Really Makes Something Innovative? reads, “Sometimes it’s those quiet achievers who can make just as big an impact without having to be ostentatious about it.” It’s just that you must be original in your concepts - pro-active, self-assured and confident to take the risks and get it done quietly.
“The problems that I’ve seen with innovation is, we look for ROI in every single project that we try to innovate. You need to have a venture capitalist mindset, especially when it comes to innovation. The company needs to say, ‘I need to invest in 10 ideas, and even if two of those succeed, it can benefit the company.’” says Satya Jayadev, Vice President and CIO at Skyworks.
He has set three non-financial metrics to measure return on innovation: the number of Innovation projects it brought to the table, the number of projects amongst them that really got into a Proof of Concept (PoC) and the number of PoCs that went to actual production stage. In FY2019, thus out of all innovative ideas that were brought to the table, 60 got into PoC and 40 got converted into production. He says these metrics clearly indicate the value of innovation across the business.
For a business to have an edge in quick-penetration and better connectivity of the markets, Innovation has proved to be vital with its ability to lead them to bigger opportunities.
1. Constantly verify and publicize success
The innovators who successfully bring out Innovation take an idea or a hypothesis and scale it up through small executable steps. Throughout the process they constantly verify and publicize their success to their stakeholders.
2. Test cheaper and faster
An effective way for Innovation teams to get on the right track is by developing the efficiency to experiment quickly in a cost-effective manner to generate reliable learnings than others in the same domain. The KPMG study has stated the ability to test, learn and iterate as some of the key enablers of success.
3. It’s OK to drop an idea
It’s always better to drop an idea that might drain you. According to KPMG, giving too many attempts can result in having insignificant impacts on projects. Because for innovators, failures are steppingstones to success.
KPMG survey states that even though organizations push themselves to be more tolerant to failures, it’s not something that they are going to embrace forever. The enablers of return on innovation will always be the right support from industry thought leaders, the right strategy for the innovation initiatives and a team with the optimized skillsets to undertake the project. Together an innovation program can thrive and sustain beyond the trapped value that anyone including the business domain and company culture accepts.
Let’s together build something amazing.