The Principles of Business Innovation
Innovation and digitisation are hot topics on the board of any multinational today. But how do corporates turn words into action, to deliver meaningful initiatives that truly add value?
What is innovation?
To start with, it’s important to understand what we mean by innovation. Simply put, it’s doing something new that hasn’t been done in your company before. Often, it involves taking ideas that have been around for a while and linking them together or applying them in a new context.
The role of culture
Innovation demands a certain culture, where people feel empowered to share their ideas and implement new approaches: to test and learn. It doesn’t matter whether the ideas are small and low-impact, or larger, bolder projects. What’s important is that the people within the organisation have the energy and dynamism to drive change and seek new ways of doing things.
Within any organisation there are two forms of innovation; service improvement and value creation.
Service innovation describes an organisation seeking to change and improve what it offers to its clients and partners. It could involve adopting new technology or introducing new ways of working. The innovation could also involve applying new skills within the company. In the legal sector, the introduction of a project management approach is a good example.
Most commonly today, service innovation is driven by the desire to work more efficiently: delivering work more quickly, at lower cost or with greater accuracy.
The alternative involves applying innovation to drive new products or services and create new revenues as a result.
In the legal sector, there is a drive to harness the value of past experience and knowledge. By digitising previous contracts and cases, we can build algorithms that will identify trends and insights from our past work.
By examining past cases where cartel activity was proven, for example, we can design tools that can explore a company’s data to recognise whether cartel activity seems likely in the current context. Or, we could quickly identify the most appropriate clauses for a certain issue based on an analysis of numerous previous contracts.
This kind of value creation enables companies to extract the vast knowhow and experience that they hold, in order to create something new.
The challenge in all forms of business innovation is to retain control by ensuring there is a robust decision-making framework in place. With the pace of technological change today, there are so many interesting new directions to explore. But there needs to be a process by which to select the best ideas, so that the organisation can hedge the bets that have the most promise. All too often, organisations are tempted by ‘shiny toys’ that won’t deliver business value.
Delivering innovation is demanding and can be expensive. You need to be able invest both financially and in people resource to deliver the change required. Creating Innovation governance means you can make the right decisions for your business.
Many organisations today make public statements about ‘not being afraid of failure’ and their drive to embrace new ideas. But in reality, once investments have been made in business innovation it can be difficult to admit that the new direction has not been a success.
A few unfulfilled ambitions can quickly curb the appetite to innovate. Companies need to be realistic and not overstate their enthusiasm for risk taking.
The most important factor in delivering powerful and effective innovation is leadership commitment. Organisations that want to drive change need support and sponsorship at the highest levels. C-suite endorsement is the catalyst for engaged employees to propose, implement and prove their ideas.
Adam Hembury is an innovation, change and transformation specialist with more than 25 years’ experience gained across multiple sectors. His current role is Director of Innovation at DLA PIPER LLP. He has been a Russam GMS client for many years.