One of the take-away comments from a panel discussion on sustainability at the Innovate UK conference was from Jennifer Clark, Director of Environment at the construction firm Skanska and she said, “if there’s no room to fail, there’s no room to innovate” (because innovation, in its very nature, requires failure).
I’d never heard it put so clearly and it’s absolutely true.
One perfect example of this is one of my largest clients. They have recognised that one area where they have successfully innovated in is in their bidding process. Now they need to win business so it’s not in any way an insignificant process, but it is one where they will, in all probability fail in a percentage of cases and they probably know which bids are worth taking a risk and innovating.
They are significantly less innovative in their core business. The paradox of course is that where the need to innovate is the greatest (for example on a low margin project, product or service) their appetite to innovate is lower.
How is this insight useful?
Well it’s certainly useful in understanding why it might be so difficult to get senior people within your organisation to sponsor innovation projects, but more importantly it’s useful to understand where and how to focus your innovation efforts in the future.
Can you afford to annoy your customers and loose business? No. But if you go searching for new customers, you have less to loose so the appetite to innovate should be higher.
If cash-flow is poor you’re likely to get more traction looking for innovations that will free-up cash than ideas that require lots of investment to make a reality.
Can you afford to change something in the production process? Perhaps not. What about looking for the waste in the process? Is there a by-product or waste that could be used for something else – turning waste into profit?
This doesn’t just mean focus on lower risk areas of your business. No business is immune to disruption. Figure out where that disruption is coming from and seek to innovate to disrupt the disruptors.
A great example of that is another client who recognises that while they have been constantly innovating, improving and iterating their service (it’s an online business), every new thing they launch is copied by their competitors in a matter of weeks. They recognised that while drip-feeding improvements is good for their production process they are missing the opportunity to think about more disruptive innovations that their competitors will find hard to copy and therefore give them a longer lasting competitive advantage.