So You Want to Innovate? Here are 8 Drivers for Success!

Organizations that are successful innovators have the highest survival ratings. They succeed in retaining their relevance in a rapidly changing world where industries are shaken up, and incumbents stumble. They are loved by their customers and admired by their competitors. Being a best-in-class innovator is what distinguishes the leaders from the followers, the disruptors from the disrupted.

84% of CEOs see innovation as a key aspect for growth, and 80% believe their current business model might be disrupted. But only 6% of CEOs believe their own innovation results are above average (McKinsey study).

Based on our many years of experience with innovation, we have identified 8 areas in which truly innovative companies excel.

Developing a sound innovation strategy requires the ability to envision the future and to design, preferably disruptive, innovations that create value for your current and future customers. A strong innovation strategy aims to affect the entire business model.

It goes way beyond developing the next, slightly improved version of an existing product. It includes new service propositions, new revenue streams, new processes, alternative distribution channels, and partnerships. This requires a long-term perspective, a healthy ambition, and a profound understanding of your market.

Customer-centricity is all about making your customer and their (future) needs the starting point and top priority for innovation. Customer-centricity starts with truly understanding what drives your customers and how they perceive your business, its products, and its services.

Truly customer-centric companies frequently validate innovative ideas and prototypes with their customers to be sure they are on the right track. And throughout the innovation process, they continuously ask one simple question: “Does this add value to our customers?”

In an era of rapid change and multiple technological forces, innovation processes have to be agile. Traditional, sequential development cycles often fall short in terms of their time to market but also in terms of their success rates.

Best-in-class innovation processes have integrated the principles of design sprints, rapid prototyping, MVP testing and data-driven decision making in their innovation process. They recognize that multidisciplinary teams outperform the traditional functional silos that are still dominant in many organizations.

In many organizations, the biggest challenge is not defining new projects. The real challenge is setting clear priorities, choosing the right projects, and executing them successfully. Successful innovators master the art of Innovation Portfolio Management.

They monitor projects on well-defined metrics. They only continue projects with a positive business case, and they kill the projects that do not show economic viability and/or product-market fit. And they do so quickly! At the same time, they rapidly scale up the viable ones with the resources that are freed up.

Setting the right organizational conditions for innovation is extremely important. Innovation should be deeply embedded in the company and an integral part of your company’s culture and day-to-day business. Broad employee engagement is key to increasing your innovation power.

This can be achieved by clearly defining the responsibility for innovation, providing sufficient time for brainstorming, organizing innovation events, and by stimulating communication across functions and businesses. In addition to these internal measures, many innovation leaders have developed close relationships with the start-up scene to get access to the latest developments and potentially disruptive ideas.

Innovation leaders have one thing in common—they are totally serious about investing in the innovation skills and competencies of their employees. They train them in innovative thinking and tooling, and challenge them to use their creativity. They recruit young innovators and mix them with senior staff knowing that you need both experience and a fresh perspective for successful innovation. Finally, they understand the need for sharing best practices within their company.

“Culture eats strategy for breakfast,” Peter Drucker said some time ago. Yet too often, companies get stuck in discussing innovation strategy and processes while ignoring that their culture was the root cause for their lack of innovation.

In an innovative culture, creative thinking is stimulated, smart failures are celebrated (because they provide a learning opportunity), and employees are empowered to initiate and execute innovation. This calls for leaders who are committed—leaders who are personally involved and who reward innovation.

In the end, it all boils down to your innovation performance. Strong innovators make sure that they are innovating fast enough to compete in the short term, but also to have a pipeline of long-term innovation projects. They understand the importance of a short time to market and a rapid scale-up of their innovations, because rarely does a company have an exclusive idea or technology that they can monopolize for a long time.

It is crucial to outperform your competitors in all these aspects. That will make the difference between the disruptors and the disrupted.

In short: Any business can innovate and even reinvent itself. Yes, this often requires a long and sometimes difficult journey. And, as with any journey, it starts with knowing where you stand and where you need to improve.

The RevelX Innovation Readiness Benchmark is a great way to find out whether your organization has what it takes to become a best-in-class innovator. Gain insight in your performance on 50 innovation best practices, assess the disruption risk and measure yourself against industry leaders like Vanderlande, KPN, Holmatro, Spie, Alliander, Hunter Douglas and many others who have already participated in our benchmark.

Click here to measure the innovation power of your organization!