How You Approach Innovation Is The Problem
Every time I read “Reducing sales prospects due to weak business cycle” cited as a reason for decreasing share of innovators in businesses, I sigh!! Isn’t that’s one of the problems that innovation needs to solve? Genuine innovations are hardly affected by the troughs & crests of the sales cycle. If it gets affected, then it’s plain-vanilla imitation or imitative innovation. Though there is no harm in imitating if you know what it is that you are trying to imitate.
Confusing technological evolution to innovation is one of the many reasons for the decrease in the number of innovators. What the companies operating in the digital era needs to understand is that technology, willy-nilly, will keep on evolving to another version. They should embrace the evolving technologies to enable innovation process within the organization. The ideal starting point to set up the process is to know the underlying objective i.e. what they want to do out of the following:
- Be an Innovator
- Bring Process Innovation
- Imitation based product innovation
- New-To-Market Product Innovation
International Vs Global Test
Innovation need not be just based on existing market demand but, something capable of creating a new need. Anything intended to create a new need often needs to go through the hammer of ROI; where almost most of them get nailed to nothing. If your organization still brings ROI to the table, then it simply means that you haven’t adopted the necessary technology to enable the culture of collaboration and the structure of the flat/teal organization. Innovation needs to be in your cultural DNA than siloed in the form of the department. A business’ capability to innovate and technological orientation determines its competitiveness in the digital era. One quick sanity check for your businesses, especially if having a presence across geographies, is to see whether you address your overseas center/office as “International” or “Global.”
If it’s international, then you operate from the profit maximization mindset, and if it’s global, then you work with a market maximization mindset. Global is the byproduct of the digital age.
A global business views the entire world as a single market where avenues to innovate are infinite.
It’s Not Profit Maximization
If the Theory by Schumpeter is the signal that your dopamine is sending to the cortex at this point, then let’s understand the said theory first. Innovation theory says, “Profit is the reward for the innovation.” It doesn’t say to approach innovation with a profit maximization mindset. The fact is that such profits are transitory and may gradually disappear due to imitation by others. Also, profits arise due to frictions; frictions being the lag in the market. Any individual or organization working on any form of innovation should focus on friction than the profit. The underlying goal should be on building sustainable friction. To build sustainable friction requires thinking for the future or long-term thinking. All one need to do is to make digital an ally for the war than simply using it as a weapon to win the battle.
One can always ask how to initiate the chain-reaction of innovation without losing the existing grip. It starts with creative thinking. Creative thinking is not about frameworks or templates. To innovate requires uninstalling the technology-driven mindset. However, it’s easier said than done.
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