How can you tell if your company needs to innovate?

We start our monthly newsletter with the general concept of what corporate innovation is and the elements to take into consideration to understand whether your company needs to innovate.?

The concept of innovation is becoming more and more persistent inside the corporate world and even in the startup ecosystem. This is not only relevant for delivering new products, services and keeping a competitive advantage in the market, but also for having a positive impact on a company's revenue growth.?

Previous research, conducted by MIT Sloan, based on a sample of 154 businesses, showed a positive correlation between the number of innovative ideas adopted by a company and its financial results in terms of revenue growth and profit.

Furthermore, a crucial aspect is represented by the constantly changing market. For this reason, companies are required to adapt quickly to shifting customers’ needs in order to better overcome future challenges and “unexpected” events.?

However, the gap between aspiration and achievement seems as big as ever. This brings us to the following questions: what are the obstacles that prevent companies from innovating? Is it the internal misunderstanding of what innovation means? What is the actual need to innovate?

Let's have a closer look at what are the major elements that help managers understand whether a company needs to innovate, and which is the best way to do so.

Definition of what is innovation

The word “innovation” can represent different meanings for every company, and even for each department inside the corporation. If the specific meaning has not been defined internally, then it will be rather difficult to comprehend what innovation is needed and which new ideas can be classified as relevant for the business’s success.?

Many original ideas and concepts are born from the collaboration of innovation managers and the other teams working in the company, but not all of them are worth taking part in the corporate innovation strategy and processes.?

In some cases, employees can be internally dissatisfied with their company's innovation performance. Perhaps, one of the reasons is the fact that team members have a different understanding of innovation and, therefore, they are measuring company's performance by considering distinct variables.

Furthermore, if a company's future goals are not clear to all employees, then the following business' steps to follow can be confusing.?By individuating the business's weak points and the areas where future investments are required, it would be much easier for stakeholders to understand where to put their time and energy, and which approach to adopt in order to develop new ideas.?

Defining the word innovation and aligning stakeholders would make it clear to the company whether they are moving towards corporate innovation or whether they are actually maintaining a static position in the ecosystem.

Different types of innovation

Innovation is not always about developing a new product/service or improving the existing ones. The concept can be extended to other departments as well. Therefore, it is necessary for a company to consider every single element of their business to reach corporate innovation and differentiate from the competition.?

There are three main types of innovation:

• product innovation, which deals with the development of new products/services, or improving the existing ones;?
• process innovation, which deals with the improvement of the operational aspects to make processes more efficient;?
• business innovation, which refers to remodeling the strategy or the business role in the sector.

Corporations can be innovative in processes, but for example, if teams missed opportunities in the product or business sector, it would represent a huge setback.

Aligning all the levels of stakeholders

One of the most common management problems inside a company is miscommunication between the departments. Communication not only refers to the execution of activities but also to make clear the different problems that have occurred as well as finding a way to solve them. There might be problems that only staff knows, problems that managers and leaders know and problems that only executives recognise. Therefore, all stakeholders need to keep tight communication to share those blockers and figure out if they require innovation or if they can be solved through simple reorganisation.?

By conducting these analyses, the company can improve its strategy in terms of where to concentrate the team members' energy.?

Now it is your turn to answer. Do you know what the obstacles in each department of your company are and whether they are caused by a lack of innovative processes?

External help

You can not do everything alone.?

A common assumption inside the company is that all innovations need to be initiated and implemented internally. In reality, it can represent a major blocker. Being open to external help can lead to a variety of undiscovered opportunities. Moreover, it is not only about developing new ideas for products or services, knowing what is going on in the market, what your competitors are doing, and what are the newest trends is just as important.?

However, this type of knowledge can not be acquired simply by brainstorming. External tools are needed.?

Therefore, every company should assess and quantify the information they gathered about the external environment and whether they should take some type of innovative approach to fill in the gap. For example, startup scouting platforms can be a great solution both for promoting collaboration between big corporations and innovative startups and for market research.?

According to you, what are the current most common obstacles preventing companies from reaching corporate innovation?

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