Innovation may be hard, but it’s not impossible

In a rapidly changing technology-enabled world, finding innovative solutions to business challenges isn’t just an option for back-room discussion, it’s a minimum ‘table stakes’ gambit for all C-suite leaders. Everyone is hunting for the next big breakthrough. But while the abundance of new technology may make it more straightforward to create the right solutions, actually finding and applying innovation is no easy task.

Motivated by the incredible growth of digital-native businesses – such as Amazon, Google, Spotify, to name a few – senior executives have seen first-hand how the creative use of technology and data can lead to the inexorable rise of new business models in already established sectors. The new mantra for business now seems to be “innovate and disrupt or be disrupted and left behind.”

MIT economist, Andrew McAfee believes digital technologies “are doing for human brainpower what the steam engine and related technologies did for human muscle power during the Industrial Revolution.” Innovation creates value. It allows us to overcome limitations and open-up new frontiers with unprecedented speed. As for Capgemini’s Chief Innovation Officer, Pascal Brier , it is all about creating an innovation-ecosystem: “If companies want to keep up with scientific advancement and drive innovation, they will inevitably need to master new technologies that lie outside their legacy core competencies.”

And this statement holds true. Indeed, Amazon started selling books from a garage in the 1990s and now sells cloud infrastructure to enterprises worldwide. Nokia’s rich 150-year history has seen the company operate in areas such as pulp production and rubber boats before moving into telecommunications infrastructure. Yet while the pace of digital-led innovation may feel faster than ever, it is also important to recognize that the activity of focusing on innovation and fresh opportunity is nothing new.

The crux is finding the right opportunity among the innovation melee. Harvard Business School research suggests as many as 95% of new product launches fail . This can be for many reasons but developing a successful innovation culture internally is certainly among them. In research conducted by both Capgemini and MIT, findings show that executives consider as little as ?9% of innovation projects to have internal resources and capabilities that are superior to other organizations.

Despite the importance of innovation in a modern business, organizations still struggle to find the right culture to foster and scale creative solutions to face today’s business challenges.

Innovating with an Applied Innovation Framework

When looking to push their innovation further, enterprises often encounter obstacles across the four stages of the Applied Innovation Framework: discover, devise, deploy, and sustain .

It’s difficult for organizations to create a culture and structure that allows employees to generate useful solutions to business challenges. While some organizations might see the glass as “half empty” and rebuff new ideas too quickly, others might see it as “half full,” becoming overexcited about new ideas and implementing innovations that don’t generate value. The organization needs to find ways to explore new business models, cutting edge technologies (e.g. TechnoVision 2022 ), and emerging opportunities, and most importantly define action plans that drive change..

It is one thing for an organization to generate ideas, but another entirely to be able to identify which innovations are actually worth investment in time and money. It’s important to not only validate the concept, but to also demonstrate the value that this new solution brings to customers and the business. The cost of tests and trials alone means the business cannot validate every single idea. Being able to place the right bets, at the right time, is crucial. Finding ways to get hands-on with emerging technologies is crucial, to prototype potential solutions and accelerate learnings.

By far the biggest challenge is deploying innovation at scale. It’s great when an employee comes up with an idea that’s been validated after a proof-of-value stage. However, that’s merely a starting point. But that’s merely a starting point. Implementing any new idea is a tough proposition. In fact, according to a recent Capgemini Research report , achieving scale is often cited as the number one barrier to realizing commercial goals across sectors and technologies. The organization must find ways to launch and iterate innovations at scale, so the entire business can benefit as quickly as possible.?

Innovation needs to be applied at speed and scale, with certainty, trust, intelligence, and responsibility. To embed, cultivate and become proficient in these required innovation capabilities, the organization will need to develop a culture, strategy and a form of governance that embeds and sustains innovation as a repeatable and successful process at the heart of the business.

It is feasible to assume that across the four stages – discover, devise, deploy, and sustain – a 100:10:1 ratio is to be expected. This means that out of 100 ideas, only 10 may be progressed to the validation stage, and from that, only one may be implemented at the end of the four-stage process.?

Taking innovation through the four stages requires discipline and structure. Innovation may well be all about inspiration – searching for that lightbulb moment – but it’s unlikely to happen on-demand in a darkened room. Rather than hoping for great ideas to simply materialize, business leaders must encourage and enable employees to think of them.

Facilitation is crucial. Support staff so they are not afraid to come up with radical ideas – particularly at the ideation stage. Too many are rejected right from the start and told their ideas will never work. In many cases, potential solutions will be dismissed before even reaching the testing stage.

Rather than shutting down internal creativity, actively encourage it and give employees space to think. Google founders, Sergey Brin and Larry Page famously advised their staff to spend 20% of their time working on what they thought would benefit the company rather than being bogged down in the day to day role. Draw inspiration here and encourage employees to take time out to think about new ways of doing things.

Also, look beyond the enterprise firewall. Don’t limit the corporation’s innovation horizon to internal staff only; great ideas can sprout from anywhere. Open and collaborative innovation is the only way to ensure the best and most diverse solutions. As Frank Wammes and Lanny Cohen noted in their podcast , “…highly collaborative, open innovation models have the real advantages in today’s market.” Build an ecosystem of creative thinking that draws on internal and external expertise. The ecosystem should include vendors, suppliers, university researchers, and startups who join in the ongoing innovation conversation.

These conversations should focus on any perceived challenges or opportunities. When the organization comes together – employees, business stakeholders and ecosystem partners alike – ask questions such as: What is the problem we face? Where can we improve the situation? And what can we do to eliminate the issue? Don’t “just” focus on what is known, cover a wider scope : "If companies want to keep up with scientific advancement and drive innovation, they will inevitably need to master new technologies that lie outside their legacy core competencies." (Pascal Brier, Dec 2021)

Most crucially, have an environment or platform to discuss, validate and check all ideas generated from this new collaborative innovation ecosystem - in Capgemini and MIT joined paper we referred to it as an “innovation architecture.” Take the IT or business challenge (or perhaps it is both in this new blurred world of Business and IT), discuss it with the ecosystem and use a framework, such as our Applied Innovation Exchange (AIE) , to create a place where partners can spend time – whether physically or virtually – to focus on ideation and maybe even testing.

Capgemini’s Applied Innovation Exchange (AIE) is our global platform for innovation. Here, we leverage our framework for the application of innovation – incorporating a curated global ecosystem of partners and Capgemini’s leading-class capabilities – to help clients build competitive advantage and achieve future industry leadership.

Initiatives such as AIE show the importance of developing an unconstrained ability to correlate and connect ideas. Any organization must have access to a dedicated capability to validate and test its potential solutions, including having online tools to help people share their ideas, among many others.

Finally, implementation: make sure your business can scale the ideas it creates. Organizations often fail at innovation because they fall into the trap of thinking that the hard work is finished once the proof of concept is accepted. But really, that's where the hard work begins – it's not where innovation stops. If it ever does.

While many companies are quite good at generating and incubating new ideas, Capgemini research suggests that they are less successful at scaling the results , for reasons ranging from over-reliance on technology, to a lack of focus on what their customers actually want.

Business leaders must treat the scaling of innovation as a specific and unique discipline. They should put in place the right innovation governance, with project sponsors and clear objectives. They should create a culture that encourages taking tough decisions on whether projects should be scaled up or down. And they should build expert capability that focuses on turning proof of concepts into tangible products and services.

Innovation matters because creative ideas are key to helping businesses to enter new markets and find new areas of growth; take it from the Amazons, Apples and Googles of this world. But it’s not just about the money. Embracing innovation will help your company to gain and retain talent too.

Regardless of the industry sector, innovation must be a core element of any organization’s business strategy. But while innovation is mandatory, it’s also difficult. Therefore – as a matter of urgency – think about how you can provide a platform to help your business discover, devise, deploy, and sustain its innovative ideas.

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