Innovation - More than just "Magic"

What does it take to succeed in business today? Being the first to market with a new idea? Being better than everyone else in your field? Easy access to capital? They all help, but being able innovate is becoming more and more crucial.

History tells us a lot about organizations that failed to innovate, and one of the best examples is former movie rental firm Blockbuster. In 2000, the organization had the opportunity to purchase Netflix, but declined the chance because it failed to see where digital was taking the industry. Now, Netflix is valued at around US$32 billion, while Blockbuster filed for bankruptcy protection in 2010.

Things have moved on a lot since 2000, but the fact remains: if you do not find better ways to serve your customers, someone else will. Exactly how is the golden question you need to answer, and innovation is less mysterious than it may seem. Those moments of creativity that see a new idea born or a problem solved may seem like "Magic", but there is a more structured and deliberate way you can bring innovation to your organization.

IBM in 2014 launched the survey, ‘More than Magic: How the most successful organizations innovate’, explored 1,000 companies to see what we could learn about their approach to innovation. It was found that the top six percent of respondents for operating efficiency and revenue growth tackle innovation in a unique way. Looking more closely, we saw that outperforming enterprises differ in three ways.

• Build an organization that encourages innovation;
• Create a culture that fosters innovation; and
• Design processes that enable innovation.

While moments of "Magic" can happen within enterprises that do not do the above, these moments are rare and sporadic - but they do not need to be. Linked to the above traits, the survey found that companies can consistently innovate by creating structures and functions that align with and support their business mission. For example, compared to under performers, 84 percent more over performing businesses align innovation goals to the growth of products and services.

At the same time, high achievers are 17 percent more likely to actively encourage behavior that leads to innovation, by offering things like employee incentives and rewards. Over performers are also open to exploring a wide range of sources for new ideas. They are 79 percent more likely to use analytic and 23 percent more likely to use innovation to spark new ideas into life.

In the Middle East, the focus is on creating a culture of innovation, starting at the very top.  His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, launched the 10x initiative to put Dubai ahead of other cities of the world in terms of innovation. This 10x initiate will contribute to the implementation of the vision of Dubai as a city of the future, through new mechanisms of action that mimic the future, and contribute to the sustainability of the competitive Dubai.

In Africa, the mobile phone revolution has become a game-changer for the continent in terms of innovation. By 2019 there will be estimated 930 million mobile phones in Africa, almost one for every person on the continent. There is greater mobile penetration than electricity penetration. Now, people are able to connect, get news, trade, get access to healthcare and transfer money.

One of the biggest innovations to come out of Africa is mobile money transfer launched by several Telecom companies, which has disrupted traditional financial models by reaching out to large un-banked population. Mobile money has evolved beyond cash transfers to include payment of utility bills (such as water, rent and electricity), shopping, and paying government taxes. The value of mobile money transactions in only sub-Saharan Africa reached $655 million in 2014 and could surpass $1.3 billion by 2019, according to data by the consulting firm Frost & Sullivan. These are just mind boggling numbers.

The examples of Dubai 10x and Africa mobile money transfer show us innovation can be a key differentiation and benefit citizen and enterprises and it is not just "Magic". Innovation encourages disruption in the market and is a game-changer. If we see the the traits identified by the ‘More than Magic’ survey and apply then in a disciplined way, we can expect to conjure up the big and exciting ideas that make a real difference in the enterprises. These game-changing ideas are not "Magic", but they sure can feel like it.

IBM’s Global Business Services (GBS) consultants can help your enterprise to create ‘Magic’ every day. Click here to find out how.