In a rapidly changing world marked by fierce global competition, companies need to embrace innovation in order to survive. But investing in innovation can be costly and CEOs are often afraid of taking any risk that might threaten their profit margins. So how can companies create the conditions for innovation to take place whilst maintaining their productivity? The article examines this crucial issue facing companies today.
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Innovation: “the barometer of a company’s vitality and value”
This was the conclusion of a recently published report entitled Innovate on the run: The competing demands of modern leadership that surveyed nearly 900 company leaders and more than 1,000 employees resident in the US and UK. The survey was carried out by BlessingWhite, a company with operations covering North America, Europe and Asia-Pacific, and who describe their mission as “reinventing leadership and the meaning of work”.
But what is innovation? David Neeleman, former CEO at JetBlue, sums it up as “trying to figure out a way to do something better than it’s ever been done before”. Innovation can also be categorised in terms of scale: the report talks about “big I” for breakthrough inventions and “small i” for incremental or every day improvements.
While the vast majority of company leaders who were interviewed agreed that innovation is everybody’s business, that every employee should play a part in it, a common concern was how to get the balance right. For example, Google has directed employees to spend 60% of their time on the job, 30% being helpful to others, and 10% to “thinking”.
Interestingly, the survey indicated a big gap between leaders’ good intentions and their ability to put them into practice. Only 26% of employees interviewed said that they were regularly encouraged by their manager to look for new solutions or to take risks. One reason given for this was that a company’s drive for productivity often competes with creating the time and space necessary for people to be creative. Another reason was that leaders fear to make costly mistakes. A Marketing Director at Microsoft said, “We’re less willing to take risks than we used to be… There’s more to lose.” However, as American inventor Thomas Edison pointed out, innovation cannot happen unless you are willing to experiment, “I did not fail,” he said, “I just found 10,000 ways that did not work”.
So how can the gap between good intentions and effective practice be closed? Perhaps most important, according to BlessingWhite, is to eliminate cultural barriers such as the blind drive for productivity or fear of failure. “Organisational culture”, they say, “like the air you breathe, touches all employees”. Inspiring leaders, such as Bill Gates, who find ways to involve all employees in their company’s mission, get results. Fluid two-way communication between managers and employees can help keep innovation in line with productivity. Employees who are constantly updated on customers’ needs know where to devote their brainpower and regular feedback keeps them on the right track.
Nobody doubts that maintaining productivity whilst fomenting innovation is a challenge, but according to this report, if a company does manage to achieve the balance, it will be a sure indication of its health and competitiveness.
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