The 'corporate unicorn' of creative disruption has an allure, and there are certainly times when radical change is required. But while dramatic stories of disruption make great headlines, for far more organizations, innovation focused on achieving significant improvement in existing lines of business is a surer - and more profitable - bet for driving actual results.
So, while the quest for more radical innovation should not be neglected, organizations should not underestimate the impact that innovation in their core businesses can have on performance. While most leaders feel confident that their organizations are doing a good job improving the existing business, there often is far more potential to be unlocked.
To do so the way in which leaders create and manage initiatives to drive innovation is critical. The context for innovation in large organizations is fundamentally different than those in which small companies operate. To drive real growth, leaders must pursue innovation by creating conditions where innovation can thrive in the larger organizations, allowing them to tap into the full potential of the current business.
In our experience, an organization’s existing business generally offers a rich and often overlooked potential for innovation that significantly drives results. One of the most fertile areas is in how companies go to market. Opening new channels, finding ways to shorten sales cycles and working with customers in different ways, to name a few examples, all represent opportunities where strengthening innovation muscles can drive top line growth.
For instance, Nomacorc, a leading provider of closures for wine, recognized an opportunity to accelerate revenue by developing more innovative approaches to launching new products and penetrating major accounts. Teams were challenged with building these capabilities by significantly improving the company’s performance in both areas within 100 days.
'Game changing innovation doesn’t happen often,' said Jay Cummins, VP of Nomacorc’s Global Sales. 'For us, providing focus in areas using our core technology and core systems is radical in itself. It’s digging your heels into what we’re all about, and then exploiting that in ways we hadn’t thought of before—or had thought of, but didn’t have the power to marshal resources, put a plan together or think about things in different ways.'
Creating the Conditions that Enable Successful Innovation
Startups get the headlines for big ideas and innovation, but they don’t own the concept. The key is recognizing that large, often complex organizations require a different approach. Our research has shown that leaders can significantly stack the odds for success in their favor by ensuring that teams charged with delivering on innovation operate under four conditions:
1. Constant energy. Innovation requires energy. Leaders can cultivate this energy in any size group by communicating a compelling vision, setting high expectations, staying engaged and making quick decisions. This creates urgency that taps into the intrinsic energy of teams, helping to stimulate their creativity and drive.
2. Creative friction. Productive conflict generates better ideas. Leaders can generate this creative friction by putting together interdisciplinary teams and setting up the space and communication channels where teams share, debate and exchange ideas, ideally face to face— and when conflict arises, making sure it is productive. These steps ensure an environment in which friction works toward a positive end instead of being destructive and isolating.
3. Flexible structure. Innovation efforts that are overly structured don’t yield results. Leaders need to emphasize goals and end results, and set boundary conditions rather than manage a fixed process and plan on how to get there. This helps empower teams to make better decisions and move more quickly to react to new insights and developments along the way. Encouraging a flexible structure, delegating authority and eliminating complexities in the corporate environment will go a long way toward achieving groundbreaking innovative results in even the largest and most bureaucratic organization.
4. Purposeful discovery. Proof-of-concept on the fly and rapid testing will trump endless months of planning. Leaders need to create an environment that encourages learning, in which failure is just another part of the path to success. Making ideas tangible by experimenting and iterating prototypes is the best way to navigate the ambiguous task of innovation. And putting the user and their needs first from the very beginning is the only way to get the selection criteria right.
Each of these conditions are interrelated, and all four must be present to increase the odds of successful innovation.
The 4 Conditions in Practice
To benefit from the four conditions, teams should work with methodology for pursuing innovation challenges. In the case of Nomacorc, the teams used Schaffer’s Rapid Results approach, which focuses teams on achieving significant goals in accelerated time frames. For instance, one team, challenged by leadership with making measurable progress in penetrating major wine bottler accounts, set a goal of getting actual purchase commitments from three of the largest U.S. accounts (which Nomacorc had been trying to penetrate for years without success).
This was a particularly difficult challenge since large buyers have a 6-18 month sales cycle to test new closures. By testing different approaches rapidly and efficiently, the team challenged accepted wisdom about how major accounts buy, shortening the sales cycle and enabling them to generate revenue from an important sector of the market that had previously been closed to them.
A second team was charged with taking a recently launched product and driving growth significantly beyond targeted projections in one country. The team set an aggressive goal for generating new customer purchases within 100 days. Achieving this goal required rethinking virtually every aspect of their existing marketing and sales tactics, from how they trained distributors to generating publicity. And they had to experiment with new ideas and learn quickly what worked.
As a result, the team not only exceeded its goal, but also created momentum that enabled them to generate more than 200% of their annual target for the entire year. Equally important, they developed a fundamentally different set of approaches to introducing new products that has become a model across the company.
In both cases, leaders ensured that these four conditions were in place, enabling teams to learn, innovate and drive measurable results effectively. Tight time frames and the need to move quickly fostered the energy and creative friction necessary for cross-functional teams to develop and execute different approaches, and to blow the whistle quickly and unsentimentally when the course had to be changed.
And in both cases, the teams achieved results that far surpassed what they or their leaders believed was possible. The benefits went well beyond the significant increase in sales and major account penetration, as the learning from these efforts has migrated across the company. The product launch team has now become an important asset for piloting other new Nomacorc products launches.
- Don’t overlook opportunities to innovate in your core business
- Innovations don’t have to be radical to have a big impact on performance
- Focus on cross-functional teams
- Empower team members to make decisions, then test hypotheses
- Freeze the goals and the time frame, not the plans
- Encourage experimentation
- Ensure teams have a method or framework that creates focus and helps the teams to navigate the ambiguous task of innovation
Every organization has the potential to perform at a higher level, to innovate and to stimulate the entrepreneurial energy that can drive long-term and sustainable growth. By focusing on areas of real opportunity and creating the conditions in which teams are empowered to work across borders to develop and put new ideas to work, companies can unlock that entrepreneurial power and achieve measurable results.
Logan Chandler, is a partner at Schaffer Consulting and author of Off-Sites That Work (Harvard Business Review). Connect with him on LinkedIn. Markus Spiegel, a partner at Schaffer Consulting, has published insights from his consulting work and research in many formats including Forbes Media, Leader to Leader, Research in Organizational Change and Development and has spoken at several international conferences. Connect with him on LinkedIn.