Visionary, innovative, and leader are words that come to mind when you think of Apple or Amazon. But how do you quantify that elusive innovative quality some companies just seem to exude. Fast Company says when they rank innovative businesses they ask, 'what have you [the company] done for me lately'? Forbes takes it to another level when ranking the most innovative businesses, using a proprietary algorithm that tries to get into investor’s heads to identify firms that are innovative now and will be in the future.
Ranking the top most innovative businesses is one thing, but actually becoming an innovative company is a more difficult task as many companies value control over innovation. In a McKinsey poll, 94% of the managers said they were unhappy with their company’s innovation performance. Luckily, even if there’s not consensus on ranking businesses on innovation, there is agreement around common traits these businesses exhibit.
The mindset matters in innovative companies. Firms with a commitment to innovate go far beyond incremental goals. Elon Musk, the eccentric innovator who leads Tesla Motors, is transparent about his company’s moonshot goals.
Writing on the company blog, Musk outlined his goals to expand the product line to trucks, compact SUVs, public transport, Semi-trucks, make vehicles completely autonomous and driver free, have a fleet of driverless Teslas that will replace current rideshare options, allow you to rent out your self-driving car when you aren’t using it, and to create solar roofs with seamless battery storage options. This kind of mindset permeates through the organization and unites employees behind the innovative cause.
It can also help to define what the definition of innovation is within the company. The Harvard Business Review explains that, 'Having a practical, agreed-upon definition of innovation makes it easier to set goals for innovation, to allocate resources to innovative projects, to plan a cadence of innovative product launches, to target advertising on high-value breakthroughs, and to measure innovation performance.'
A Focus On Technology
As you read through lists of top-ranking innovators you’ll notice a theme: they’re often on the cloud, they use leading technology such as all flash arrays, and they aggressively use big data combined with advanced analytics. The Boston Consulting Group (BCG) pointed out these trends using Forbes’ 2016 Innovator’s list. Four of the top 10 firms were cloud-based, 65% of innovators mine big data and social networks for ideas and were 4.5 times more likely to use big data and analysis to help them with ideation.
Research is Key
Often companies spend more time on the development portion of 'research and development.' This is because building something is more exciting than trying to understand the audience and problem you are trying to solve. When companies have more of an internal focus versus a customer focus, they often fall victim to the echo chamber of similar opinions and are disappointed when they bring their uninspired product to market. However, successful innovators focus on answering the need before they even start working on the actual solution.
Part of research is challenging invisible orthodoxies and paying attention to underappreciated trends. Steve Jobs was a master at answering doing this and answerings the simple needs of the user. For example, he noticed how frustrating it was how power cords in the typical laptop wouldn’t disconnect easily. When someone tripped on the power cord, it would send the entire laptop crashing to the floor. So instead he made Apple laptops with magnetic power cords that come free easily. A simple solution but because he was hyperfocused on answering the problem, it led to innovative solutions.
Talent isn’t necessarily as important as letting employees have room to work and making sure they have access and collaboration with their colleagues. New ideas are often born while brainstorming with coworkers. At 3M an employee was working on developing a powerful adhesive but accidentally came up with reusable glue. Luckily his co-worker came up with a use for his glue and created sticky notes.
Daniel Pink, a leading business thinker, says that 'the secret to high performance isn’t rewards and punishment but that unseen intrinsic drive, the drive to do things for their own sake, the drive to do things because they matter.'