News & Views

Opinion / Getting Innovation Right

by Contagious Contributor

Shane Atchison, CEO, Possible, on how traditional companies can improve processes and measurement to succeed at encouraging innovation throughout the business

Lately, it seems like ever-buzzing conversation about innovation has taken a practical turn. In chatting with CMOs at larger brands, I’ve heard a consistent question: How do I structure myself to succeed at this?

It’s a good question – much better than asking how to innovate in the first place. The focus is not how do I get great ideas, but rather how do I set the table for my people to come up with great ideas?

While there’s no perfect answer, we’ve worked with both startups and large brands, watching them all try to do innovation in one way or another. As a result, we’ve become something of innovation voyeurs, with a good handle on what works and what doesn’t.

To start, successful innovation at a big company rarely looks like that of a startup. When companies declare they have a ‘startup mentality’, it sounds great. However, in practice, if the company isn’t, in fact, a startup, the whole idea is culturally foreign and different constraints are at work.

By contrast, traditional companies that succeed at innovation usually stay within the normal lanes of their businesses. They treat innovation much like any other business initiative – with a few twists. Here’s how:

Define it. Know what it is you’re trying to achieve with the program. Take Ford, for example – it wanted to be seen as an innovative company, and to do that, it needed to put new things, like push-button hatchbacks, on cars first. Overall, the definition focuses not on a particular technology (we must build an app), but on improving the customer experience (open my door for me).  

Operationalise it. Set out a clear input/output process for innovation. Define not only how research flows into ideas, but also how to turn them into something concrete. When Amazon and Google innovate, they have a process for bringing the new products to market. That’s as important as innovation itself.

Work on it part-time. This is not an ironclad recommendation, but it helps when people working on the innovation remain involved in the business. Google’s 20% rule, though impractical for many companies, falls into this category. Another strategy: appoint a part-time team that works across the customer experience. This allows innovation to occur because a person discussing a service issue came into contact with one working on a product issue, and they realise there’s a way to solve both problems at once.

Incentivise it, but not in a traditional way. Good innovators have KPIs and ways to track progress – that are not centered on profit and loss. Did you create a new service? Did you improve an existing product?

Socialise it. Broadcast the work of innovation groups. This way employees are aware (and excited) about what’s coming. And prepared, as opposed to the skunk-works approach that suddenly foists a where-did-that-come-from innovation on a company ill-prepared to take advantage of it.

Don’t overdo it. Foster innovation without breaking the bank. Some of the best ideas are small steps, not big ones. A good rule of thumb: if your innovation budget is more than 20% of sales, then you’re not a company, you’re an R&D shop.

Have fun. Ever watch Shark Tank? Open up opportunities for employees to present their ideas to higher-ups. It reveals good ideas and trains organisations on what to look for when developing new concepts. I’ve even seen companies widen programs to include startups and new businesses from local or regional incubators.

Above all, the best innovators keep things simple. They adopt processes organic to their companies and well suited to their culture. They make sure innovation stays top of mind, while holding to what they do best.

While there are examples where these rules didn’t apply, setting your company up for innovation works more often than not. There is no silver bullet for innovation, but you can always improve your chances of success.