A lot of ink is spilled on the importance of innovation, and much is said about how to innovate, overcome barriers to innovation, transform the organizational culture for innovation etc. Industry leaders are constantly thinking of what is next in their industry and what can they bring next to the market to stay ahead, remain relevant, or just survive. In this flurry of activity they often forget to ask why they innovate.
The question “why do we innovate?” may come across almost obnoxious or irrelevant at first. As we take it for granted that innovation is the lifeblood of growth and the mantra is “innovate or die”, there should be no doubt for anyone why to Innovate.
Asking why we need to innovate will prompt a look at the state of things as they are today, in the outside world, within the organisation, and within our minds. Starting to ask why may change your perspective entirely e.g. why do we produce so many versions of a product? Why do we produce this product in 3 different countries? Why have we been collaborating with the same people over the past 10 years? Why despite all our investment in innovation do we still not have a bigger market share? Why …
Asking the why question goes deep, and is usually uncomfortable and overwhelming, because it opens up the need for change in more than just a few process steps. It requires understanding and accepting the notion that maybe some, or all of our processes, business models, or culture are up for a good shakeup as they have become obsolete.
Asking why we need to innovate is the very innovation that starts from within an organisation, it is not a reaction to the pressures of changing times, rather it is the trigger for change, or the engine for transformation. To understand in detail why a company needs to innovate will clarify exactly where, when, how, and what it needs to innovate. When that clarity arises procuring technologies, ideas, people etc. is not difficult as there are enough tools, organizations and experts out there that can help with that.
A forward looking company starts innovation by understanding where they are standing today in relation to the world they inhabit, where this world is going, and what they want to be in the future. This future oriented approach becomes increasingly essential due to the structural disruption of business processes and business models through the rapid rise of connectivity and the power of platform technologies, such as the Internet of Things (IoT) and Big Data.
An extensively discussed example is GE’s transformation through the 80’s and 90’s. However, GE has continued to transform itself further to a leader of the Industrial Internet and Industrial Big Data (http://invent.ge/14FLT9l & http://invent.ge/1oyjkTP). Another such advanced innovator is Shell, which started investing in understanding the opportunities that the IoT /Internet of Everything would provide. In an interview with Alan Matula, Shell’s CIO, he mentioned that when Shell realised the IoE was going to take off, three to four years ago, they set up a technology centre alongside their research and development (R&D) department that was designed to investigate how Shell could take advantage of the emerging concept (http://bit.ly/1HbdaSw).
The success of the above-mentioned companies is based on their ability to understand that innovation is not only about churning out new products and services, but rather on detecting emerging forces of change. Innovation with foresight enables them to harness these forces and transform them into opportunities.