Culture

Principles for success

By Heather Fraser

Innovation is a top priority for every enterprise that wants to not only thrive in today’s economic landscape, but also survive through constant change. Some think innovation is risky, but the reality is that not innovating is the bigger risk.

When looking at organizations that have sustained success, there are six common characteristics related to their business innovation practices, supporting systems and culture that underpin their success:

  1. They have a clear and ambitious vision and distinct enterprise strategy.
  2. They are aligned on this strategy, which is understood and translated into actions across the enterprise.
  3. They ascribe to some common principles and practices, which include:
  • Collaboration across disciplines to get the most robust solutions and traction;
  • Obsessive focus on what people need, particularly their central customer to focus efforts and add meaningful market value;
  • Continuous exploration of new possibilities to better meet people’s needs to grow and stay ahead of their competition;
  • Ongoing experiments to learn so they can advance new ideas in a measured way and mitigate risk;
  • Co-creation with customers to get feedback on how to make ideas most valuable;
  • Systems design to create the most powerful solutions and business strategy

 

  1. They have the processes, structures and management systems in place to support these practices and deliver new, ongoing value to the market.
  2. They make a commitment (invest time and money) in innovation and reward for it.
  3. They nurture a culture of innovation, learning and agility that engages the organization in a shared purpose and pursuit.

This is the inspiration behind Business Design, a discipline that focuses on deep human understanding, exploring new market solutions and designing an action-directs strategy. It incorporates the factors that have been inherent in the success of companies like Nike, Four Seasons, Netflix, Procter & Gamble, Fidelity and many others. For newer entries, like digital companies that are disrupting service, manufacturing and retail businesses, this is baked into their “start-up” mentality. For those that have enjoyed the benefits of scale and sustained market success, it’s often difficult to work outside the engrained ways of working and “legacy systems.” To thrive and survive, these companies have to constantly adapt and evolve, while remaining anchored in these key factors.

Business Design is a holistic approach to shaping enterprise strategy, generating new ways to bring value to the market and designing the enterprise to support and accelerate sustained value creation.

Principles in creating new and sustained value

Here are 10 principles that can mobilize an enterprise to create and capture new value:

Principle 1: Take stock of reality

This entails taking a broad view of trends, emerging players and the organization’s “future-readiness.” In the quest to build capacity for sustained innovation, leaders should take stock of both the emerging challenges they face in the market, as well as how ready and able the organization is to respond to the changing context.

Principle 2: Engage employees

There’s no better way to motivate smart people inside an enterprise than to engage them in the process of creating a future they can own. That means not outsourcing innovation and not designating innovation as the job of a chosen few. At some point in the pursuit of innovation, someone always asks: “Who came up with this idea? Who’s going to make it happen?” An engagement strategy will determine the extent of internal ownership that can be cultivated, the speed at which ideas work their way through internal systems and, ultimately, how ideas survive and make their way to market.

Principle 3: Approach value creation strategically, with a business case

Companies like Apple and Nike have embraced innovation across the enterprise over decades – as reflected in their strategy, business systems and culture at large. Designing a strategy for integrating new ideas entails mapping out how they fit within or inform the overarching enterprise strategy. That calls for knowing what it will take to scale big ideas – the capabilities that require investment, the measured experiments needed to build confidence and the support systems required to deliver ideas to the marketplace.

Principle 4: Establish an ideology rooted in common language

This might mean establishing a sense of shared purpose, breaking down silos and collaborating to harness internal insights and ingenuity, understanding customers more deeply and holistically and giving license to explore new possibilities. In defining beliefs, avoid lingo that distracts people from the fundamentals. Even the word “innovation,” while it sounds exciting, can detract from the factors that both motivate and make the collective pursuit more accessible.

Principle 5: Equip people to contribute

People are intrinsically motivated by purpose, and more likely to embrace “progress” over “change.” When this aspiration is clearly articulated, it is important to give people inside the organization the methods and means to contribute. The more inclusive the approach, the more people across the organization will be motivated to contribute to progress. That often requires cultivating new mindsets and skills.

Principle 6: Consider structures and processes as both assets and barriers

With new ideas comes a need to rethink the systems and structures that can best enable and accelerate the flow of new ideas to the market. That means designing how people work (organizational teaming and structures) and processes (systems to move ideas through to implementation) and measurement (e.g., KPIs).

Principle 7: Inspire leadership at all levels

While it is important for senior leaders to articulate the enterprise ambition, ideology and overarching strategy, the “front line” brings critical insights that can inform and act on new opportunities. That requires leadership at all levels. Listen to and empower emerging leaders; they have fresh insights into the future, energy and a desire to make a meaningful difference.

Principle 8: Try something new, with an aim to learn

Experiments help to mitigate risk and offer an opportunity to learn, while gathering evidence to build confidence in your build-out. There is a lot of discussion about embracing failure; but is failure really an option? The smartest companies put an emphasis on learning rather than failing through rapid cycles of measured experiments.

Principle 9: Create conditions for success

Navigating the path forward is equally a business and organizational pursuit. It is important to give an appropriate balance of effort in managing current business and creating future business, while selectively “unlearning” the practices of the past. That calls for bringing all of the aforementioned principles together in a plan that harnesses the talents in an organization while “redirecting” and supporting efforts in a productive and motivating manner.

Principle 10: Give it time

Building a culture of innovation is an evolutionary process – a collective journey that calls for inspirational leadership, thoughtful planning, collective perseverance and tolerance when things don’t go exactly as planned. Celebrating new learning and early wins can build confidence and momentum.

Innovation is an enterprise-wide pursuit. Sustainable innovation requires strategic intent, new skills and support structures and systems to ultimately build enterprise agility. The principles and practices of Business Design can help guide that path. As every organization navigates its own innovation journey, trying new approaches is far more important than trying to be perfect out of the gate. At the same time, it is helpful to pause and reflect on how to create the conditions for enterprise success.


Heather Fraser is the co-founder of Rotman DesignWorks and adjunct professor at the Rotman School of Management, the founder of Vuka Innovation, and author of Design Works: How to Tackle Your Toughest Innovation Challenges through Business Design.