Innovation drives everything. From science and technology to art, it is the essential element that pushes businesses into the future. But why does it seem like truly innovative companies are hard to find these days?
The problem is not experience and know-how. It's the lack of a bold, agile and flexible way of thinking.
The Slow Death of Innovation
The overarching issue is that major corporations--who were once thought of as innovation leaders--are not set up to consistently innovate. They have reached the top by solving problems for consumers, but are now focused on stability and consistent profit. After all, that's what pleases shareholders.
Taking risks on innovative endeavours is not the center piece of growth for large-scale firms. Instead, it's commonly a separate initiative that's not an integral part of day-to-day operations.
Ironically, this type of thinking can and will ultimately lead to declining revenue. When new innovators disrupt the industry, large companies aren't ready for a transformation. And they get left behind.
The key to staying in front is staying innovative. Here are four strategies for big companies to spark start-up like innovation:
1. Engage More External Talent
Silos limit productivity, slow the decision-making process, and cripple the development of transformative ideas. When information sharing isn't encouraged and collaboration with outside organizations or departments isn't possible, decadence is the result.
A proven way to come up with new ideas is to engage external talent. Your employees would agree with me. More than 60 percent of workers believe collaborative thinking is the best way to spark innovation.
Most large-scale businesses have the resources to form partnerships, work with consultants, and even start entrepreneur residency programs. Why not try something similar?
There are all sorts of ways to stimulate innovation. To spearhead a mindset change amongst employees, DBS collaborated with startups to tackle business and societal challenge. DBS Bank in Singapore hosts hackathons in an effort to make banking services more accessible, secure and efficient.
These events allow startups and other external talent to work with internal project teams. This friendly collaboration results in the emergence of a startup culture that would not have been possible within the organization alone.
2. Rethink Hierarchies
Brilliant ideas can come from anywhere. Big companies need to know innovation is not limited to a meeting room filled with C-levels.
The goal of managers and executives should be to build the right environment for innovation. As Li Ka-shing, a Hong Kong business leader, states:
"A leader inspires others to greatness. A boss dominates his subordinates and makes them feel small."
Instead of top-down command (and payroll) structures, companies should embrace an atmosphere where all workers have an equal say when it comes to developing big ideas. Teamwork and an all-hands-on deck approach should drive decisions and product development--not directions being handed down the ladder.
To do this, empower your employees. When workers' ideas are being heard, they are more likely to feel as if they can accomplish something great. And that's when something great can actually happen.
The methods for getting creative ideas from employees are endless. Mumbai-based Tata Consultancy Services does a good job of encouraging innovation at its office. The company utilizes a social innovation platform called IdeaMax to encourage the expression, sharing and development of creative ideas and solutions among its consultants.
3. Encourage 20% Time
A company can really unleash the potential of its rock star talent when it gives those employees space to think. As IDEO's Tim Brown noted, "serious play" gives brilliant and innovative ideas a place to grow. Not allowing employees the freedom to spend a portion of their time working on projects outside of normal tasks can stifle innovation--and may even lead to a brain drain.
A survey of the world's eight largest economies (America, Brazil, China, Germany, India, Mexico, United Kingdom, and Japan) highlights some interesting reasons why workers leave a company. 71% cite teamwork not being encouraged as a reason, and 65% cite the lack of flexibility in their work schedule as a reason.
To keep your best and brightest, you must give them freedom and encourage collaboration. This will make them happy--and lead to "aha" moments.
Google is famous for its 20%-time policy, which allows workers to use one-fifth of their working time on their own projects. Even though this policy has been ousted as not really existing anymore at Google, the idea of offering employees "serious playtime" is incredible. The company states that this free time led to the creation of Gmail and Google News. Clearly, allowing its employees to work on their own thing has benefited Google tremendously.
20% time at your company doesn't need to be organized or receive formal oversight. Simply give employees space to work on projects they think can benefit the company. When the impact of the project is demonstrated, start adding more resources to it.
4. Be Audacious
Many large companies ascend to the top by cornering a niche at the right time. The problem is that the value prop that led them there won't work forever. The niche and the demand will both change over time. If companies don't respond to those changes, they will be left in the dust.
To stay on top, deliberate and methodical research, development and testing is needed. This way, new products that satisfy evolving consumer needs are consistently made.
For such continuous innovation to be successful, audacity is crucial. Think big--or go home. When you get an idea, take it all the way and see if it works. Only then will you know if something can propel your company to a sustained rise.
When it comes to large firms, sometimes innovation involves shedding an image, too. General Motors was on the brink of bankruptcy before taking a chance and reinventing itself in the East. In China, General Motors transformed Buick--which was once an outdated grandpa car--into a vehicle designed for the young, performance-oriented driver. The company's success in Asia has helped it once again become one of the most profitable automakers worldwide.
The long-term success of a company hinges on the ability to continually innovate. For direction, look to big companies that thrive at innovation, like Amazon, Apple, and Facebook. These giants operate labs as incubators of innovation, enabling them to predict and shape the future of their markets. This is the only guarantee for long-term success.
What are you doing to innovate at your company and ensure sustainable growth?
Alvin Chia is the Innovation Program Lead of DBS Bank. Outside of work, Alvin lectures as an Adjunct Faculty and is completing his doctoral dissertation with Delft University of Technology.
Follow Alvin on LinkedIn.