Why the opportunity for innovation has never been greater

By Ekaterina Petrova, Managing Director of GenerationS Corporate Accelerator

For so many, 2020 has been a year of continuity and survival. The thought of breaking new ground may seem farfetched for those that aren’t one of the few sectors that have grown this year. Is innovation even achievable, when everyone is working flat out just to keep operational?

Perhaps it is better to reframe the question – in a disrupted world, is innovation the difference between success and failure? History shows that is the case. The ability to move fast, to develop and deploy new services, is fast becoming the differentiator between winners and losers. Perhaps before the pandemic losing meant falling behind the curve; now, it can spell the end of a business.

It is certainly changing the way we all do business. A McKinsey and Co study found that “more than 90 percent of executives said they expect the fallout from COVID-19 to fundamentally change the way they do business over the next five years, with almost as many asserting that the crisis will have a lasting impact on their customers’ needs.” Furthermore, 70 percent believe that the changes brought about by the virus will be a big opportunity for growth.

Of course, being able to see those opportunities, and seize them, are two different things. The same study noted that just a fifth of respondents felt confident in their ability to seize new growth opportunities.

How then do organisation develop that capability to seize opportunities, to innovate in such a way that drives success?

The two sources of innovation

Broadly speaking, there are two sources of innovation – internal and external. The latter can come from third parties, from partnerships and joint ventures. There is a long and storied history of businesses with complementary services aligning themselves with one and other to innovate – these days, it might be a major corporate partnering with a disruptive start-up to share resources, ideas and processes, with both sides benefiting from the other’s unique characteristics.

It might even stretch to a merger or acquisition, depending on the size of the companies involved.

Internal innovation comes from within the business and involves having the right systems and processes in place to support the creation of ideas. From training to dedicated innovation time, clearly defined structures to sandboxes or incubation labs for promising ideas, businesses can foster the stimulation and propagation of ideas to identify new ways to capitalise on opportunities.

Picking the best of both

So, what’s the best approach? Should companies look externally, or should they focus on what they can generate internally?

Again, this is a question that needs reconsidering – it is not about the best approach, but about what suits the company in question. Trying to build an internal culture of innovation from scratch is time consuming; if there is no history of innovation, then looking to third parties and ‘buying-in’ that innovation might be more appropriate. Equally, a track record of internal innovation would suggest that perhaps value would be achieved more quickly by focusing on what existing employees and teams can generate with the right guidance.

Then there’s a hybrid approach, where partnering with external parties can align with internal creativity, so that new perspectives are interwoven with established, proven processes and structures.

The importance of culture in innovation

What each of these paths require is that the right culture is in place in order to succeed. What does that look like? It’s a culture that is actively seeks out new ways of working, that knows how to foster, rather than reject, ideas, and that can incubate them so that some become tangible solutions. Just as importantly, it’s a culture that recognises the value in those innovations that don’t become products or services.

While that may seem obvious when going down the internal route, it is just as important when focusing on external or hybrid possibilities. That’s because a company’s culture needs to be open to new ideas for an external partnership or venture to work. It must be receptive to different ways of working – the whole point of the partnership is to add something new, to bring what was missing to the organisation. Even if the purpose is to facilitate the acquisition of new technology or services, so much of a company’s culture is bound into their offering’s DNA that to reject it is to risk failing to realise the full value of the potential benefits available.

Being ready to seize opportunities

Businesses that want to succeed need to be innovative. That will mean different things to different organisations, but at its heart it’s about being able to identify and foster ideas that could become impactful services or products. Now is not the time to stop innovating – to do so is to miss the opportunities on offer. In fact, now is the time to make sure the right culture is in place, so that whether innovation comes from within or outside the company, organisations are ready to take their chances.

ABOUT THE AUTHOR

Ekaterina Petrova is Managing Director of GenerationS Corporate Accelerator and has more than 10 years’ experience with innovation investment projects and innovation consulting services for corporations and government entities. Ekaterina is a finalist of the EY Business Women 2020 competition.

Source: Global Banking & Finance Review