On-Demand Webinar: Innovating Your Way to Business Resilience
You cannot predict when or from what direction disruption will come, but you can use innovation to build a resilient business.
Given the turbulent global economy and widespread cutbacks, Prophet’s innovation team had some burning questions. What makes a business resilient–not just able to survive tough times but thrive?
We intuitively believed there was a connection between innovation and resilience. But we wanted to know if others thought that, too. So, we talked to 300 senior global business leaders across 30+ industries. We learned that innovation and resilience are connected, and organizations that are both innovative and resilient are 2X more likely to exceed their financial targets and 3X more likely to create more shareholder value than their competitors.
Download our latest research, Building Business Resilience Through Innovation, to learn how the most financially successful organizations innovate their way to business resilience.
As we continue to unpack our findings, we’ve got plenty of new questions, which is why we recently invited a few innovation experts to join us for an on-demand webinar. Professor Jan-Erik Baars, who teaches industrial design at the Lucerne School of Business in Switzerland, and Chris Reinke, vice president of design and product development at Masonite, an industrial manufacturer.
Below are a few key highlights from that discussion.
Innovation is “about solving the problems people care about,” says Reinke, who formerly directed design at Bose. “Innovation needs to be uniquely relevant, hard to copy and something your customers want to pay for.”
But in his experience, many companies rely too much on their history and current knowledge. They’re reluctant to look far enough into the future to understand what might happen next. As a result, these companies tend to be slow to pivot and capture the next growth opportunity.
“The viewpoint of the organization has a huge influence on its ability to be innovative and resilient,” says Baars. He spent nearly two decades in design at Philips. During his time there, he noticed that future casting was specifically assigned to the inventors of the organization, while business managers were limited to a much shorter horizon.
“If you don’t allow an organization to open for larger and longer horizons, you will not have enough time and stamina to understand customer needs and respond accordingly to develop something truly meaningful,” Baars says. “You can’t sketch something out on a napkin and expect to have it ready next quarter.”
Our research confirms that the most innovative companies are explicitly organized to innovate on multiple time horizons, simultaneously. They work hard to advance organizational capabilities. “They’re like successful musicians,” Baar says. “They’re dedicated, disciplined and committed. They stick to the plan, grow, learn and improve. “Layla Keramet, partner and EMEA head of Prophet’s Experience and Innovation practice, believes there are three tiers to innovation opportunity:
- We are not using the existing technology, product or solution in a way that can improve our human condition, and there is an opportunity to optimize and make it better.
- People are making a significant shift to a new type of product and service, therefore driving the demand for innovation.
- The technology, product or solution doesn’t have use cases for today, but we think it will in a plausible future.
Financially Thriving Companies Invest in a Diverse Range of Innovation Techniques
No matter which path companies are on, they can benefit from increasing the number of innovation tactics they use. Our research asked business leaders to identify which best-practice innovation techniques their organizations consistently rely on. Those that describe themselves as innovative and resilient use between five and six of these innovation techniques, on average. Companies that were neither innovative nor resilient used only 3.5.
That surprised us, especially since these tactics are widely known in the innovation community and general business world. Baars, on the other hand, wasn’t shocked at all.
“Most companies are dominated by management thinking,” he says. “They are very focused on output and time to market, even though that makes no difference to the consumer.” Yet that type of thinking tends to limit the variety and scope of innovation techniques.
Becoming more innovative requires “a change in the culture so that these techniques can be introduced, accepted and deployed.”
Innovation must be more than just a function. Building an innovation lab and detaching that group isn’t useful. “It’s like having a satellite with nothing to satellite around,” Baars says. “Innovation has to be a part of the core business.”
Companies that aren’t sure where to begin should start small and build from there, advises Reinke. Look at products that have proven successful and ask, “How can we make them better? What does the future look like?”
Masonite recently completed an activity with Prophet that looked to 2030. “We created a vision that enables us to walk back to the current day and understand where we are going with our product line,” says Reinke. “Now, we have a roadmap.”
The C-Suite Must Have Skin in the Game
Through our research, we discovered that only 11% of senior leaders set and are accountable for their organization’s innovation agenda. That didn’t surprise Baars, “Most companies are dominated by people with MBAs. They’re not trained in the company’s primary activity, which is creating impact for customers. Very few have degrees such as a Master of Business Design, which trains people to understand the inherent uncertainties of design thinking and set innovation agendas.”
“In many organizations, there is an over-representation of traditional business managers and an under-representation of designers and engineers,” Baars says. “So, they focus on driving operational excellence and efficiency, and not on creating an impact for customers.”
Our recent research and conversations with innovation leaders demonstrate that an organization’s innovative strengths correlate with its resilience, the kind of bounce-back flexibility all companies need to prosper in changing markets. As innovation leaders make their case for corporate support, they should enlist the involvement of the C-suite to spark new cultural thinking and organizational strategies.
Get in touch with our innovation experts.