What Does Innovation Really Mean?
Michael DeVenney
February 14, 2022

There is always a light bulb.

Somewhere, front and center, or lurking in the background, is a light bulb. Because that is what innovation is, a light bulb turning on and everyone seeing the opportunity clearly.

When we hear the word innovation, our minds immediately conjure up images of labs, whiteboards, and robots. And energy is buzzing through the room, people are laughing, and there are bean bag chairs in bright colors. It is blue skies and ideas aplenty.

That is innovation.

Actually, a lot of ideas generally lead nowhere wonderful. More than 80% of what we call innovation initiatives fail. And the ones that make it are primarily incremental innovations. The breakthroughs are rare, but that is what we expect and what we measure ourselves against.

We need a different path. For many reasons.

To be clear, I use a definition of innovation to be the creation of something new of value that matters to the end-user, or customer. It makes a difference with a measurable impact. And it is usually about an unmet need of the person who will use it. It can be incremental or, dare we say it, disruptive.

Right now, though, in Atlantic Canada, we are lagging the investment in research and development to create innovation. Less than 25% of companies are actively putting monies into innovation.

In our work with leaders, we found innovation to be a murky area. Everyone agreed that productivity was a strength and revenue generation was most important, and concern was needed over culture, but innovation, no one was truly for it (or against it). However, leaders scored the innovation within their companies at 78%.

But employees saw a different story. Only 57% of workers felt their organizations were innovative. While 88% of people agreed innovation was a critical part of the success of businesses, nearly half of employees felt it was not happening.

The gap widens as well with context. Employees provided tough feedback for leaders on their innovation capabilities. About two-thirds of people felt leaders moved quickly enough, while only 63% saw innovation is based on the customer, and, here it is, only 61.5% of employers felt they were encouraged and rewarded for bringing innovative ideas forward. Most people do not feel a part of the innovation equation. They are just watching from afar.

Here is a huge opportunity being missed. Everyone has the potential to be creative and add to the innovation of the organization. In fact, innovation is almost never a light bulb moment by one person, it is bouncing ideas and building of thoughts between many people. Someone saying something sets another person to thinking down a path that grabs the imagination of another who brings it out.

Down deep, leaders realize innovation is not working the way it is being done today. In this area, we found the greatest disagreement of direction amongst leaders. People had the widest level of differing opinions around the value of exploration of long-term potential opportunities. And two of the lowest scores for positioning businesses for growth occurred in the area of innovation, the ineffective access to new technologies (yes, it is true, we are not a mature digital economy) and the shaping of an inclusively diverse culture (proven to raise the innovation potential).

We found most leaders looking for incremental improvement in current offerings by adding new capabilities to the products or services or trying to test new opportunities using current core strengths. Both look to the future although with the firm grounding of standing in the past. Few leaders were focused on developing new opportunities around new capabilities for dynamic and adaptive growth.

As a region, we are lagging behind with research and development, and no matter the public relations machine, we are not as innovative as the images show.

But we can be. We should be.

It starts with a simple shift. Leaders feel discomfort with innovation due to the unknown future orientation. So, they put constraints of budget and risk in place. These two variables actually have a negative influence on innovation potential. McKinsey and Company have shown that keeping a tight rein on risk and money limits the ability to reimagine solutions and test boundaries. So, that keeps us on the incremental path, and we meet the potential breakthrough route.

But if we started with the customer first and focused on the outcome as a constraint, better ideas would happen. That is because we would be focused on the end result, not just the blue sky above. The pandemic provided a perfect example of the value of outcome-based innovation. When people said we need ventilators that can do this, innovators focused on the function and how to create new value around what could be done for the user. It is about the use of innovation, not the process of getting ideas.

And then add a time constraint, and you have a nice formula. Now, we want the ventilator to do this, and we need it by quarter three. Just enough pressure makes idea formation sharper and if focused on the outcome, it makes us think of turning things upside down and around to find how to make a vaccine workable within one year of a pandemic starting.

We have an educated and creative workforce in Atlantic Canada, and a very talkative one. There is no lack of brilliant minds. Leaders just need to shape the working environment to open up the potential of innovation.

First, leaders need to invest in innovation, it is critical to our future. We need to dust off the past and look at our customer, our user, and see where they are now and what is ahead for them. What do they need, what will they need, and what do they not even know they need yet although trends say they will? With the customer in mind, focus on the outcome and put a constraint in place to focus people on developing new value that provides a need.

And then include people. Use technology to involve a broader perspective, engage the value of diversity of experience, and build an inclusive culture.

Add a little time pressure, and the mix is right. The core can be the foundation, but there needs to be a healthier investment in real innovation for our regional economy to step up as the creative culture that we can be. And build new value that we can export and build an advantage.

Innovation can be applied to all industries, and the advantages of accessing new technologies and gaining the benefit of inclusive diversity can be achieved by every company, no matter the size or age, or stage.

More than 40% of employees say their organizations are not innovative – they know it, and leaders know it. And everyone agrees it is important and essential for successful positioning for future growth. Now is the time for leaders to innovate how innovation happens in their company. People want to be a part of creating new value, they want to bring ideas that matter to the customer, they just need to be asked.

Innovation should be an invitation to be included in developing the future outcome for the customer.

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