How to Foster Innovation
It’s a common phrase thrown around in the business world. And for the most part it is true. The companies that innovate on the right things are the ones with sustained success. If some companies don’t innovate, small disruptive companies will eventually take their market share.
But this isn’t the case for all industries.
The auto industry, for example, has a very high barrier entry to enter the market. It requires a tremendous amount of capital to get it going and actually get production of a vehicle. You have to have knowledge about automotive engineering, hire out your team, R&D the vehicle, test it, get approval from government(s), invest in the factory, machines, and people that will build the vehicles, figure out good distribution, and sell them profitably. On top of all that, the vehicle needs to have some clear differentiating factor. It’s a tremendous amount of work and it’s why so few have done is successfully, although many have thrown their hats in the ring.
The case where innovate or die is most true is in technology. Microsoft CEO Satya Nadella has said, “our industry does not respect tradition – it only respects innovation.”
Tech companies have to be able to hold their own against the forces of creative destruction. Dozens of ambituous, well funded, young companies are started every year, all of whom aim to create some new innovation by inventing a new product or building a product that is at least 25% better than incumbent products. Reid Hoffman suggests that you need at least a 10x product or one that clearly stands out.
Companies need to stay ahead of the curve. Being agile is crucial ingredient. Too much inertia in a company or companies that fail to iterate on their products are ripening themselves for disruption.
Today’s infographic shows us what’s required for innovation. It needs to come from the top, with the leader of the company setting a culture where innovation and risk tasking is accepted. Employees should not be punished for failing and their ideas should not be ignored. In order to attract and retain the best people, their ideas need to be more than heard. They need to be implemented. Read on to learn more.