How to make innovation business as usual

Although Britain’s economy expanded 2.8% in 2014, productivity has fallen for the third successive year. In response, the CBI has called for businesses to become more innovative and raise their performance. Many companies already describe themselves as ‘innovative’, but how many implement a solid model to ensure it’s embedded in everyday business? We spoke to growth and innovation expert Dennis Pannozzo to find out how he helps companies build sustainable innovation capability.

What is innovation?

For some it’s a nebulous buzzword that sounds good on the About us page of the corporate website. For others it’s a term best left to the Apples of the world to describe their latest gadgets.

For Dennis, innovation is about delivering new value to your customers and your company, whatever type of business you are. “What I tell my clients, is to take an holistic view when it comes to innovation,” he says. “Yes, it’s about new products and services, but it should be about all aspects of your business model: processes, financial models, technology, customer propositions and your customer and brand experience.”

Dennis has many years’ experience of working with a range of organisations, including FTSE 100 and Fortune 500 companies, as well as high-growth SMEs. As an innovation expert, Dennis works with these organisations to advise on how to embed an innovation capability that delivers commercial results. It starts, he says, with an innovation strategy.

What I tell my clients, is to take an holistic view when it comes to innovation

What innovation means to you

“The strategy needs to define what innovation means to your organisation, the portfolio of activities you’re going to implement to hit your strategic objectives and what investment you need,” he explains. “How disruptive do you need to be to compete successfully? Prioritise what will get you the best returns.”

The CEO and Executive team should drive the innovation strategy and demonstrate clear sponsorship. To deliver the strategy, Dennis advises that a business needs three things in place: an operational framework, investment in people development and cultural change.

The framework lays out clear and simple processes for employee engagement, innovation development and governance, effective communication, and for managing internal and external networks. The latter, for example, might be links with a university, whose cutting-edge R&D can help you develop new products or services. Included in employee engagement are mechanisms for driving employee participation in innovation. These might include online ideas forums or Dragons’ Den-style pitches, but Dennis says it needs to be more than one-off events; the key to true innovation success is having it become part of a team’s day-to-day working practices.

Innovation daily

“Creating ownership and accountability is key,” he adds. “If you just say that innovation is part of everyone’s job, employees won’t understand what you expect. This is where people development comes in. Have innovation in people’s objectives, give them feedback, and develop innovation talent. Show them how innovation can help them do their jobs better as part of everyday business, support them and recognise their achievements.”

Embedding innovation in the business leads to a cultural change where people have a shared purpose and believe in the importance of innovation and the benefits that come with contributing to it.

Dennis adds: “Companies already have good innovation capabilities they can leverage, but they lack a cohesive innovation strategy and model that ties it all together. Embedding innovation capability takes time. Whirlpool home appliances is known as being an innovative company. They started on this journey over a decade ago. They’ve built up best practices and have been successful. But they see building innovation capability as a journey rather than a destination. You have to take the longterm view.

And while it’s trite to say the pace of change in business is faster than ever, what we have seen is that because of that pace, companies can very quickly be disrupted by new and existing competitors who are more successful at embracing innovation.”

Summary

• British companies need to innovate to increase productivity and maintain competitive advantage.
• You need to implement a clearly defined strategy and practical operational framework.
• Sustainable innovation capability is a long-term game – patience and consistency are a must.
• Employee engagement and development is vital.