The pace of change in the world around us continues to accelerate, fueled in part by tremendous innovations afforded by advances in digital. Innovation is essential to drive organizations forward and create competitive differentiation. And yet all too often, when faced with difficulties and challenges, innovation is deemed “optional,” and the supporting budget is a target to be cut. The irony of this situation is that innovation is precisely what is needed to keep up with the pace of change and to deal with the challenges.
So, in a sea of competing priorities, how can one preserve sufficient support for innovation to flourish? The following are insights and lessons learned from my own personal experience, as well as through observing organizations that successfully embraced and created resilient innovation capabilities:
- Sponsorship – there needs to be a “voice” for innovation at the most senior level. Trying to do innovation from the ground up or as a “skunk works” only, tends not to work as an enduring strategy. Having an executive sponsor, who does not necessarily represent a formal reporting relationship, but rather is the respected senior executive that will speak up for innovation and essentially create “air cover” to allow the innovation to happen, is crucial.
- Budget – innovation does not have to be expensive. Starting with a modest budget helps to keep the innovation spend off the radar when it comes to looking at areas for cutting costs. Additionally, a modest budget acts as a natural portfolio limiter, forcing choices over where to focus limited spend.
- Relevance – keeping the innovation activity grounded in the business, even if it is business that said innovation will disrupt, is important. This is as much about the physical location as it is about the knowledge and understanding of business challenges and opportunities within the innovation team. Having an isolated innovation center can lead to it being labelled as “disconnected” – being visible and physically close to the business is important. Keep it relevant and invite individuals from the business to be part of projects and idea generation, or to provide feedback, where and when it makes sense.
- Portfolio – it’s important to have a balance of activity between the short and the long term to ensure that there is some identifiable innovation delivery in the near term thus building credibility around innovation. Having the bulk of the innovation activity focused on technology that is still somewhat futuristic or the longer term, tends to raise questions about delivery.
- Ecosystem – you don’t necessarily need a big team for innovation nor do all resources need to be your own. There is a huge opportunity to leverage innovation capability through partnering with academia, external R&D labs and startups. –Not only is this a cost-effective way to extend the resource base, but it also allows access to new sources of ideas and innovation, beyond the boundaries of the organization.
Whether the challenge is to solve climate change, provide affordable clean energy, address global food systems, avoid the next pandemic or simply increase the profitability of your business and create competitive advantage, innovation is required. Businesses that are able to embrace innovation in an enduring way will be successful. So, the question regarding innovation funding needs to shift from “Can we afford this?” to “Can we afford not to do this?”
Morag is a highly insightful and respected visionary executive leader with over 30 years of experience in technology and innovation senior leadership within large global corporations in the energy industry. Previously the first Chief Digital Innovation Officer for energy giant bp, she is a pioneer in innovation, known both for her thought leadership in digital and disruptive technology, as well as her track record of transformational delivery.