Key ideas
- With innovation, not only do organisations become more resistant in the face of changes of context –generating positive returns–, but also, more efficient solutions are achieved for people and citizens.
- Leaders must advocate the presence of diverse teams and foster cultures that encourage innovation.
- Designing concrete actions is key for implementing these solutions in a viable way.
It may well be that the term has many meanings and that its (mistaken) everyday use has ended up working against it, but –without a doubt– innovation is a key element that an increasing number of companies and organisations are incorporating into their business models. It has been demonstrated that, in order to grow and generate institutions that are sustainable over time, implementing new and better innovation rationales is necessary. “Innovation is the key to a competitive advantage in a highly turbulent environment. It’s an important driving force behind countries’ economic growth, and it has direct consequences on the capacity for competing at an individual, corporate, regional, and national level,” says a study entitled Innovation and Business Performance: A Literature Review, developed by Cambridge University academic Andy Neely. “Values created by innovations are often manifested in new ways of doing things or in new products, and processes that contribute to wealth.”
Let’s think of Tesla, for example, the company directed by Elon Musk with the mission of using its electric vehicles to accelerate the world’s transition towards sustainable energy. Beyond its technological advances, what’s interesting about Tesla is that it inserts innovation within a business model, anticipating new consumer demands at a crucial moment of the climate crisis. “It’s thinking differently, so as to detect what the environment needs. Implementing these ideas implies applying innovation, delivering new solutions to an already existing problem,” explains the PhD in Social and Organisational Behaviour, alternate director of the Núcleo Milenio Sobre La Evolución del Trabajo, and academic from Universidad Adolfo Ibáñez, Mariana Bargsted. Proposing services that resolve current challenges, assuming the risks that this entails, seems to be the way forward.
“Incorporating innovation from the business’ DNA allows one to take control of companies’ sustainability and future. Although doing this takes an effort, it is necessary, for it allows one to have an adaptive capacity given today’s world’s changes and current necessities,” states the commercial engineer from Universidad de Chile, specialist in cooperative governments, and cofounder of the Red de Mujeres en Alta Dirección (REDMAD), Erica Pavez.
And this is precisely what could be observed during the pandemic, when innovative solutions had to be presented to tackle global problems. It happened, for example, with the Ford motor company, which formed an alliance with GE Healthcare, 3M, and the UAW union to produce medical equipment, such as ventilators or artificial respirators, in order to lend support to the collapsed healthcare system. According to the article How To Encourage Innovation Throughout Your Organization by the Fast Company, during the first months of the health crisis there was a boom in terms of innovation, especially because organisations began pooling together their capabilities to generate value.
This was observed not only in the private sphere, but in the public world as well, with the challenge of administering vaccines to the entire global population. “We’ve got to start shifting the perception that innovations don’t take place in the public sphere, because it’s not true. At Unit, we’ve carried out several processes with public institutions, and we’ve realised that there are highly motivated employees who take full advantage of the experience and apply what they’ve learned to real problems (like, in this case, the health crisis). There are interesting impulses, opening up spaces for innovation that previously didn’t exist,” declares the sociologist and Unit’s learning experience designer, Beatriz Hasbún.
To implement this type of solutions to the public sphere, States of Change (a global collective of professionals dedicated to public innovation) published a framework of competencies that define key skills that public sector innovators must handle to resolve experimental problems successfully. These are:
- Accelerating learning: Exploring and experimenting to identify knowledge gaps, create new understanding and inform decision-making in new ways.
- Working together: Engaging with citizens and multiple stakeholders to ensure co-creation and collaborative ownership of new solutions.
- Leading change: Creating space for innovation and driving change processes to mobilise people, inspire action and ensure strategic outcomes.
And so, with innovation, not only do public organisations and entities become more resistant in the face of changes of context –generating positive returns in all aspects–, but also, more efficient solutions are achieved for people and citizens. “We’re at a level in which innovation is recognized as something important for resolving users’ diverse problems. No executive or authority will tell you otherwise. However, where mistakes are often made is in the process of translating that awareness to an operative strategy, to habilitating conditions that allow teams to work with these rationales. In other words, it fails at the moment of execution,” Hasbun declares.
So what things are needed to successfully put this into practice? First, having a good team is key. The truth is, collaboration plays a large part in the innovations that generate impact. In the article The Capabilities Your Organization Needs to Sustain Innovation, published by the Harvard Business Review, offers the example of Pixar, which, through collective contribution and organisation, has managed to stand out as one of the most innovative animation studios in the film industry. “Whether it’s the artists who develop the story, the engineers to render the images, or those in charge of handling the business side of things, everyone is aware that they can’t reach success on their own. Collaboration is a hallmark of Pixar’s approach. No single person can produce the final solution, but every contribution plays a role in the creation of a spectacular film,” the article explains.
And so, innovation is a process that diverges from the idea of the solitary genius and often appears in the interaction of ideas amongst diverse people, whether they are diverse in expertise, experiences, or points of view. “Flashes of a vision may play a role, but most of the time, they’re simply based on everyone’s collaborative efforts and contribute to it.” This is why leaders must understand that it is their responsibility to unite all of this potential in order to boost innovation at their businesses or institutions.
However, not everyone with senior management positions manages to bring fruitful results out of this capacity. One of the factors that contribute to this is the lack of variety in the teams’ composition. This, without a doubt, hampers the possibility of generating new and fresh ideas. “It’s one of the most pronounced characteristics. In Chile, companies tend to hire people from the same two or three universities and schools; with plenty of discrimination towards people who don’t come from these places. If you have a homogenous group of people, who transit through the same spaces and relate amongst themselves, there will be no inputs for thinking differently. In order to stimulate creativity, one must take advantage of diversity,” Bargsted analyses, adding that leaders must facilitate spaces for dialogue, through structures that allow for the implementation of the good ideas that come up at these instances.
In addition to the lack of heterogeneity in teams, there’s another element that hampers innovation today: the lack of organisational culture in these areas. And it’s that, for it to work out, innovation must be incorporated into the core of the business model. “The main problem that companies today have when innovating is that many approach these processes as something that is separate from the core of what they do. However, we’ve realised that there’s a growing number of executives who share the idea that innovation must be a part of the permanent routines. When people disagree with this vision, a gigantic wall is erected, because innovation is perceived as something additional or extra that takes from the budget or brings people out of their scope of work. In virtuous cases, there’s an understanding that every team must be inoculated with new skills, mentalities, or methods, so that they may generate new opportunities for innovation,” says Juan Felipe López, partner and Director of Transformation and Development at Unit.
According to Mariana Bargsted, the reason why it’s been difficult to implement these types of rationales in Chile is because, in general, businesses and entities are oriented towards results and do not give room to their own failure of thinking ‘out of the box’. “We’re used to more vertical and patronal spaces, and to feeling distrust towards the working relationship. And that’s not an atmosphere in which one might dare to think differently or offer alternatives,” she indicates. Erica Pavez coincides, signalling that there can be no innovation if there’s no trial and error. And so, one of the keys for innovation is to promote a change of mindset amongst the leadership, so as to install innovation in the institutional culture. “Innovation cannot be improvised. The base must be rooted in the leaders so that people may work on that, because it’s difficult for innovation to surge from small teams and upwards. It isn’t impossible, but it’s slower. So there has to be this change of mentality,” she indicates.
To put innovation processes into practice, and for them to succeed, Beatriz Hasbún explains that coming up with a good design for implementation is key: “And that’s not such a simple thing to do, because all of us can have new ideas, but very few of us put them to the test, into practice, to see if they are useful to people,” she says, and concludes: “That is when innovation rationales come into play: experimenting, generating prototypes, iterating ideas, and improving them by getting the users involved. That management muscle must be put into action, to see whether the idea can really be implemented after it has been incubated, whether it be in the private sector –with the rules of competition– or in the public sphere –in the framework of management pillars.”
Three key dimensions for developing innovation capabilities
- Motivation: This implies not being indifferent. There must be motivation for doing things better and tackling problems through new ideas.
- Skills: These are varied, and they range from mobilising people or organisations, to analysing problems from different perspectives or creating storytelling and prototypes.
- Opportunities: They’re all those elements that can influence the realisation of innovation impulses. This includes the signals that leaders send to their teams regarding the appreciation of experimental rationales.
