Innovation: It’s In Your Company’s DNA

April 25, 2014

Innovation is becoming more open and collaborative, even anarchic. The rules and tools of business are being disrupted, which is often uncomfortable and risky for established players battling inertia. Yet risky endeavors may harbor even greater returns. How then should large companies manage today’s disruptive innovation? The answer starts in their DNA.

But first, what’s innovation? I happen to think that it’s among the most abused words in the English language. One might say that it’s about the sort of fresh thinking that creates value. I happen to like Horace Dediu’s definition of innovation as “something new and uniquely useful.” His point is that innovation is not the same as novelty, creation, or invention. Rather, innovation is all of these things and a success in the marketplace. That market value means greater reward for the innovator.

You don’t have to convince an organization to get rewarded. And large, established businesses can be surprisingly good at spotting innovation. The problem is that they are just not always as good at acting on it. Businesses can be their own worst enemy sometimes, allowing time to slip away and customer’s current needs to speak louder than their future needs.

Innovation must be firmly implanted in a company’s culture. It isn’t the responsibility of just one team. It’s up to everyone in the company to foster innovation that will succeed in the marketplace. Yet you often still need groups within the company that act as loci of innovation. Lockheed’s famous Skunk Works, a team focused on radical innovation, has massive support from headquarters and is simply one unit within a much bigger company. More to the point, its facility isn’t an innovation petting zoo. 

Others acquire outside firms to continue spreading an innovative culture. Google, not exactly an innovation lightweight, did this by buying Waze, a social traffic app, as a billion-dollar experiment at pushing the envelope. It chose the path of intentional disruption. With an innovative culture and a sustainable business model, creating and delivering new technology becomes much easier.

A company’s leadership in particular has a responsibility to model certain hallmarks of an innovative culture. That includes the usual suspects of asking tough questions and giving bold visions. But the most important behavior, I believe, is humility. That means recognizing that disruptive innovation is usually occurring outside the four walls of your building. Your company is not going to have a monopoly on the best ideas (especially if you happen to be a monopoly). As Stephen Hoover, the CEO of Xerox PARC said at The Economist’s recent Innovation Forum, “If it’s all about you, then it’s not about the world, and the world is where the value is.”

Industry is finding that innovation often arises from a strong union between engineers and designers. Design in particular isn’t just about the look and feel of a product—it’s part of the core of most successful businesses. Yet there’s often a conscious uncoupling between both camps. After all, they have different backgrounds and priorities. They’re often placed in separate locales too. This must stop, for innovation’s sake. Co-locate both groups, hire designers with engineering know-how (and vice versa), bring in people who can interpret both groups and place them in headquarters, and involve all parties early on in the development process of any product. These are just a few of the steps that established companies can take.

A company’s innovative DNA goes hand-in-hand with its ability to thrive in the marketplace over the long haul. This can be a challenge for larger, less nimble firms, but it need not be impossible. With responsible leadership and a rightly oriented organization, these companies can prove their innovative wherewithal and manage the disruption it will bring.