Innovation Environment

“Innovating: make changes in something established by introducing new methods, ideas or products.”

Considering this definition may be considered that some of the most important innovations in history are the Internet, Mobile Phones, Magnetic Resonance Imaging, Genetically Modified Plants, or Photovoltaic Solar Energy. However, innovation is not only about high-technology developments in the last century. More than 12.000 years ago the agricultural revolution supposed a huge innovation for those Homo Sapiens who started domesticating plants and animals. Democracy was an innovation for people living in Athens around 2.000 years ago, wasn’t it? 

A certain innovation can change the world’s history, it can also change the way people in a country act and live, it can improve the processes within a company, but it can change as well the plans you do with your family and friends. Definitely, the internet has changed the world, history and the way we think, act and live, and that’s a huge innovation. Nevertheless, when you come to your partner, family or friends, asking for a new plan, a new trip or even a new way of doing housework, you are changing something, that sometimes we don’t realise it’s established, by introducing a new method, idea or product. Therefore, exactly, you are also a potential innovator.

After showing how easy can be implementing innovations in real life, now the focus is on business innovation. Most of us know what innovation is, and probably also know how difficult is to come up with these new innovations. Then, how can innovation be encouraged and enabled in nowadays companies?

If I would explain here the answer to this question, probably just tomorrow I would receive some calls and emails from some of “the best”, or better said, “most profitable” companies asking me about my future. It’s well known the complexity of this question, therefore, I’m just going to show some practices that may encourage workers coming up with new ideas, products or services that may improve from internal processes within the company to the final product or service delivered to the customer. 

The most important concept to be implemented is not a process, neither a tool, but the correct environment that enables and makes innovation easier in companies. This environment should be based on trust, leadership, good relationships among employees, communication in both top-down and bottom-up directions, and so on. In general, is about having happy or relaxed employees with good working conditions. What’s the point of a company spending thousands or millions of euros in the state of the art innovation software for the employees, while those employees are scared of their bosses (polite way to say they hate their bosses), they are spending time at the company waiting to come back home, or even they feel no one value their opinions? Certainly, makes no sense, however, perhaps this company would come up with the conclusion that the software was not as good as it seemed, and is not their fault. This is a vicious circle which requires a cultural change in the company in order to cut it. Then, the most important factor when a company wants to carry out innovations is to enable the employees to do so by a nice working environment. Some studies depict that even the office furniture design has an important impact on innovation enabling, creating alternatives meeting areas with different desks, chairs, couches, interactive screens and all this stuff. 

After creating this kind of environments, the next step could be to settle down different type of initiatives such as internal or external competitions, new ideas talks within the company and training sessions. However, many times, all the initiatives mentioned above end up with some good ideas suggested by the employees and carried out completely by the company gathering all the benefits achieved, without considering those employees, or even nothing happens after those ideas are suggested. In my opinion, this is not a good environment where employees are encouraged to come up with new ideas since the role of the employee is just to define the idea and then, no one cares about them. Therefore, I strongly believe that if employees are considered as a key piece in the development of the idea (if they are willing to do so), they would be more willing to learn more, be more curious, attend talks, gather information, and finally, come up with more and useful ideas that are so beneficial for the company itself. Thus, some ideas to do so might be for example make the employee the developer of the idea, carrying out the direction of that development, or if not the direction, an important role that enables the worker to have decision power regarding the idea suggested. It’s known that the company needs to have certain control over the development of new ideas since the company wants that ideas to be aligned with the company strategy and goals, and then, the company needs to set some instructions that may be standardised in order to make it more agile. The final goal of this kind of implementations is to make the employee fulfil an important role to encourage new ideas generation. Despite the fact that money is not everything, and is not the only way to give benefits to employees, sometimes it might help. For instance, the creator of the idea could receive a salary increase, either a certain percentage of the profit or benefits earned thanks to the new idea. 

Another fact regarding innovation nowadays is that most companies leave all their innovation efforts and tools to the Research & Development department, complicating innovation in the remaining 80-90% (if not more) of workers in the company. This fact makes innovation in companies to be really focused on some branches of the business, instead of having the ability to reach an overall perspective of the business. Even more than an overall perspective of the business, companies should look for in the whole market as well as different markets where they are not currently present. Thanks to this general view, companies may arise with disruptive innovations.

When thinking about innovation we usually think about a new product or service. However, it has been proven in the last 10 years that the most disruptive innovations have been business models innovation such as Airbnb, Uber, Netflix, Alibaba, Ikea, Tesla or Zara. To go deeper on this explanation and relating it with the previous overall view of markets let’s explain it with an example: 

In the cars manufacturing industry, innovation has been focused for many years in the development of new products such as better engines, more reliable brakes, lighter and more resistant materials and so on. Due to this narrow focusing, they missed the opportunity to view the idea of car-sharing, which was implemented by small companies with no so many resources as a big car manufacturing company may have. Product innovations bring continuous but very small innovations in the automotive sector, nonetheless, car-sharing supposed a great innovation in the whole sector, even this is a service innovation based on IT services within the automotive industry.

What happens next? Usually, big companies are late, but they still have huge capital and technology resources, so they can create their own car-sharing service or even buy the competitor (that it’s the most common option). 

Extrapolating this car industry case to the mobile phone industry might be realised that the same happens. Even though companies such as Apple, Samsung or Huawei have huge R&D departments, many of their innovations come from small startups either buying them or buying the right to use their products/services.

Then, is it correct to conclude that big companies don’t create innovations and small startups do? Absolutely not! Big companies create huge innovations as well as startups do, but when we see those big companies presenting those innovations, we shouldn’t conclude that only big companies can come up with such disruptive innovations because sometimes all they do is paying for that. Innovation may come from a big company, from a small startup and even from an individual thinking to solve a problem.