For an organization to succeed, there needs to be support of the innovation process. This starts at the top of an organization, where key components of innovation can be formed and reinforced. Without an understanding of the four C’s of innovation, most initiatives will remain on the drawing board.
Over the past decade, I’ve been fortunate enough to be given a multitude of opportunities to challenge organizations to become more innovative companies. Not all have gone according to plan, but throughout the years my models have been refined with increased success.
Adding millions of dollars to the financials of any organization is enough to capture the attention of even the most conservative boards, particularly when it’s done through an approach that was seen as challenging for the organization. Building innovations sometimes comes about by stretching an organization’s horizons, testing the thresholds of risk, applying lateral thinking and doing an evaluation of organizational purpose.
All of this, however, comes as a part of a larger journey that aims to assist the organization in ensuring its prosperous future. How would this thought process work with the now infamous victims of disruptive innovation; Kodak and Borders? These companies had powerful assets, such as brand, distribution, and capital. But, they let a shift in the market dilute those strengths to the point where they became liabilities. At which point, they were fighting an uphill battle juts the to survive.
The beginning of the process starts with having a meeting with the top level of organizations who will be responsible for the culture and the overall direction on the innovation process. This team will look at innovation from a macro perspective.
While there is significant importance to working with the people in the trenches, nothing compares to the importance of working with larger instruments of scale that need to be agreed to by an executive management group or board. This is where the four C’s of Innovation originated.
Organizations love engaging outside perspectives, often spending millions on c0nsultants and advisors. The role of the advisor is to act as a extension to the thinking of the organization, and to help it see things through new lenses. But in order for that advice to stick, it must be coupled with a framework that instills core principles into the organizations thinking.
The four C’s is the collective wisdom of dozens of organizations, hundreds of consultants, and an ongoing desire to find a way to scale the thinking behind innovative institutions. These organizations can be in any industry vertical … financial or non-financial. These principals also apply to any size organization.
Let’s take a look at the four pillars of innovation – Context, Culture, Capability and Collaboration.
Context was the last of the pillars to evolve, but turned out to be the most important. It’s easy to find an enthusiastic individual to drive innovation in an organization. And that individual will likely see the rationale and be able to promote the remain C’s within the organization.
No innovation process starts off with all of the answers, and it’s near impossible to create new strategic options that ever scale beyond an experiment without context. That is because most experiments have challenges as soon as an organization tries to integrate them back into ‘business-as-usual.’ This is where the initiative faces the battle of fitting into incumbent standards, processes and procedures.
The Innovation Context aims to lay the foundations of success right from the start. It involves considerations for:
- Organization Structure
- Financial Structure
- Physical Space and Location
- Identity and Values
- Performance Targets and Incentives
More than likely, an organization’s existing structure, location and premises aren’t ideal for encouraging the next pillar of ‘culture’. Hence decisions on context need careful consideration at the highest level.
With the foundation of context in place, an organization needs to work on creating a culture that will empower an innovation process to thrive. This involves potentially creating a ‘safe place’ where the culture is most risk tolerant, thus developing a sense of courage. Key elements of innovative culture include:
- Maker / Hacker
- Starting with Why
- Learning through failure
- Problem discovery
Each of the above are deep topics in themselves which take a lot of time to discuss and agree upon. But one must accept that without embracing and enabling an innovation culture, it will result in an uphill battle when you finally start your innovative initiatives.
It’s also the quickest way to lose innovative talent. Once activated, innovative individuals will latch onto a problem they are passionate about solving. If they feel they can’t solve that problem within your organization because the culture in not in place, they are likely to go elsewhere. The most likely outcome when an innovative culture is not in place is that your best talent provides solutions for a competitor. Worse yet, they create their own ventures and disrupt the entire industry.
Once the pillar of innovative culture starts to flourish, ideas will start to get thrown on the table. This is where you need structured methods to identify and evaluate those that you want to invest in. Borrowing from the worlds of design thinking, lean startup and venture capital, an organization can build a set of tools that guide individuals and initiatives through a framework that empowers individuals to become ‘interpreneurs’ – catalysts of internal ventures that could become strategic options.
A key for an organization is having a way to manage the initiatives in the pipeline. Right from initial ideation, through large scale corporate implementation, initiatives can be measured using a simple innovation accounting model. Even when an idea is pre-revenue, it still can take on its own value, allowing it to be compared against others in the pipeline. Soon, logical trends and macro options become clear. This provides the leaders of strategy and boards food for thought on strategic direction.
The quickest way to get into trouble is to invest resources (time and or money) in areas of weakness or an adjacent industry. In the long term, an organization may consider developing new internal competencies, but while an idea is in its infancy, the default should be to collaborate with organizations with aligned interests (and potentially a better solution than could be developed internally. Certainly, finding a collaborative partner can speed up the overall process.
When done well, the collaboration should create an extension of the value chain the organization participates in. For this reason, it’s easy to find simple value chain adjacency partners that help create a superior joint offering. Types of collaboration include:
- Shared risk initiatives
- Adjacent capability value chains
- Best of breed offerings
- Think Tank – Open Innovation Partnerships
- Capital initiatives
Time and time again I see the same reasons organizations fall short of their original intention and/or goals in innovation. The only way to develop into an innovative company is to take a macro-strategy outlook along the lines of the four C’s. Thus, creating the foundations for success and the frameworks for building an abundant strategic options pipeline.