How the innovation game has changed

Innovation isn’t working. At least, the old style of innovation isn’t. It can’t be – look at the number of established, iconic brands that have been disrupted over the past few years. These companies didn’t stop innovating – at least not in their eyes. We all know about the Kodak example, an organisation who had an entire digital division years before Facebook and the smartphone came along.

So, what went wrong? In short, they were innovating for the world as it used to be, not the world as it is today. Tried and tested processes that should have worked didn’t, because the processes themselves were jaded and not fit for innovation in an age of ceaseless disruption.

Firstly, it’s important to understand the context. Companies can fail much faster today: competition is fiercer and wider, technology is changing faster, starting a company is less expensive, and customer tastes are more fluid — all leaving legacy companies without the luxury of time in which to figure out how to more effectively compete against upstarts.

At the same time, the risks of rapid innovation done poorly have never been greater: social media and communities quickly amplify failings, making brand reputation essential for customer trust.

Yet innovation remains key to survival, and today’s powerhouses are those willing to adopt and wield the latest technology, to entrench it within their business, to innovate from the bottom up.

If we look back at the last 20 years, we can see several strategies that didn’t work because they didn’t take this approach, the most obvious of which is the ‘corporate innovation centre’. By its very nature, it separates innovation from the rest of the company. Innovation needs to be embedded within the entire culture to be successful.

So how has the innovation game changed? You can read about the six basic changes that I think legacy companies have failed to recognise, and which hamper their ability to innovate, in the full version of this article here.

Of course, some things haven’t changed. Failure may be trumpeted as an example of determination, but it is seldom rewarded. Risk-taking generally attracts penalties, especially in large corporates that are dominated by investors’ aversion to it. That, however, means stasis – the very opposite of innovation. 

So how can businesses, especially legacy ones, create the right conditions for innovation?

It comes back to people and corporate culture – and how innovation needs to be entrenched throughout it, from bottom all the way to the top.