Spontaneity beats structure in innovation

A 2012 study concluded that organizations with formal innovation structures perform better than ones that manage their innovation on unplanned basis.

A recent study that surveyed C-level executives or below who worked on new product development projects in their organizations found that in reality, the opposite is true. In the survey, participants were asked to describe the structure of innovation within their company and their company’s typical new product success rate. On comparing this innovation structure to the structure of top performing companies and average performing companies, there was little difference.

Innovators of the top performing organizations worked the same way as the average performers. The revenue size had little or no effect in innovation success. Actually, the top performers were from companies with less annual revenues.

From this, we can conclude that size and structure has no effect in determining innovation outcomes. So the question now is, what does? For this, they compared the top performing companies with the ones at the bottom and found 4 key characteristics.

1.   Effective Collaboration

High success rate in new product successes were directly liked to effective cross functional collaboration. Cross functional collaboration has more to it than just marketing and market research. While trying to find out specific reasons behind this, it was seen that top-performing organizations are more likely to involve sales and trade. Their sales and trade teams where involved in the process right from the beginning stages, unlike their counterparts which involved the team at the end stages of the innovation process.

2.   Risk Tolerance

It was found that organizations with the highest rates of new product success were more likely to have environments the promoted and rewarded creative risk taking. This ensured that they’re highly effective at having a level of radical thinking that is essential for consistent innovation.

3.   Research Driven

It is seen that top performing organizations effectively understand consumer needs by conducting research and analyzing found data. Companies with highest rates of new product success rates were 35% more likely to provide their employees with key insights for proper understanding of consumer needs. However, what was even better was that those companies used their data and insights to assess their own product ideas against those of their competitor. They also compared strengths and weaknesses which helped them find different propositions for their products. Top performing organizations were found to be 28% more likely to assess their ideas against the competitors.

4.   Supportive Culture

Along with more resources, top performing companies gave their employees more “emotional” resources in terms of guidance, support and running room. It was found that these companies were unlikely to burden their innovators with internal politics. Contrary, these organizations ensured that all skills and talents of innovators are put to use. This resulted in soaring employee morale, which is highly coveted in any organization. In comparison to the lowest performing companies, innovators at top performers were 1.3 times more likely to be satisfied with the utilization of their talents. They were also 2.9 times more like to find their leadership more supportive and encouraging, and 3 times less likely to consider leaving the organization for better prospects.

This certainly doesn’t mean that the leaders should stop trying to instill formal processes and systems around innovation. What it means is that the systems are of little value unless they promote specific organizational behaviors and help in setting the right norms. A leader should focus on the behaviors that matter. A leader’s main priority should be to get his team to coordinate more extensively across the organization which gives them access to better insights and result in more innovative ideas. Risk taking should be encouraged and people should be given enough room to use their full talents.

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