Corporate innovators often ask me what their first step should be to find success. While it seems like a loaded question, I always give simple advice: innovators need to baseline their reality and understand their businesses intimately before beginning an innovation journey. It seems fundamental, but many innovators look at the scope of the overwhelming challenges before them and fail to focus on the details in front of them.
Every organization handles the function and process of innovation in distinct fashion and by a variety of functions. While no single approach is perfect or correct for every business, there is one constant: understanding the reality of your company lays the foundation for successful innovation. By reality, I mean understanding the environment in which your company and department operate within, as well as your stakeholders’ perception of innovation. While you may be able to create innovative ideas in a vacuum, execution of those ideas must take place in reality. Your reality baseline is what helps bridge this gap.
Many corporate innovators easily become isolated, either deliberately or unknowingly, from the core of the company in the spirit of driving a different culture — or not having patience for the pace the company may operate. Very rapidly, you will find yourself increasingly frustrated as the divide between the function of innovation and the company grows.
Some corporate innovators bring unique creative or technical talent to a company and focus on their unique perspectives. These perspectives are powerful but ultimately may be wasted if they are isolated or not applied in context to what the company is facing. Here are some fundamentals you should be able to understand in order to enable your role as a corporate innovator:
- How do you make money? While the innovation function may operate under looser revenue metrics, innovators cannot afford to ignore the real metrics on the core business. Not only do you need to understand your financials but how your company likes to make money. Does your company mainly have transactional revenue or is it project-based? What sort of margins do you have?
- What is your company’s strategy, and what short-term and long-term metrics face your senior leadership? Financial performance metrics are one thing, but executives face a number of key objectives. If the enterprise compensation structure significantly rewards short-term wins over long-term investment, your innovation reality (and plan) looks much different. Innovators must connect their innovation priorities to clear plans for advancing the company’s strategic vision.
- What type of investors does your company have? While some investors may be comfortable with losing millions on moonshot projects, most may not be so kind. They may seem invisible from the innovation function, but shareholders will have a significant impact on how innovation is rewarded at every level of the organization.
- What is your corporate culture? Analytical or creative? Is it process-driven? Does it favor outside thinking or reward industry knowledge? Is it a sales-driven culture? Product-centric? At a strategic level, you may have a role in helping evolve the culture. At a more tactical level, the way your company culture “behaves” will have a significant impact on reception to your programs and make or break implementation of your projects.
There are no perfect answers to these questions, just the facts and perspectives that shape the reality of your corporate environment. Does that mean if you are in a business that is losing money, has a murky strategy with investors and incentives favoring short-term return and a culture stuck in the past, you cannot spur innovation? Absolutely not.
In fact, this may be a business so ripe for innovation you could make incredible impact in a short period of time. But without understanding the reality of your business, you may employ methods that won’t get traction and ruin your reputation before you begin.
You simply cannot enact successful change and innovation within your company unless you understand the reality of your business. Too many innovators assume there’s a one-size-fits-all approach to problem-solving, and they rapidly lose credibility through failure.
Get to know your company environment and fundamentals, and take the time to listen to the challenges facing the profit centers of the organization. Those insights will provide the fuel to craft a plan for change and innovation. More importantly, you’ll approach new initiatives with a clear understanding of how you will be measured and the scale and timeline you have to work with. While this is just the first step in deploying innovation, it is the step that will give you credibility and with that the most success.
This article was previously published on Enterprise Innovation, a leading publication for innovation profiles, news and insights.