How to be an architect of innovation and not decay

The term ‘innovate or die’ has become increasingly prevalent, urging organisations to reflect on and prioritise innovation.

With the growing rate of technological advancement and globalisation, organisations face immense pressure to continuously deliver new products, enter new markets and establish new revenue streams to keep up with the herd.

Yet with economic uncertainty predicted for the unforeseeable future, many organisations and their leaders hesitate to take the leap of faith into innovation strategies, rather choosing to remain within the safety of the status quo.

AIM WA CEO and social affairs and workplace expert Professor Gary Martin FAIM explores some of the challenges facing organisations and shares strategies for leaders to adopt.

How crucial do you believe innovation is in driving organisational success?

According to Professor Martin, innovation is critical to a business's sustainability and longevity.

“We've seen many examples of businesses that don't innovate at all,” he said.

“They either retract instead of growing or they disappear altogether if they don't analyse market trends and look at what customers want.”

Defunct or declining organisations such as Kodak, Nokia and Blockbuster become a cautionary tale for organisations of all sectors, as the companies' reluctance to innovate proactively resulted in them losing ground to more forward-thinking competitors.

Reflecting on Kodak’s demise, Professor Martin highlighted the dangers of complacency and a failure to not adapt to rising trends, as they relied on continuing to produce a product that they knew best.

“By not reading the market, not understanding their customer base and not looking at making a better product, they fell by the wayside,” he said.

As world-renowned leadership consultant and coach Marshall Goldsmith said, ‘What got you here, won’t get you there’. In other words, organisations must be willing to differentiate from their traditional business models and dependable strategies.

“If you want to stay around, you do have to innovate,” Professor Martin added.

“People sometimes think that innovation is just about the products and services but it's about the processes that you use as well.”

“…Processes and procedures can be just as innovative as products and services.”

How can organisations overcome innovation challenges amidst economic uncertainties and shifting market dynamics?

As important as innovation is, it can be challenging to get it right, as for an idea to be innovative it must also be useful.

While innovation is not a new term, it has become widely overused, leading it to become more of a buzzword.

Professor Martin believes this is a critical issue, as many individuals tend to confuse creativity with innovation.

“When individuals think of a creative solution, that's creativity. But innovation is actually putting that creative solution to work.” 

To be successful in innovation efforts, creative ideas must turn into actionable solutions, a step that some find challenging.

“While [leaders] are good at the creativity part of it, we're not so good at trying to action stuff and making that idea work,” Professor Martin said.

Many organisations often prioritise gradual innovation strategies they perceive as less risky. While a safer option, this can often lead to a counterproductive result of less experimentation and less creativity in ideas.

To diminish their fears of change, leaders will often refer to past market dynamics as predictors of future performance.

Professor Martin warned against relying solely on past successes, particularly in dynamic environments where change is constant.

“The biggest issue is that many organisations are risk averse because they don’t want to rock the boat,” he said.

“Yet by not rocking the boat, they are rocking the boat, because a business won't stay around for too long if they don't constantly think about what they’re doing and how they can actually do it better.”

For ideas that are formed within an organisation, Professor Martin highlighted how it is not uncommon for these to get watered down to align with industry standards. This can often lead to conformity bias.

To alleviate this issue, he suggests encouraging brainstorming activities with all levels of an organisation to foster open feedback and collaboration.

“Organisations need to have systems in place to make sure that when ideas get to the top for decision making, that they're not stripped of their intent,” he said.

“... Often when the economy's buoyant, innovation dies a little bit because people think ‘We don't need to change what we're doing, we're well patronised’. Yet what we're doing when we innovate is prepare for the future.”

Recent reports have shown that organisations are now ranking innovation as a top priority. What factors do you believe are driving this trend?

Despite economic uncertainty, innovation was reported by the Boston Consulting Group as a top corporate priority in 2023, with findings showing that 79 per cent of companies globally ranked it among their top three goals.

Professor Martin emphasised that innovation has become a growing trend, saying that ten years ago the term innovation was commonly referred to the phrase ‘if it ain’t broke, don’t fix it’.

 
AIM WA Chief Executive Officer, Professor Gary Martin FAIM

“Once COVID-19 happened, it highlighted the need for innovation as it became apparent that circumstances can change quite rapidly,” he said, adding how businesses stuck in the status quo were disrupted as routine operations were made obsolete.

“Leadership is not only leading in the good times … it’s also about learning how to lead so that there’s continuity in what we're doing and that there's some sustainability that we hold in our market share,” he said.

“A global pandemic is a really good reminder that one day, you can be doing well and the next day, you could be doing badly. So, what have you got up your sleeve is the question.”

What advice would you offer leaders looking to kickstart or sustain innovation within their organisations?

Innovation is not without risk, but the cost of inaction far outweighs the chance of any potential failure.

Professor Martin advocates for encouraging employees to experiment, ask questions and provide feedback, as part of the innovation journey is hearing diverse opinions.

“We're so used to a line management type of approach. But if you had a good idea, you'd have to report to your member of the executive team, who might decide that's not something the organisation will do, meaning that the rest of the management team might never find out about it,” he said.

“There’s got to be a more open culture about how ideas can flow through an organisation. That will make a big difference if you want to kickstart it.”

He further advised that while systemic planning around ideas needs to be in place, it shouldn’t discourage organisations from stepping out of their comfort zones, as failure itself is part of the growth process.

“You don’t just run with an idea; you’ve got to do some business planning around it. A big part of innovating is thinking what can you do with a good idea to bring it to life? What are the options available and then what will you use to bring it to life?” he said.

“If you can open it up to a lot more people in an organisation, the idea of coming up with new concepts for systems, processes, products and services is going to be a much more successful outcome.”

In the words of prolific inventor and businessman Thomas Edison, 'I have not failed. I’ve just found 10,000 ways that won’t work'. Embracing continuous learning and adaptation is essential for organisations to thrive and keep up with current times. As without any risks, we would all be stagnant.