Businesses Must Unlock Sustainable Innovation Now
06th Oct , 2022
At International Business Mentors, our business mentors and business coaches facilitate senior business leaders and owners to rethink their business’s core skills to imbed continuous innovation to better survive and thrive.
Better innovation delivers more successful business models that enable businesses to better adapt to challenging market conditions and evolving operating environments. It also helps direct investment into future growth possibilities, while engaging key staff further into the fabric of their business through the lens of the future potential of the business itself.
Now is a critical time to consider unleashing continuous innovation in your organisation.
Your main motivators for adopting continuous innovation should be:
- The great current need to adapt to incredibly challenging and changing commercial and social environments, such as COVID disruptions, supply chain bottlenecks and the fast rate of social and geopolitical changes
- The need to motivate and retain your key staff by actively engaging them to think creatively about your business and its growing future.
- There is a need to generate fresh ideas about new products or service, or approaches to customers, suppliers or improvements to systems or operations, which in turn should improve your business.
How to Practically Kick Off the Innovation Process in Your Organisation
If you do not already have an innovation process or any input from a business mentor, then a good starting point is to create an ideas hopper. An ideas hopper is a central database that stores ideas from all of your staff.
A communication strategy with your staff needs to be developed to excite your people about generating new ideas, to introduce the ideas hopper, and to explain how the process will work to assess ideas and investment.
Senior leaders will need to consider how the ideas in the ideas hopper will be filtered and which filtration criteria need to be developed and implemented by the business, so that the business gets value delivered from innovation, such as:
- The commerciality of the idea
- The risks involved
- Whether or not the ideas leveraged from existing (less risky) or yet to be found (more risky)
- Intellectual property
- IT and operational systems
- Supplier relationships.
Once the new business ideas have been filtered against the set criteria, those successful ideas meeting these criteria should be prioritised. The top priority items should be researched, and a draft business proposal prepared for senior management or board for consideration and subsequent approval to invest further time and resources into these priority ideas to improve the business.
A draft business proposal should assess the idea in terms of:
- Overview of the idea and proposal
- Fit with overall business strategy or new strategic directions required
- Potential returns, impact on profits, profitability, returns, net cashflow
- Overall risk
- Likelihood of success
- Timeframe to implement (short, medium and long term)
- Project timeframes to complete commercialisation of the idea
- Business case for the investment
Support for the draft business proposal needs to include:
- Size of potential market
- Potential pricing, direct costs, impact on fixed overheads, capacity to deliver
- Will it be sold to existing markets and customers or to new markets or customers?
- This is part of the assessment of the risk involved with putting a new product or service into its market or target customers compared to extensions to existing products or services
- Analysis of competitors
- This needs to assess the likely behaviour of competitors once the new product or service is in the market
- This needs to be reflected in potential sales, cost to market and financial margins and requirements as part of the financial forecasts
- Intellectual property implications
- Does this leverage off existing intellectual property owned by the business?
- How are you going to deal with intellectual property owned by employees?
- Overall project timetable to develop the idea
- Including go points and stop points which signal to senior management when to critically review the project and make decisions as to whether it should continue
- Forecast of profits and cash flow returns
- These forecasts must start during the development phase of any new ideas to capture the costs of developing ideas
- The cost of the project should reflect the project timetable
- The forecast should have a range of sensitivities to produce best case, worse case and most likely based forecast
- Funding requirements
- Funding will be required to develop and implement any new idea that has been through the filtration process
- This should be part of each draft proposal
Overall Requirements for Innovation from Senior Management
It is essential that senior management and board control the innovation process to ensure that only the specified amount of resources is used in the innovation process. This will include setting the resources to run the innovation process, which will need a budget. It will also include just how much of staff time can be spent on innovation. This is to restrict the resources spent on innovation, but also to make sure enough resources are dedicated to the innovation process
Senior management and the Board must also:
- Set the criteria for the filtration process of the ideas hopper
- Decide and communicate their appetite for risk in ideas
- Portfolio-manage the innovation investments
- For example: This portfolio will include short, medium and long term turnaround projects,
- Consideration for risk of projects and size of investment compared to potential returns
- Have limits set for investment in each area of the portfolio and the portfolio as a whole
Reporting and Review of Innovation Progress
There needs to be regular reports to the senior management and board on:
- The size, composition and rate of growth of the ideas hopper
- The draft proposals flow
- Effectiveness of the filtration process
- Existing new ideas projects in the pipeline, including:
- On time re timetable
- On budget
- Whether or not these have hit stop or go points
- Are resources used in line for the overall budget for the innovation process?
Staff and Other Communications Review Innovation Process
Senior management and board should ensure that appropriate and regular communication is used to encourage all staff to contribute to the ideas hopper and to give feedback on the development and implementation of new ideas into the business or its products and services.
- Legal aspects of Intellectual property – Senior management and board should ensure that all legal aspects of intellectual property have been and continue to be adequately controlled.
- Maintain confidentiality and control – All sensitive information in the ideas hopper and in the projects should be controlled to ensure that no commercially sensitive information gets into the wrong hands or the public domain.
Other Aspects for Senior Management and Board to Consider
- Obtain professional advice on intellectual property, taxation and the best possible business structure for innovation to be managed under
- Senior management should review the impact of the innovation process on the motivation and retention of key staff and report progress to the board
Innovation is a desirable approach for all businesses, and critically it has become an immediate focus in the last two years.
As part of embracing innovation, a business mentor or business coach can facilitate business leaders to consider innovation processes and issues. Business mentoring can help provide focus with a necessary clarity of thought on what it is you want to achieve.
The impact of better innovation will be to help you to re-define or tighten up strategy towards future growth, leveraging off the ideas from within your organisation and re-motivating your people to invest their ideas and talent into the business’s future directions while making them more loyal to the organisation.
At International Business Mentors, our business mentors and business coaches can assist senior business leaders, boards and business owners to get into continuous innovation to better survive and grow their businesses.
Contact us to get your own business mentor or business coach to help you into innovation.