Innovation: The Key to Unlocking Latent Potential

Innovation can be defined as "finding, developing and productively implementing new ideas for improvement and growth". This applies to all organisations, not only businesses, and is not confined to new product development. It is relevant to all aspects of a business.

Few executives would dispute its importance, yet many acknowledge that they are not very good at it. Under relentless pressures from competitors and stakeholders, they must constantly seek new ways to strengthen their strategic positioning, improve their operational effectiveness and increase profitability. Ongoing innovation is not a "nice to have" - it is absolutely essential for continued survival and growth.

Achieving and maintaining superior performance requires balanced attention to all areas of management, which can be grouped under two headings: Strategic Development and Operational Management. This balance is not always achieved: most companies tend to focus largely on the latter and give inadequate attention to the former, in which innovation plays a key role. Only those companies that give adequate attention to Strategic Development and build their competence in innovation can expect to realise anywhere near their full potential.

How can an organisation assess its capacity for innovation?

It must understand the factors that drive or inhibit innovation and have a yardstick for measuring its current performance in each of these Innovation Drivers.

Research indicates that:

• Many of the most creative ideas arise from unpredictable sources and anyone in (or outside) an organisation can potentially be a contributor.
• The ability of an organisation to tap and exploit these ideas is determined by the conditions and climate in the organisation. Maintaining a culture that inspires innovation is a task that is at least as important for top management as is budgeting and operational management.

In this context, 10 Innovation Drivers have been identified.

You can make a tentative self-assessment of your company's capacity for innovation by completing the accompanying mini audit. Ascentys would be happy to assist you in conducting a more comprehensive audit.

What can an organisation do to develop and enhance its capacity for innovation?

Some well-known examples illustrate the critical role of inspired leadership and a clear and stretching vision for successful innovation.



There are also other ways to influence innovation capacity. The scope and extent of the required interventions will differ from one company to another, with the specific needs in each case being determined by:

• The vision and objectives to which the company aspires: the more ambitious these are, the greater the required capacity for innovation.
• A realistic and thorough assessment of the company's current capacity for innovation: the lower this is, the greater the gap that must be bridged.
• Any specific deficiencies and opportunities for improvement identified duringthe assessment process.

Possible interventions include (but are not limited to) the following:

• Public commitment, support and encouragement from the CEO and other senior executives.
• Setting stretching and measurable targets for innovation.
• Regular assessment of the organisation’s innovation capacity.
• Appointment of a "steering group" with a mandate to:
  • Drive the development and implementation of specific initiatives;
  • Spearhead the ongoing development of a supportive culture, organisation structure and innovation process.
• Allocation of funds and other resources to support innovation.
• Skills development in creative problem solving and innovation.
• Amendments (as necessary) to the organisation’s core processes to support and encourage, rather than constrain, innovation.

The amount of time and effort Jack Welch found necessary to achieve his transformation objectives for GE well illustrate the nature and extent of the interventions that may be required to create a sustainable culture of innovation.



Ascentys assists clients in evaluating and developing their innovation capacity.