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4 Tips to Improve Your Company's Innovation Efforts

May 2, 2022 3 Min Read Governance & Leadership

At the heart of every successful business is something simple: an idea. Somewhere along the line, a founder identified a unique way to solve a customer problem and a successful business was born. But one idea can only carry a business so far and, as companies grow, innovation needs to be part of a company’s DNA to ensure continued growth and profitability.

Here are four tips to help you get the most value out of your innovation efforts.

Avoid brainstorming. Numerous studies have shown that individual ideation efforts generate more quantity and quality than group ideation because group ideation settings bring into play a number of psychological elements that can undermine effectiveness. For example, some participants may be less likely to speak up because of fear of judgment. Additionally, participants with more dominant personalities often monopolize the conversation, leaving other participants sitting on the sidelines.

Give it time. In his book Originals, Adam Grant found that some of the most original thinkers were procrastinators, noting that, “procrastination gives you time to consider divergent ideas, to think in nonlinear ways, to make unexpected leaps.” The key is to make sure procrastination is moderate, because procrastinating too long can result in fire drills that stifle creativity.

Fail fast. Not all ideas are going to work, so your objective should be to fail early. Create a minimum viable product to test your hypothesis and then refine as necessary based on the results of each experiment. This technique will reduce the cost of failure as well as increase the likelihood of success.

Sometimes the best innovation is simplification. Leaders sometimes incorrectly assume that innovation requires a major advancement in processes or technologies. However, the late Clay Christensen, a world-renowned expert on innovation, concluded that that was not the case. Based upon his analysis of a number of industries, he found that disruptive innovation often occurs when a new market entrant offers a simplified version of products or services to the lower end of an existing market.

The risk of this gradually increases because established companies tend to continuously improve their offerings to meet the needs of their most complex and profitable customers. Over time, those increasingly sophisticated offerings overshoot the needs of lower-margin customers, leaving the door open for a new market entrant to offer a simplified offering that meets the needs of those customers on a more cost-effective basis.

Once the new market entrant gains a foothold, it will start gaining in sophistication, ultimately attacking the core customer base of the incumbent. Unfortunately, by the time the incumbent recognizes this, it is often far too late to mitigate the damage.

Innovation is a high-risk endeavor; however, keeping these four tips in mind can help you improve not only the quantity, but the quality of innovations, providing you with a solid foundation for continued success.

Christopher F Meshginpoosh CPAChristopher F. Meshginpoosh is managing director of Kreischer Miller and a specialist for the Center for Private Company Excellence. Contact him at Email.   



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