Innovation is seen as a top priority for businesses, echoed by PwC’s survey of nearly 250 CEOs around the world, almost all of whom (97%) said innovation was their number one priority to stimulate growth.
Despite this, Europe is lagging behind the US, Japan and South Korea on private sector R&D spending, even though it has a large reservoir of talented workers and successful companies. At the end of 2014, Europe’s share of global patents fell to its lowest percentage ever, just 5.8%, far behind the US at 22%.
This downward trajectory has prompted the EU’s research commissioner, Carlos Moedas, to propose setting up a European Innovation Council (EIC), which would fund applied research and innovation, similar to what the European Research Council does for scientific research.
This would form part of the European Commission’s Europe 2020 strategy to stimulate Europe’s innovation economy and improve its global standing. It was also discussed at length at the first Era of Innovation conference, held in Brussels in June, proposing that the EIC could provide funding to businesses, enterprises and innovators keen to bring new products to market.
While both businesses and the EU recognise the need to re-engineer their innovation efforts, funding is only one part of the equation. Organisations now need to focus on how their business can innovate day in day out and actually turn those great ideas in to business impact.
Taking the first step towards an innovation culture
Because innovation is so intrinsically linked to and influenced by company culture (think Google and Virgin), it’s important to facilitate innovative thinking at a grassroots level. Here are a couple of ideas to help create an innovation-friendly environment:
Give your workforce permission to innovate. Many employees worry they’ll get in trouble for spending time thinking about things outside of their immediate job spec. Google says its staff can spend 20% of their time working on innovative projects outside of their core activities.
Of course, your number doesn’t need to be that high – but you do need to create the ability for staff who have the passion and ability to innovate for their company and pursue their own ideas. Consider how you communicate to employees – do you convey the flexibility and creativity to operate outside of company norms?
Look at the physical environment that people are working in. Consider the cubicle walls that divide your desks. How high are they? If you can’t see the people around you, consider removing them where practical or provide open spaces where collaboration can occur and be promoted.
The height of the walls is directly proportional to the amount of collaboration that takes place. Removing workplace walls will improve the flow of information and instil an atmosphere of openness and sharing, allowing colleagues to feed off each other’s energy and ideas.
Once you’ve succeeded in building a strong culture of innovation, you need good ideas. Depending on how many people you involve in your innovation programme, you could end up with thousands of ideas. It simply isn’t possible to evaluate them all and the ideas you choose may be influenced by biased decision making.
One way of coping with this is to deploy crowdsourcing software which allows your employees (and even partners and customers) to submit ideas on how to solve a certain business challenge or strategic need.
These challenges can be set by your key stakeholders, so you can tailor your idea generation to your business’ strategic objectives and evaluate multiple ideas simultaneously, asking employees to rate ideas facilitated by gamification techniques.
The true value of innovation lies in its repeatability, both regionally and at a company level, so that over time these projects can contribute to overall business performance. Using software in this way takes the hard work out of idea generation, as your staff and partners can log in and vote for their favourite ideas.
Clever algorithms then automatically surface and graduate the best ideas, meaning you only need to examine those that are strongest.
Putting ideas to work
Gathering ideas is one thing, but deciding how to progress them is another. This is something that can be done through internal resource (building innovation), or looking externally (buying innovation).
One method of buying innovation is to set up a lab or incubator to work with external partners, start-ups and academics, focusing 100% on new technologies to generate original products and revenue streams.
For example, a utilities company could avoid taking a risk of developing a new digital application, which they have never done before, with a low percentage of making it to market by letting a smaller more experienced app company develop it, and simply purchasing the product when it is complete.
We’re starting to see this type of open innovation in multiple sectors, including banks, such as Deutsche Bank, management consultancy Accenture, and the Unilever Foundry. Already in London there’s an increase in the numbers of these incubators, such as UBS who have opened a lab at Level 39.
One way to build innovation is to launch an intrapreneurship programme, through which you allow your staff to run projects internally, in the style of a start-up, but with the security and financial backing of a parent company. The advantage of this is that you have much greater control over the project, and will have overall ownership of the outcome.
If you want an entirely built solution, you could look at giving your staff the tools and funding they need to develop a new product or idea on their own. Adobe introduced KickStart, an innovation programme which gave all interested employees a red box that contained a pre-paid credit card and all the information they would need to develop an idea into a product, in a phased approach.
An innovation union
The EC needs to grow an innovation-friendly environment for businesses to thrive. At an enterprise level, businesses must create a culture of innovation throughout the entire organisation. This needs to be combined with empowering employees to think creatively, leap-frog corporate bureaucracy and act upon those ideas for business success.
Only when all of these components merge together will Europe be able to multiply its innovation efforts within the region and follow in the footsteps of other innovation super powers.
Sourced from Matt Chapman, Vice President and head of Innovation Services, Mindjet