by Roy Luebke
To begin the definition for an individual organization, start by understanding how the senior management team deals with ambiguity and risk. If an organization is extremely risk averse, it is unlikely to be very innovative. All companies deal with risk, there is risk in doing something, and there is risk in doing nothing. Risk is a part of being in business, and how the organization is prepared to manage risk is a leading factor in its ability to move into new competitive arenas.
The need to be innovative is derived from market pressures. The leadership team must feel a degree of angst about the future, or some paranoia about outside forces that makes them uncomfortable. Innovation is driven by the belief that a firm’s competitive advantage is fleeting and that it must always be reinventing itself in order to survive. Hubris is anathema to innovation.
An innovation culture requires advances in processes for discovery, experimentation, and developing portfolios of options. These new processes will, in fact help mitigate risk exposure as opportunities and solutions are better defined. Better definitions will reduce ambiguity and uncertainty.
Organizations require new process to research their customers and discover new patterns in customer attitudes, and market and technology evolutions. Firms need to create ways to recognize new, emerging patterns in key areas and develop new business concepts to meet these new realities. Business leaders need to allow their people to experiment more and develop prototypes that fail before going to market so that new innovations are more likely to succeed in the long term. Ultimately, new processes need to be developed to create deeper understanding about customers and deliver more of what customers want, even though customers are not likely to articulate these needs precisely.