When companies think of innovation, many think of hiring this capability because the effort to cultivate inside the organization seems unfeasible.
In reality, innovation is a challenge at most organizations, especially in highly regulated industries, like credit unions, because innovation is both a capability and a culture. So the challenge is how to infuse them in talent and culture.
Study after study indicates that the companies able to innovate effectively are those that share the following specific characteristics:
High tolerance for risk
Agile project management
Empowered and trained employees
Absence of silos
Effective decision-making structure
Thomas Siebel, in his book titled, Digital Transformation: Survive and Thrive in an Era of Mass Extinction, shares a 2016 MIT Sloan study on digital transformation that found that companies wanting to start down the road to digital maturity needed the following cultural characteristics to develop an effective digital culture: appetite for risk, leadership structure, work style, agility, and decision-making style. These characteristics are by no means all a company needs to compete in a digital world successfully, but a company cannot compete without them. Without a culture that encourages innovation and risk-taking, even the best thought-out digital transformation strategy will fail.
One viable pathway to building innovation as a capability is to think about innovation as a business process, an approach that can be infused into the organization.
INSEAD Professor of Entrepreneurship Morten Hansen and London Business School professor Julian Birkinshaw has done just that. They propose that innovation is a process, a value chain. The Hansen-Birkinshaw innovation value chain consists of three phases: 1) idea generation, 2) idea conversion, and 3) idea diffusion. Six linking tasks are performed across each stage: internal idea generation, external idea generation, cross-unit collaboration, idea selection, idea development, and spread of the developed ideas. This process allows innovation to be created as a process and not as a single entity. The benefit of implementing a process is it builds an innovation capability. Bonus!
The innovation value chain offers organizations both a systematic and customizable approach to innovation:
Assess organization innovation performance.
Determine the gaps.
Create solutions to fill the gaps.
Unleash a stream of new products and services
Like to sample Big Data/Big Climb?
Written for credit unions by a credit union expert, Big Data/Big Climb has been hailed as a "must-have". The book cuts through techno-jargon and translates data transformation concepts into a playbook filled with real-world examples, assessment guides, and other tools needed to reduce member friction, analyze actual competition, and identify disruption to improve the lives of its members and gain competitive advantage.
What if I want something more interactive than the book?
For the same time that it takes to enjoy your lunch, you could be learning how to build a culture of innovation. Click here to learn how to access the archived session on this topic.
Where can I find a partner that will leverage data to uncover new sources of revenue, reduce member friction, and build a data consumption capability?
Yep, that is what we do, of course, and so much more. To learn more, please review our consulting services.