Innovation or Stagnation?
I have come across many articles describing 2016 to be The year of Innovation, these articles refer to technical innovations, new product innovations and business innovations. However, I don't believe that 2016 is any different from the previous 5 years. Technology might have exponentially grown, business landscapes are changing faster, and the consumer is more in-tune with the changes and improvements that support their hectic lifestyles, but a large number of multinationals and SME organisations have started their "innovation journey" a number of years ago.
So, what is innovation and why has this topic become more prominent in 2016? Business innovation is seen as an organisation's process for introducing new ideas, workflows, methodologies, services or products. However, when companies started innovating a number of years ago, they concentrated on new product developments or new services to differentiate themselves from their competitors and forgot the other areas of innovation.
This trend towards innovative organisations, due to their innovative products and/ or services, has allowed them to be seen as innovators. However, besides product and/ or service innovations, it's crucial to introduce and adopt innovation across the end-to-end organisation to allow continuous innovation. Innovation should be lived and breathed across your entire organisation, from your back-office to your front-office to your consumer.
In the recent years, many organisations have started to address innovation in the back-office by introducing process harmonisation, organisational simplification, single ERP and other technologies (cloud-services, etc), allowing more focus on innovation. But, these initiatives have allowed organisations to cut costs, instead of creating innovation in the back-office environment.
This disbursed innovation approach with a single focus on the front-office and consumer-focussed innovation has created stagnation within certain organisational parts, unable to create overal innovative organisations. It's similar to driving a car 100 km/h with the handbrake on, in the end, you'll wear down the car. Unless you introduce cross-functional, end-to-end innovation across the organisation, incl. the back-office, there might be an intention to create and innovation company, but when parts of the organisation are unable/ incapable to follow the innovation trend, it will negatively affect the innovation effectiveness across the overall organisation and will result in stagnation of an organisation, as many parts are pulling into different directions.
The following main focus areas have been identified to address back-office innovation:
People: Move the HR performance reviews from annual/ quarterly to ad-hoc, continuous performance reviews. When an organisation is looking to drive innovation with its employees, it's important that their innovation progress is continuously reviewed and addressed,
Technology/ IT: Transition from static, transactional ERP systems (focus on historic data) towards Enterprise Planning Systems, which focus on forward looking, scenario analysis, what-ifs, etc. It's proven that the business landscape changes to rapidly to use historic information to forecast the future,
Process: Focus on value added processes. Adopt Agile solutions to ensure that business and technology processes are immediately and continuously adding value to exceed the evolving business and organisational goals
Enterprise Awareness: Ensure that your employees are fully in-tune with innovations in other departments, organisational units, etc. This will allow cross-skilled employees that provide cross-functional innovative Agile solutions that benefits the entire organisation
The only way to truly realise 2016 as the year of innovation, is to invest in innovation throughout the organisation. Only then your organisation will transition from stagnation towards innovation...