I believe that companies need innovation to survive and thrive in today’s hypercompetitive business conditions. Dr. Paul Trott (Professor of Innovation Management, Head of Strategy Enterprise and Innovation Subject Group) defined the crucial importance of the long-term marketing and innovation management in successful business organizations.
When I established Innovation Turkey; my first priority was to be a catalyst and facilitator of a competitive market through cultural, business and transformative changes in the industry through seminars to help drive innovation in the organizations in Turkey.
We are talking about a truly effective innovation management. It is the only survival strategy of our time. Therefore, organizations need great leaders. But many leaders fail in time. What can be done?
According to my experience and knowledge in the multi-industry; innovation is the crucial ingredient in all economic success, providing competitive growth for nations, creating more transient competitive advantages through more products and services for companies and more great careers for people.
Innovation Driving in General
- More R&D spend does not mean more successful innovations. There is a negative correlation between them.
- More ideas don’t generate more innovations.
- Prefer fewer, bigger and more predictable successful innovations.
- Don’t stay on the chair. Copying time of a product is being less each year. First movers create 36 percent better stock return.
- Some innovative companies are launching new products and services month after month, year after year to create continuous transient competitive advantages. Look at Apple, Samsung, Unilever etc. They are spending 8 percent of annual sales to innovation. Why?
- Effective innovation management should be a priority of an organization and an obligation for national economic development.
- President Barack Obama mentioned “innovation” and “innovative” 11 times in his speech in 2010. This shows the strategic importance of the innovation management in today’s hypercompetitive World. Why?
- Companies who had high innovation effectiveness had a 76 percent product success while others created only 54 percent.
- Highly innovative companies achieved better sales (48 percent) and profits (49 percent) from new products while their less innovative peers had 21 percent in sales and 21 percent in profits. Look at the difference!
- According to the Boston Consulting Group study in 2010, innovative firms achieved a great advantage of the 12.4 increase in their three-year total shareholder returns compared to their competitors. Is this small value?
- 46 percent of the R&D spending gets wasted on new products according to the statistics.
- P&G had a 15 percent success in creating profit and revenue targets through new ideas. After 10 years, this ratio is 45 percent due to their improvements in innovation management. This shows their reconfiguring and improving ability in innovation management!
- We have to ask some questions to us if we want to create successful innovations. These are; A) What is the best structure and organizational design? B) How we execute a culture of risk aversion to the calculated risk-taking when we combine top-down and bottom-up innovation? C) Which categories we have to innovate (e.g., business model, product, service, new markets). D) How can we detect the real consumer insights, what are the ways? E) What are the best practices for launching a product or service for competitive growth and revenue returns?
I have to define that creating and launching successful new products and/or services to the market is highly dependent on the quality of leader, talents, culture and the environment in which they work. I know that the most important driver of the innovation is the leader of the company. Her or his character, behaviors, experience, knowledge and culture are crucial in innovation success. In general, they destroy the innovation insights and activities due to their poor leadership capabilities. Normally, they have to foster creativity and innovation in their organization. But, how?
My Key Findings:
- Company leaders don’t know the innovation management and how they will engage and drive the systematic and continuous innovation. They are passive, no personal risk taking and they like the status quo and short-term business approach. They focus on the daily priorities.
- The leaders are far away from the inspire curiosity, challenge current perspectives in long-term marketing and innovation strategy, create freedom and candor effect on the organization and drive discipline with the excellence in operations and organizational agility.
- The leaders fail to foster the innovation due to the their poor character and weak organizational culture and commitment to innovation. They fail to create an organizational commitment to innovate due to the their poor personal experience, knowledge and skills that includes low EQ level.
- If the most senior leader has a strong innovation culture and skills, the number of the transient competitive advantages will be more due to the leader’s strong personal commitment to the creativity, inspiring capability, creating suitable conditions for innovation and ability to execute the innovation in the organization by taking more information from the external developments in the technology, service, products and customer insights through making competitive intelligence regularly.
- There is no significant differences in innovation-fostering behavior or capabilities across age or gender according to the studies. There are many assumptions about the innovation capability of the younger leaders and/or female leaders and they aren’t correct. Innovation-fostering behavior is related to the personal experience, knowledge, environment, culture and character of the leader. It is not related to the age or gender.
- Who killed innovation and competitive growth in an organization? I know that leader’s negative impact on employee innovation is the first attempt to destroy the innovation culture. The leaders should look at the mirror at any level within the organization from the top to the bottom. They are the main barrier to the innovation.
- The degree of innovation in IT/Telecommunication is the biggest. I have to say that business complexity and competition is accelerating, therefore, the other industries have to lead effective and advanced long-term marketing and innovation strategies in the local and global markets.
- Companies that are making regular local and global competitive intelligence have more benefits from successful innovations. Because, they detect the current and future developments in technology, services, business models and customer insights. So that they plan, develop and launch their innovation management strategy in a better way than their peers.
- Close the gap between employee and leader. Focus on innovation, support and reward commitment to innovate. Inspire curiosity, challenge current perspectives and ideas, create innovation culture and the freedom to innovate and drive the discipline in the organization.
- Create an innovative organization by building a top-down and a bottom-up strong innovation culture. Involve employees and customers in all of the innovation activities. Reward the success, learn from fails are crucial parameters in successful innovation management.
- Push your leaders into innovative actions.
- Create excellence in organizational alignment and agility to foster innovation in your organization.
- Work with the innovative leaders who have excellence in experience, knowledge and skills that include strong EQ and learning ability.
- Good communication, collaboration, employee engagement, building accountability and organizational commitment are the essential parameters to foster innovation in the company.
- Develop a work environment that employees are expected to grow, learn, develop and experiment new concepts.
- Whole organization should know the main innovation strategy in an open and transparent way.
- Senior management has to identify the innovation as a top crucial parameter to grow and compete in local and global business world.
- Train all of the people in the organization about effective innovation management, operational excellence, productivity, alignment and organizational agility.
- Establish a culture that fosters idea generation, openness, experimentation and customer intimacy that will turn good ideas into profitable business that brings competitive growth and profitability against peers.
- Select the right leaders and talents. Don’t work with poor leaders and talent. Remove disengaged people from the organization. If your hiring people are poor quality, they will hire poor people. Reward the success always! Be careful!
- Develop innovation leaders. Benchmark your innovation capability against peers.
- Make regular competitive intelligence and take suitable actions on time.
- Make sector analysis and if necessary make healthy disengagements on time. Don’t be late. Otherwise, your business will fail!
- Build a business process for innovation and regularly reconfigure it. Be close to customer interactions, interests, needs, observations, motivations and also new technology and services in the local and global markets.
- Innovation is a science and discipline of connecting innovation to the business success in a hypercompetitive business world.
- I believe that it’s time for a wake up call for many companies to prevent bureaucracy and leading creativity and innovation to achieve transient competitive advantages. They have to reevaluate their top management structure and capability!
- Apply systematic, continuous and long-term innovation management strategy and regularly reconfigure it.
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Yusuf Tokdemir is a business advisor, entrepreneur, innovation consultant, growth strategist, keynote speaker, founder of Chocolat Garden Chocolatier and Innovation Turkey.
He has a proven track record of success in multi-industry.
Innovation Turkey is an Innovation Management Consulting and People Development Company. It collaborates with the companies for people and leadership development, new product design, new service design, new business design and organizes seminars and workshops on innovation management and productivity to achieve competitive commercial outcomes.
Chocolat Garden is an artisan chocolatier that produces highest quality chocolates for chocolate lovers in Çayyolu, Ankara.