Instilling A Genius For Innovation

July 2016 Innovative Retail Technologies

By Ken Silay, Partner, Innovator’s Equation

Leadership and ownership are the key components necessary to drive innovation in the retail organization.

We have seen the future of retail, and we are not ready for it. We have been discussing omni-channel or some form of it for the last few years, and most organizations are still struggling with execution. In a recent published article in the Washington Post, the jury is even still out on the success of the poster child for omni-channel, buy online-pick up in store or click and collect. The article identifies that “fully 60 percent of such orders (click and collect) placed on Cyber Monday ran into problems, one study found. The wrong items were received, or orders were cancelled because the product was no longer in stock. Sometimes there was no notification an order was ready.” One shopper was quoted as saying, “I will never do in-store pickup ever again, that’s how bad it was for me.”

While no one is saying we shouldn’t continue to perfect the omni-channel offerings, the prudent organization will keep one eye on today’s requirements and one eye scanning the future. Yes, omni-channel will continue to be important, but perhaps equally as important will be your organization’s ability to channel its corporate intelligence and develop a genius for innovation.

An ancient philosopher once said that “the lucky person passes for a genius.” I believe that luck is when preparation meets opportunity. You must prepare for the future, or you won’t be ready when the opportunity of a lifetime presents itself. Innovation doesn’t just happen; it’s a combination of blue-sky thinking and a structure to deliver. If an organization can ever expect to sustain innovation, it must develop a genius for innovation. One definition of genius identifies realizing the power of new combinations. It’s not necessarily the implementation of a single idea. In retail, it’s how you combine technologies and processes to change, not just meet, customer expectations. I’ll use some nonretail examples to illustrate the point.

Biomimicry is the imitation of the models, systems, and elements of nature for the purpose of solving complex human problems. Biomimicry has given rise to new technologies inspired by biological solutions at macro and nanoscales. Our most recognizable macro biomimicry advance was Velcro, and at the nanoscale level we have the genetic engineering of nanodevices to deliver drugs to specific targets in the body. Joel Barker, noted futurist, author, and lecturer, calls this “innovation at the verge.” The place where something and something completely different come together to trigger innovation. For example, Coca-Cola South Africa has partnered with bottler Coca-Cola Fortune and communications company BT Global Services to provide underserved South African communities with free Wi-Fi, which will be built into Coke vending machines.

But it is one thing to understand what innovation is and a completely different issue to build sustainable innovation. How does an organization know that it has the right stuff to develop and sustain a genius for innovation? To answer that question, it is important, just as it is in any problem-solving process, to know what is required of an organization, based upon proven results, and what is preventing them from achieving a sustained, recognized innovation methodology that’s built to last. Innovation is on many company to-do lists. Marketing departments have hijacked the term for their advertising. Many companies have innovation budgets and even hire Chief Innovation Officers, but few seem to succeed. Every dollar properly invested in innovation can reduce costs, save time and money, and fuel growth far in excess of the initial investment.

Let’s review the three phases of the methodology — Ideate, Evaluate, and Accelerate.

Ideate
The World Database of Innovation, developed and maintained by Innovators International, is a look at more than 2,000 companies to find which innovation practices are shared by highest-performing organizations. Those findings make up the “Innovation Equation,” which allows companies to build an evidence-based Innovation Management System that will be their competitive edge. The continuing research finds that out of more than 117 innovation practices, only 27 were shared by companies that repeatedly created improvement in top-line growth, market or profit share, and the creation of game-changing ideas. A healthy Innovation Management System will use some selection of these 27 practices. The key to sustainable innovation, assuming C-level support, is determining the variables in your innovator’s equation. Every equation will be different, just as every organization’s culture is different. Understanding the variables that make up that equation is key to developing and maintaining a productive innovation methodology.

If you have mastered the variables in your equation for innovation, then you should be an organization that generates a pipeline of ideas upon which to act. So, now what do you do? Which ideas generate growth, disrupt your market, and truly give you a competitive advantage?

Evaluate
We traditionally approach this by calculating an ROI. We build a list of potential benefits that the executives and the board will agree to, monetize them, and prepare the cost-benefit analysis. We have the ROI for this game-changing idea, but did we look for the RUI? Did we (R)eally (U)nderstand (I)t and the impact that it will have? We don’t usually apply a deep amount of analysis to identify potential unintended consequences, both positive and negative, of the decision we are making. We need to explore the far-reaching implications of moving forward. There may be extremely lucrative opportunities that are not even considered through traditional ROI analysis. Conversely, you may uncover a potentially catastrophic event that might impact the whole organization and have the opportunity to mitigate that situation before it occurs.

Accelerate
The final, but extremely important, phase of a successful innovation methodology is the ability to accelerate the development of the idea to a productive process, application, or product. Organizations struggle to provide enough time, money, and talent to meet the increasing amount of change occurring. We must be creative in our approach to delivering that change, including outsourcing part or all of the corporate innovation process as necessary. Corporate venturing and external sources of capital and talent should be investigated. We should establish coalitions of retailers, who do not compete directly, to execute a collaborative process that includes external development resources to move from idea through development and testing to completed project in a compressed time frame to accelerate the time to market.

By now, forward-thinking leaders realize that innovation is essential to long-term success and maybe even to short-term competitive survival. Innovation cannot be just used in a sexy new advertising slogan or mentioned in a quick overview in the quarterly earnings report. Innovation requires leadership that can shape a vision of the organization’s future with the team and lead the continued, consistent execution of a plan to achieve that future, instilling that genius for innovation.