Read time: 4 mins
Driving Innovation in Companies: Skills for Leaders
Competitors who have the ability to work faster and cheaper are a constant threat to established companies. According to Jaideep Prabhu, guest lecturer on the Leading Sustainability: High Impact Leadership online short course from the University of Cambridge Institute for Sustainability Leadership (CISL), leaders need to create a culture of innovation if they’re to remain successful.
Transcript
Most successful large companies struggle with innovating again and again. The irony is that their very success sows the seeds of their failure.
Having come up with an innovative product, these companies grow and become successful. They have existing products serving existing customers in an existing competitive landscape. But all the while, as they’re serving their current market, there are new markets growing, new opportunities coming up, and new competitors serving those new markets.
Now, the established company faces a dilemma. Do they now start to develop the new idea for the new market, or do they focus on their current idea for the current market. Or if they decide to do both, how do they balance these two?
They now struggle to adapt to a world in which it’s important to innovate faster, better, and cheaper in the way that start-ups do. So, the large, established companies with their old processes and structures struggle to keep up with these frugal start-ups that can do things faster, better, and cheaper because they’re having to deal with two different ways of innovating.
I’ve spent my career studying innovation and have been very interested in the question of why some companies are able to innovate, not just once or twice, but continuously, over a long period of time. And so, a related question is: how do those companies create a culture of innovation, create certain attitudes and practices that are embedded deep within the organisation that helps the organisation to organically innovate again, and again and again?
And a key part of the answer to that question turns out to be the question of leadership: how people are – not just at the top, but often at the top – are able to create and foster such a culture of innovation. Leadership is a key aspect of driving innovation in companies, and therefore is a key aspect of keeping these companies growing and prosperous over a long period of time.
First of all, leaders in organisations need to spend some amount of time thinking not only about business as it exists today, but also business in the future. The leaders of organisations need to think about what are future threats and opportunities. These could be technological or market or organisational.
And then based on that thinking about the future, they need to come up with a vision for where they want their organisation to go. So, that’s a key aspect: developing that vision of where to go. Then they need to be able to communicate that vision in an inspiring way to the entire organisation.
And third, they need to empower people at different levels within the organisation to be able to realise that vision. They need to empower people to find new ideas, to develop new solutions, and then eventually, commercialise them.