Insight Articles

Four Signposts of the Innovation (R)Evolution

January 15, 2015Innovation

The path of innovation over the centuries has been complicated. Its meaning has evolved radically as has its impact on the world around us. But what does it mean today, and how should organisations harness the 21st century interpretation of this increasingly evocative term?
With a little help from the Canadian historian Benoît Godin*, I’ll briefly explore the history of Innovation, and draw on my own experience to reflect on the present and potential future of innovation.

Innovation Past
According to Godin, the word Innovation originated as early as the 13th century and became a derogatory term used to describe the promotion of doctrinal “newness”; a dangerous thing in the entrenched religious environment of medieval Europe. According to Godin “innovators” were regularly imprisoned for life or worse – many having their ears cut off to prevent them being exposed to, and poisoned by, further heretical ideas.

By the end of the 19th century, however, the definition of innovation had been radically reinvented. At the height of the industrial revolution the term was adopted by the engineering elite to describe the process of technological invention, much closer to today’s understanding of the term.

Godin pinpoints 1939 as the point at which the term takes another, more subtle, form. Austrian economist Joseph Schumpeter made the distinction between the terms invention and innovation, suggesting that innovation happens when companies harness inventions to ‘craft constructive change’ i.e. innovation becomes a process.

From the 1940s onwards, innovation became increasingly synonymous with Research and Development; the domain of big business with deep pockets (big Pharma, multinational oil companies and the like) often in partnership with academia – a definition reinforced by the way that many governments funded such initiatives.

Innovation Present
Now, in the second decade of the 21st century, innovation is on the radar of most major players in almost every industry. Industry surveys by McKinsey, PwC and others demonstrate how strategically vital innovation is to many business leaders.

It has become an academic discipline taught to MBA students in business school. It has spurned specialisms, such as Clayton Christensen’s Disruptive Innovation model, where digital convergence is driving a redefinition of long-established norms. Innovation has become an imperative.

But, in many ways, this is age of the entrepreneur. Channelled and energised by the global economic downturn, and powered by new technology, nimble start-ups have arguably wrestled ownership of radical innovation away from big business and their expensive R&D programmes. As consumers, our collective attention – and spending habits – is increasingly drawn to successful start-ups like DropBox, Uber and AirBnB, that have explosively disrupted established markets and are literally changing the world around us.

Innovation Future
However, there are signs that we are on the cusp of a new phase of the innovation evolution; one that establishes innovation as a fundamental corporate capability, driving rapid and sustainable ‘constructive change’ (to quote Schumpeter once more) in response to intensifying competition.

Signpost 1 – Being Big, while Behaving Small
Organisations like GE – one of the largest companies on the planet – are embracing a systematic approach to innovation as a means of driving business growth. In GE’s case, it has embraced innovation both as a means of enabling the creation of radical new products and services, but also to successfully streamline its back-office processes and cut out bureaucratic and unnecessary workflow. It has achieved this by successfully learning how to behave like a lean start-up.

Signpost 2Democratisation
Technology is enabling unprecedented access to effective innovation, breaking down traditional adoption barriers and lowering the cost of access. Highly effective collaboration across business functions, departments and geographies is now possible, fostering radical exchanges of information and ideas, and stimulating organisational models that promote different ways of enabling creative ideation and entrepreneurial behaviours. No longer is innovation the domain of centralised R&D functions. It has become scalable and democratised throughout the organisation.

Signpost 3Open Innovation
Open innovation is still a relatively new concept, but is rapidly increasing in sophistication. Organising and structuring talent clusters that span traditional organisational boundaries is revolutionising the way that companies ideate and incubate radical innovations. Iconic toy manufacturer LEGO and professional services organisation Deloitte rank among enlightened adopters, radically reshaping their relationships with consumers, suppliers and co-creators.

Signpost 4Ecosystems
Ecosystems of innovation partners are maturing – from open innovation platforms like 10EQS to innovation management system providers such as Imaginatik & TalkFreely and people-centric innovation specialists like TheThinkTeam – allowing organisations to rapidly build sustainable innovation capability.

If they are to avoid the threat of catastrophic disruption and thrive, medium and large companies must take heed of these signposts and adopt a systematic approach to innovation.

If your organisation hasn’t got started enabling systematic innovation all the time and everywhere, then now is the time to begin. If you have, then maybe it’s time to sense check that it is still performing.

Source: Summarised from B. Godin (2015), Innovation Contested – The Idea of Innovation Over the Centuries. London: Routledge, 2015.