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Business Innovation Isn’t Easy. Here’s How Leaders Can Help

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In recent years, digital transformation has been one of the hottest topics in leadership circles. Technology is central to this kind of complex, large-scale endeavor. But success requires more than tools, alone. Operating models and processes must also change. And for continued improvement, business innovation should be part of the mix, as well. Why?

Because technology is constantly moving forward, ongoing innovation can keep your organization ahead of the curve. However, this depends on your ability to anticipate, adjust, and adapt. And that’s where your employees can make all the difference. Your workforce carries a wealth of information, expertise, and creativity. Unlocking that potential is key.

By combining the right technology with effective leadership strategies, you can transform your organization from a static monolith to a dynamic talent magnet, where innovation is a way of life. For more insight, let’s look closer at the relationship between digital transformation, agile leadership, and business innovation…

4 Ways Digital Transformation Fosters Business Innovation

Organizations can benefit in many ways from adopting game-changing tools and processes. These are just a few outcomes to expect from digital transformation:

1. Improved Efficiency

The best next-level tools are designed with efficiency in mind. For example, systems that rely on AI-driven automation and customization make it possible to dramatically reduce workflow bottlenecks and other inefficiencies. By empowering individuals and teams to operate more productively, the entire organization can focus more fully on higher-level tasks and creative challenges.

2. Enhanced Collaboration

Workforce collaboration is essential for business innovation. But it’s not easy to achieve in today’s hybrid and remote work environments. This is where transformative solutions are making a tremendous impact.

By relying on systems that help people directly communicate, coordinate, and stay up-to-date with projects at their convenience, distributed teams can operate even more effectively than they would in person. This makes it possible to include people from around the globe, which means more diverse input for problem-solving, ideation, and other creative activities.

Digital transformation can even improve collaboration among people who work in person at a single location. A myriad of digital applications are available for team scheduling, meetings, and project management so everyone can stay better connected and more productive.

3. Scalability

The ability to scale resources is a serious challenge, especially for younger or smaller companies. When staff workloads are full and growth reaches a peak, how can you continue to scale effectively, while also making business innovation a priority?

Digital transformation helps break through these barriers. By streamlining workflows and activating new pathways that help people bring more creativity to their day-to-day tasks, they can allocate more time to strategic problem-solving and other business priorities.

4. Adaptive Learning

The famous physicist, William Pollard, once said, “Learning and innovation go hand in hand. The arrogance of success is to think what you did yesterday will be sufficient tomorrow.”

This rings true for any business that wants to unlock the full potential of its workforce. Unless employees are continuously learning, they won’t have the inspiration or skills to drive innovation. And that means your organization won’t move forward.

But as many organizations discovered during the pandemic, digital learning tools can help make learning more convenient, continuous, engaging, and effective. Now, AI-driven tools are elevating everything from personalized training content and upskilling experiences to online knowledge-sharing forums and performance support at the moment of need.

How Agile Leaders Build a Culture of Business Innovation

In industries where change is a constant, digital transformation is no longer just an option. It’s an imperative. That’s because these organizations face unique issues:

  • How can they adapt quickly?
  • What can they do to stay ahead of the curve when that curve is always changing?
  • How can they attract, engage, and retain high-quality talent over the long term?

The answer to all these questions is business innovation.

The innovation process helps companies continuously adapt, stay ahead of competitors, and engage employees. Yet, merely asking employees to do their jobs differently is not enough.

Instead, ongoing innovation requires a culture shift. And that starts with a serious, top-down commitment. This is where agile leadership methods can help. Agile methods encourage innovation in a way that traditional leadership moves can’t touch. 

What is Agile Leadership?

Agile leadership is a model that values flexibility, adaptability, and continuous improvement above all else. Agile practices stimulate organizational innovation and encourage a culture where people strive to achieve better results by working smarter and more efficiently.

Developing agile leadership and integrating it into your organization takes time and effort, but the benefits are well worth the investment. These are the cornerstones:

1. Ensure Dedicated Time

Integrating top-down agility into your organization requires sufficient time for people to apply these practices on a consistent basis. When you establish specific time blocks for leaders and employees to step outside their normal scope of work, they can shift their focus to identify broader issues, generate creative ideas, and explore various possibilities. This lets business innovation blossom where it otherwise wouldn’t have space to emerge.

Also, with dedicated time for training, employees can develop the skills and mindset they need to be more inventive and push boundaries in their current roles. It’s equally important for leaders to devote time to meeting with team members, checking in, and discussing their future. This encourages a more open, collaborative, innovative culture across the board.

2. Emphasize Flexibility

Agile leaders are characterized by their flexible behavior, which in turn, permeates the organization. That doesn’t mean structure is nonexistent. Rather, it’s about being willing to adapt and change your existing structure to better align with market conditions, workforce needs, and your organization’s objectives.

Flexibility is a massive factor in keeping employees happy and encouraging an optimal work-life balance. When people don’t feel overwhelmed by stress or anxiety, they are much more likely to be engaged, productive, and motivated to support business innovation.

3. Empower Employees 

Agile methodologies were developed specifically with employee empowerment in mind. While traditional leadership models focus heavily on the authority and regulatory power of leaders, agile focuses on team building and working alongside teams to create better solutions.

It’s about establishing common goals and supporting employees as they work on projects and initiatives that matter to them. As a result, empowered employees are more passionate about their work and more creative in framing operational solutions.

The Benefits of Business Innovation

Innovation can be a difficult concept for organizations to quantify and justify. Rather than generating immediate cost savings or revenue, innovation typically is an investment in the future. Regardless, that investment can lead to impressive, long-term impact — especially if your culture is stagnant or your competitive position is slipping.

At its best, innovation can transform your business from the inside out by engaging your employees, revitalizing your work processes, and giving rise to a sustainable competitive advantage. Even if today’s effort falls short, it can still prepare your organization for future success. How? Because you can:

1. Enrich the Employee Experience

When team members feel uninspired or they don’t feel challenged, they’re likely to leave. In fact, these are two of the most common reasons why people quit.

But this isn’t a problem in cultures that welcome new ideas and encourage people to find better ways of getting things done. Companies that encourage innovation at all levels see a noticeable improvement in work culture. That’s because employees become more invested in an organization’s mission, vision, and values when they’re actively contributing to its success. And as employee ideas take root, engagement grows stronger. It’s a virtuous cycle.

2. “Future-Proof” Your Organization

Even if your business is thriving today, it’s impossible to guarantee this will continue. Industries change, market preferences change, and business fortunes can suffer. That’s why business innovation is so important. It could be the key to sustainable success. Why?

When organizations embrace change, employees are more likely to identify and share internal and external issues as they arise. They’re also more willing to work toward solutions that address these challenges.

No business lasts forever. No idea lasts forever. However, committing to continuous business innovation is the key to staying at the forefront of your industry, even through disruption. It can help you keep a leg up on competitors and strengthen your current offerings, while simultaneously improving employee commitment, engagement, and retention.

A Final Note

Talent is called talent for a reason. Indeed, great ideas don’t always come from upper-level management. That’s why leaders should create an environment where team members play an active role in business innovation. It engages team members more deeply. It strengthens your culture. Plus, it brings frontline voices to the table, so you can generate better ideas and implement better solutions.

At first glance, the connection between digital transformation, agile leadership, and business innovation may not be obvious. But if you follow the logic, their interdependent relationship becomes clear. Ultimately, when technology, people, and processes come together for a common cause, the benefits are often much greater than the sum of the parts.

What Drives Innovation Management at Successful Companies?

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In today’s fluid, fiercely competitive business environment, many organizations continuously strive to stay ahead of the curve. They know success requires an ongoing commitment to creativity and innovation. But breathing life into an innovation management strategy can be a complex, time-consuming challenge. What helps market leaders sustain an edge? Let’s take a closer look…

Too Often, Innovation Goals Don’t Match Reality

Why is innovation so crucial? It enhances productivity and profitability. What’s more, it can translate into significant long-term cost efficiencies. For example, according to McKinsey, innovative companies generate 2.4 times more profit, on average, than their less innovative counterparts.

But despite these promising statistics, most companies face a significant gap between innovation aspirations and reality. In fact, more than 80% of business leaders say innovation is one of their top three priorities — yet only 10% are satisfied with their current level of innovation performance.

What can organizations do to close this gap? Effective solutions depend on the people behind the innovation management process.

Managers Are the Secret

Fostering a culture of innovation involves more than just lofty aspirations. It also requires managers who are equipped with the right skills and resources to empower others. As the fundamental link between senior leadership and staff, managers are naturally positioned to foster creativity and innovation.

6 Keys to Innovation Management Success

At leading-edge companies, employees are empowered to experiment with new processes, tools, and services. They may explore a new product line, enhance the customer experience, or develop a tool to improve operational efficiency.

Regardless of the challenge at hand, people must feel ready to respond and supported in their efforts. This is where managers play an integral role in shaping innovation culture. Here are six innovation management steps that make a measurable difference:

1. Set the Right Tone

Innovation thrives when teams feel confident and competent enough to experiment, challenge the status quo, and embrace new ideas, processes, and technologies. This requires functional expertise and awareness of the organization, as well as a spirit of discovery. It also requires a nurturing environment that fosters psychological safety and encourages the free flow of ideas.

But perhaps most importantly, innovation demands a certain appetite for risk — with the reassurance that people can fail fast, learn from experience, and build on that foundation. Managers can set the tone by emphasizing each of these success factors.

2. Ensure That Employees Have Time to Contribute

Time is another consideration. No one can engage in innovation if they’re juggling endless to-do lists and reacting to requests that constantly come their way. Managers can make innovation a priority by allocating sufficient time for team members to stay on top of relevant trends, challenge tradition, investigate core issues, generate ideas, and explore solutions with others.

This is the case at 3M, a company known for its game-changing products. 3M’s long-standing culture of innovation encourages all employees to spend 15% of their work week proactively cultivating and pursuing “innovative ideas that excite them.”

3. Develop Strong Skills

Managers must come to the table with solid innovation management capabilities. After all, motivating employees to reach outside of their comfort zone isn’t easy. It requires emotional intelligence, empathy, and exceptional communication skills. Effective coaching skills are useful when encouraging people to innovate throughout their careers. And entrepreneurial skills come into play when spotting promising opportunities and helping employees find the determination and resourcefulness they need to push the envelope.

Smart companies know the breadth and depth of skills their managers possess. But many employers lack this kind of comprehensive insight. If you need a clearer, more complete view of manager skills across your organization, an inventory can help. First, identify and prioritize skills that matter most to you. Next, audit managers and document their skill sets. Then analyze this data to look for patterns that can help you find strengths and weaknesses.

Skills-Based Development in Practice

Although skills mapping is an important part of the planning process, innovation really comes to life when managers and their employees put these skills into practice. This is why organizations like Unilever and IBM have adopted a skills-based approach to workforce development, planning, and decision making. These companies rely on skills to guide key all kinds of workforce decisions, including hiring and promotions. This frees them from focusing too heavily on limited roles and job-specific siloes. It also enables them to adapt and innovate more swiftly than industry counterparts.

At Unilever, this skills-based approach takes various forms, including a talent marketplace where both permanent employees and “U-Workers” can participate in projects and tasks across the organization, based on their skills. U-Work is a contract work program that provides participants with a guaranteed minimum monthly retainer and enables them to work in a flexible way they prefer.

Meanwhile at IBM, half of its U.S.-based roles no longer require a degree. The company is also investing in upskilling veterans and neurodiverse individuals to develop high-demand skills the company needs.

Results from early adopters of skills-based strategies are promising. For instance, among companies that rely on skills to match people with work opportunities, 26% are better able to anticipate future disruptions, 26% have a more agile workforce, and 26% are more innovative.

4. Let Data Lead the Way

Many organizations are already sitting on a wealth of employee skill data, so implementing skills-based approaches is faster and easier than ever. This data is also an invaluable source of information for managers who are building innovative teams.

Skills data is available from HR, learning, and recruitment systems, as well as work-related platforms like project management tools and document systems. By combining and analyzing data about the work and learning people complete every day, along with their resumes, skills assessments, performance reviews, and feedback from others, managers can get a comprehensive view of their team’s skills and potential.

This kind of skills intelligence makes it possible to identify candidates who could complement a cross-functional innovation team, or expose gaps that may hinder future innovation. In short, it helps managers lead innovation with better insight, conduct career conversations with greater precision, and understand how disruption is shaping their team’s talent requirements.

5. Ensure Everyone is Onboard

Developing a culture of innovation requires buy-in at every level. Celebrating successful solutions and their impact on the business can boost everyone’s enthusiasm for future innovation.

Recognition from managers is particularly powerful. However, it doesn’t need to include a tangible or financial reward. Simply being acknowledged by a senior leader makes a memorable difference, especially if you spotlight employee innovation efforts at team or company meetings. Also, to motivate particularly strong contributors, senior leaders could offer mentoring support. This, in turn, stretches employee innovation skills and experiences that can pay-off in the future.

Enabling team members to share ideas and suggestions can be a highly effective “grassroots” way to support innovation culture. It can be as simple as adding several minutes to your team’s standing meeting agenda.

Or you can schedule standalone brainstorming or knowledge-sharing sessions. In this case, you’ll want to establish a process to ensure that all ideas are heard and acknowledged. Using a “yes, AND” tactic tells employees that their input is welcome and leaders will seriously consider its potential to add business value.

6. Clarify Your Agenda With an Innovation Framework

Interesting ideas are everywhere. But smart organizations don’t blindly pursue all possibilities. Instead, they build a blueprint that helps teams generate ideas, evaluate their potential, and implement solutions that deliver the best benefits for your organization.

This blueprint is also called an innovation framework. By consistently following these guidelines, you can keep resources focused on results that matter, rather than creating distractions.

Evaluating a new idea against your team objectives and business goals ensures that it will have a desirable impact on the top and bottom line. Alternatively, innovating within a need or known constraint can provide solutions to challenges you face.

For instance, the Covid pandemic led to numerous innovations in remote work, education, telehealth, vaccine technology, virtual restaurant services, and more. Now, many manufacturers and retailers are evaluating their innovation pipelines for ideas to tackle the cost of living crisis affecting many regions of the world.

There’s a mistaken belief that innovation is a costly, large-scale endeavor. In fact, it thrives when nurtured from the ground up. Even the smallest pilot projects can yield substantial long-term business impact. So, when planning a pilot project, managers can review team skills to be sure they assign the right people, with the right skills, to the right challenge, at the right time.

Then, managers can move teams forward through this innovation process framework by identifying and addressing one business problem at a time, and building momentum as they tackle subsequent challenges.

Moving Forward With Innovation Management

Every innovation effort begins with a single step. And every small step towards building an innovative business has the potential to create a significant impact in the long-run.

This is why innovative organizations equip managers with all the skills and resources they need to help teams thrive in the face of change.

Want to achieve better business outcomes? Support your managers, so they can embrace a skills-based approach, empower people to experiment, and nurture a culture where innovation is celebrated in all its forms. This will position your organization for long-term success.