What is Innovation?
What is innovation? This might sound like a simple idea that doesn’t need further definition, yet when most people think of innovation, they think of it as a single entity. Without quoting Webster’s dictionary, here we unpack and digest the subject in bite-sized form.
Based on the past year of research at Multiplicity, we have been able to break down the practice of innovation beyond typical product innovation into three main categories:
- Product/service innovation: developing new products, services, and business models
- Cultural transformation: employees operating in more agile and entrepreneurial ways
- Brand enhancement: being seen as a company with innovative practices
In this post, we make the case for the following three theses:
- Building cultural transformation creates an optimal environment for product innovation
- Understanding the corporate brand objectives is the foundation for causing cultural transformation
- Brand objectives in relation to innovation, do not necessarily mean PR stunts and have a legitimate place in a corporate innovation plan
Product or Service Innovation
Product or service innovation comes to mind more often than not with reference to the word “innovation”. This particular area relates to innovation based on a product, service, or business model. Product or service innovation is the most common end goal of building innovation capabilities within a corporation. On this wavelength, we explore the core thesis that this part of innovation achieves the best results when the other two areas, cultural transformation, and brand enhancement are first optimized.
Cultural Transformation
This is what the majority of corporations truly strive for. Culture, is understood rules (written or otherwise) on how an organization gets work done. For example, how people make decisions, how teams and leaders prioritize initiatives, and how the organization motivates and incentivizes its people, etc. The dream state is a culture in which employees operate in a more agile and entrepreneurial way. For instance, they make decisions faster, take more calculated risks, and feel empowered to generate and test new innovative ideas.
Our next thesis states that cultural transformation elements should be in place, in order to effectively achieve sustainable product innovation. In other words, it makes sense that a corporation would need an innovative and entrepreneurial culture to create innovative and entrepreneurial products or business models.
Brand Enhancement
When a brand is discussed in the context of innovation objectives, negative connotations such as PR stunts tend to come to mind. PR Stunts are not legitimate brand or innovation practices, however, understanding corporate brand objectives in relation to corporate values are a legitimate part of a corporate innovation.
Years ago, wise advice was shared that a brand is not your logo, colour palette, the posters in your office, or what you put on your website. A brand is what your customers say about your business when you’re not in the room — that is your reputation.
To develop a desired brand or reputation, your organization needs to internally live and own the core values you want your customers to recognize. For example, if you want to be seen as customer-centric, yet make decisions that prioritize shareholder value over customer satisfaction, your culture is not in-line with your desired brand.
This brings us onto our final thesis — to reach the desired brand, first, a corporation needs to fully understand its core values, and those values need to be translated into its culture (that is how the organization gets work done). If these values are truly embodied by both management and employees, while projecting outwards to customers through their work, then these values and culture will inherently become the company’s brand and reputation.
Brand > Culture > Product Innovation Pyramid
To borrow the Vision (Why) — Strategy (How) — Product (What) pyramid from the Lean Startup methodology, this hierarchy can also be used to shape the Innovation pyramid with Brand (Why) — Culture (How) — Product (What).
On our next post, we break down step one of designing an innovation plan — setting your objectives under these prime categories: brand, cultural transformation, and product innovation.
