Innovation is found in any fresh idea, method, or solution. For companies, it’s important that innovation offers a solid financial return.
More than ever, an innovation mindset is critical to adapting to today’s global and rapidly changing business conditions. In this article, I will share some insights about the future of corporate innovation.
Cinq is committed to furthering a mindset of innovation in our processes and our people. For example, our Objectives and Key Results team runs strategic initiatives such as an innovation program for generating new business ideas, innovation-related presentations for new employees during onboarding, and benchmarking with areas of innovation of corporates and startups, among other projects.
“I see innovation in companies whose environment and culture are extremely favorable to design, cooperation, experimentation, learning, risks and where error is considered part of the challenge. Interesting mistakes can culminate in inspiring hits, and recognizing those mistakes can stimulate the courage to innovate. The result achieved by innovation, even in small victories, must be very celebrated and disseminated to refuel the cultural cycle.”
Carlos Alberto Jayme, Chief Growth Officer, Cinq
Go beyond knowledge to understand innovation
Effective innovation requires balancing fresh, creative ideas with business goals. Creativity is closely correlated to innovation, so I recommend the Nobel Prize–winning book “Thinking Fast and Slow” by Daniel Kahneman. It addresses two types of thinking:
- Divergent — Connected to the right side of the brain, divergent thinking drives originality. It is the type of creative/germinating thinking that is linked to brainstorming and the search for new contexts and meanings.
- Convergent — This type of thinking is linked to the left side of the brain and drives relevance. It is analytical thinking that seeks the most effective and appropriate solution to a problem.
But the concept of innovation I like the most is summarized by Geoff Nicholson, a master of innovation who said “innovation is the transformation of knowledge into money.” One of the leaders at 3M who most encouraged innovation, Nicholson is considered the “father of the Post-it Note.”
The best scenario happens when an idea meets the market needs and expectations, is viable from an economic and sustainable point of view, and offers financial return. That’s the innovation sweet spot.
Clear strategy helps ensure success
To be clear, every innovation needs to generate results. Innovation is neither invention nor discovery. Those aspects can and often do support innovation, but its focus is economic performance rather than the acquisition of knowledge.
With that in mind, the first application of an innovation should be the strategy. Aiming high is a good thing, and in the process of developing an innovative solution, it’s strategy that will deliver value on the entire investment.
“New natural forms of programming will accelerate the process of digital innovation. But a major impact will happen on business management as these new natural language technologies go beyond tools to establish collaborative relationships between people and machines. This will require innovation in processes and especially in people’s mindset.”
Renata Zilse Borges, Head of Design, Cinq
Every innovation is a solution to a problem. An IBM CEO Study outlined three of the biggest challenges for corporate CEOs:
- Hyper-competition: Industries evolve rapidly, in ways that can be hard to predict. Unusual competitors emerge quickly and competitive movements are increasingly intense and fast.
- Complexity: Events, threats, and opportunities are coming faster than ever. What’s more, they often converge and influence each other in ways that lead to circumstances that are complicated and new.
- Innovation: It’s a constant challenge to creating products, processes, and services that can transform industry, are new to customers, and deliver superior attributes and experiences.
Those business challenges have existed for many years. More recently, new and unprecedented factors have increased the need for innovation.
In 2020, considering the pandemic context and our new normal, PriceWaterhouseCoopers (PwC) surveyed CEOs to learn “how business can emerge stronger.” The key findings:
- CEOs plan to make their businesses even more digital and virtual. They will digitize core business operations and processes, and add more digital products and services.
- CEOs also plan to develop a more flexible and employee-oriented workforce by increasing remote employees’ participation and expanding health, safety, and wellness programs.
“I believe the future of corporate innovation is open. Working in Red Hat I came to understand the power of open culture, to avoid locking in customers. Being able to leverage the power of communities for innovation makes a big difference.”
Mary Provinciatto, Engagement Lead, Open Innovation Labs (EMEA) – Europe and Africa
At Cinq, we have discussed how customer loyalty is overrated. Therefore, we need to develop a cumulative competitive advantage based on:
- Habit designing
- Innovating within the brand
- Keeping the brand message simple and the buying decision easy
- How the average human makes about 35,000 decisions a day, so the most sustainable competitive advantage is helping consumers avoid having to make a choice
- The power of habits and how they define cultures, countries, and religions
That said, constantly innovating can be a way to increase customer loyalty. In terms of innovation, McKinsey & Company’s “three horizons of growth” theory explains the importance of focusing on:
- core business innovations, or maintenance of the main business
- adjacent innovations, which cultivate emerging businesses and foster expansion of the client relationship
- transformational innovations that create genuinely new businesses, generating the highest value for the client and envisioning the future of the business relationship
A brighter future will follow a challenging period
As difficult as growth has been in many industries in 2020, remember that such problems often lead to the greatest innovation. In that light, we see that 2020 is the year that leads to corporate reinvention.
“With the current ease of creating new solutions that more efficiently solve problems, companies that do not innovate will have their business taken over by new offerings. In this context, the process of continuous innovation—with rapid survey and validation of hypotheses—is fundamental, but should not compete with the day-to-day of the company. This approach must be incorporated throughout the company, so that each person is attentive and can assist in the process.”
Luis Lima, Head of Solutions and Pre-Sales, Cinq
In many companies, such reinvention is happening amid new restrictions like hiring freezes and tighter budgets. In others, budgets may be stable, but initiatives face heightened expectations related to timelines and priorities.
Thus, some reflections arise: Can innovation help employees stay safe? Should companies rethink what used to be a face-to-face sales process? Can innovation help identify high-value opportunities that were not feasible to pursue just a few months ago? How can new tools help the organization be more agile and collaborative?
In innovation expert Steve Blank’s book “Four Steps to the Epiphany,” he explains that corporations equipped for the challenges of the 21st century must think of innovation as a sliding scale between execution and search. For companies to survive in the 21st century, they need to continually create a new set of businesses, especially by inventing new business models.
Similarly, the COVID-19 crisis and subsequent recovery is creating fundamental changes in our economies and societies, and a “new normal” is emerging. The winners in this new normal will be able to pivot quickly by understanding their companies’ competitive advantage and capabilities — and how they best serve the new needs of the market.
“I believe that the future of innovation is adaptability. Innovation belongs to the whole company, driven by culture and people. The humility of (re)learning and continuously sharing will be increasingly necessary for prosperity.”
Nôga Simões, Innovation and International Marketing Manager, Cinq
Are you curious about innovation at Cinq? Email [email protected] today.
Author: Nôga Simões