Rethinking Innovation

Thoughts on innovation:

It’s Time to Rethink How You Innovate via K@W:
 Solutions for Leading Innovation

The fallout from the pandemic has created new opportunities that organic growth leaders are best able to capture. By investing more in their pool of innovation talent, giving these people the latitude to seize these opportunities, and encouraging prudent risks, these growth leaders will extend their lead further, write Wharton’s George S. Day and Gregory P. Shea in this opinion piece. Day, an emeritus professor of marketing, and Shea, an adjunct professor of management, base these recommendations on their research into what sets growth leaders apart from their slower-moving rivals.

The intense innovation activity ignited by the global pandemic shows that some elephants can dance when they must. Companies are moving faster and taking bigger risks than could have been imagined a few months ago. A further impetus to rethinking established and cumbersome innovation approaches is the acceleration of many trends that are already underway. The lock-down has brought forward a shift to on-line work practices and team-sharing platforms while creating new opportunities. For example, 3D printing is getting a boost by helping to replace faraway suppliers with nearby 3D printing contractors and make supply chains more resilient. To capitalize on this shift, HP accelerated their “3D as a service” business model innovation, where customers pay only for what they print. The digital transformation of industries did not pause for the crisis.

A looming question is how to avoid reverting to the cumbersome and cautious legacy practices and risk-averse decision-making that had hobbled innovation performance in many organizations. As uncertainty abates, there is a pressing need for guidance on which changes to innovation approaches to prioritize, and how to decide which opportunities to grasp.

Our research identifying the fundamental innovation drivers that distinguish organic growth leaders from the laggards gives tested guidance to harried leadership teams on where and how to place their emphasis. The three drivers will be familiar to innovation practitioners, but their effects magnify when given intense leadership attention. They serve as so-called simple rules – they avoid the confusion and dilution of effort from pulling too many organizational levers at a time, and they focus and prioritize the efforts of the leadership team to improve the work of innovation in the future. To identify the three highest-leverage drivers, we assessed the efforts of 18 highly touted innovation drivers on relative organic growth performance in a sample of 192 global companies. Three of these 18 were robust in setting organic growth leaders apart from laggards and average performers:... "