As technology speeds the pace of change, simply understanding how disruptive innovation works isn’t enough.
The pace of change today can be blinding. Business model transformations that once took 10 to 20 years are now happening in as few as two to five. To stay competitive, leaders of innovative companies must be prepared to act before they are beaten to the punch by smaller, nimbler and, sometimes, invisible rivals. There’s a lot at stake: a company’s brand, growth, relevance and even survival.
Pursuing growth through innovation requires a delicate balancing act: Leaders must anticipate change and act with the future in mind while continuing to deliver real results every day. They should view marketplace disrupters not as roadblocks but as opportunities to find new ways to solve problems and create value. And they should have innovation strategies in place that allow a rapid response to disruptive threats and opportunities.
Both within our own walls and in our work with clients, we have seen that the most innovative companies embrace several imperatives.
First, the most effective innovation strategies are a cornerstone of the broader growth strategy for the enterprise. The strategy for innovation should be inspired by a vision of how an organization wants the world to see it: as a key component of customers’ experiences with the company’s product or service; as an expression of the passion everyone at the organization feels about thinking creatively and achieving new heights; and as a true reflection of a company’s brand.
Second, before innovation is pursued, there must be a common definition of what it means. This may seem obvious, but unless all members of an organization—regardless of job title—view innovation as part of their job, there will be no forward movement. At KPMG, the entire firm embraces an open and questioning mindset – one that seeks to uncover meaningful insights, so that we are continuously sharing new ideas with clients that contribute to the introduction of improved products, services and processes that accelerate growth.
Third, a company should have a set of guiding principles that defines “what must be true” for the organization to realize growth through innovation. At KPMG we call this “Innovation at Our Core” because it starts with our vision and strategy and forms the core of how our people think about themselves, their clients and the firm. We believe in the importance of a culture that encourages innovation and communicates that it is safe to experiment and, if unsuccessful, fail fast. This mindset must be pervasive so that innovation becomes systemic to the organization, ranging from detecting early signals of change in the marketplace to deploying groundbreaking solutions. Embedding innovation into the culture of an organization allows companies to innovate at market speed, so that forward-reaching solutions are brought to market before they are commoditized.
Fourth, accelerating speed to market becomes possible through the formation of diverse teams that reflect all corners of the organization. Such teams can pick up on meaningful weak signals in the market, engage in design thinking in innovative workspace sessions, and incorporate insights into issue resolution and business model transformation. Having these capabilities in place meets the need for rapid mobilization to drive competitive advantage.
Fifth, it is critical to forge a connected perspective between leaders responsible for managing the innovation process and the rest of the business. This creates a robust interrelationship that allows companies to bring to market ideas that are truly actionable and can be implemented and monetized.
As all of these imperatives are put into practice, it is critical to have support from the top, with senior leaders communicating the message that stepping up to pursue innovative new ideas that impact outcomes are not only encouraged but will be rewarded.
Senior leaders drive significant advantage when they view innovation as a critical component of enterprise strategy, align on what innovation means to their organizations, establish a set of guiding principles to spur the workforce to act as a unified whole, and capitalize on diverse thinking to conceive new ideas and bring them to life at market speed. In this way, innovation becomes not a stand-alone capability but an imperative that is embraced by individuals, by teams and by the organization as a whole.