Building Your Innovation Factory: Sustaining Business Growth

In our last article about innovation, we discussed how to create and implement a specific seven-step process to increase your company’s innovation. But there’s more. In 2024, in the VUCA world, you need to build an “innovation factory” for your company. The goal is to make innovation a built-in element of your brand so that it’s not a one-off endeavor but the way you operate. And that’s what we want to discuss here.

Let’s start with a short introduction. From the evolutionary perspective, survival often comes at the expense of the weakest. Homo sapiens mastered the art of replicable innovation (analogous to evolution), and it allowed humans to prevail over other species. Similarly, in the contemporary business landscape, cyclical innovation—defined as a company’s ability to consistently innovate and grow—is critical for success.

To some extent, it’s all about finding the right balance. On the one hand, disruptive innovation can be too much of a risk at once. Many companies don’t want to throw everything they have at just one project (that might succeed or not, for that matter). And that’s understandable. On the other hand, gradual evolution in terms of your company’s development is simply not enough.

So, where is the sweet spot? In constant, repeatable innovation that happens at your company’s capacity.

You don’t want to risk all your company assets to develop one project, but you also don’t want to hold yourself back by not being as innovative as possible. And this is especially important now, in the VUCA world.

Welcome to the VUCA world

If you’ve never heard this term, it stands for Volatility, Uncertainty, Complexity, and Ambiguity. The US Army War College used those four terms shortly after the Cold War to describe the more complex multilateral world we live in. And the truth is, COVID-19 has just recently reminded us of it.

This concept describes a world characterized by rapid and unpredictable shifts (Volatility), where no one can predict or even understand future events (Uncertainty). A world where global systems and issues are intricately interconnected, sometimes in a not-too-obvious way (Complexity), leading to confusion or misunderstanding (Ambiguity).

Source: https://orgcmf.com/en-gb/pages/landing/vuca/

The VUCA concept perfectly describes the rapid technological advancements, globalization, and other factors that contribute to constant change and complexity in contemporary times. And be in no doubt, leaders and companies that understand and adapt to VUCA conditions are better equipped to thrive in uncertain and challenging times.

How should your company respond?

Tackling VUCA conditions is not an easy task. Everything is in constant flux, and the future is uncertain. The best thing your company can do is focus on repeatable, continuous innovation. That type of innovation doesn’t involve big, high-cost innovations. The goal is not to spend most of your marketing or IT budget. The goal is not even to create something super-creative! On the contrary, repeatable continuous innovation should come naturally to your company and is aligned with what you do – what kind of products you make or what kind of services you offer.

It’s better to implement more seemingly small innovations than one huge or overly complicated one. This is very similar to the development processes of digital products. With frequent releases, you can achieve more and improve what really matters to your business.

Here are a few suggestions for you to consider. They will help you understand what kind of innovations we have in mind:

If you run an online store, think about how to manage and pack orders faster so that your customers can receive them in under 48 hours (or, ideally, 24 hours).
If you’re developing a mobile app, think about what features would really make it more useful for your users.
If you run a SaaS company, consider introducing something that will help your users make the most of your tool (e.g., an extensive knowledge base or a built-in assistant?)
If you run a service-based business, consider moving scheduling your services to the web so that customers can book your visit 100% online.

Innovations must be purposeful: 6 purposes that are worth pursuing

All those examples are focused on one thing – making your customers’/users’ lives better. And that’s what you need if you want to stay relevant in your niche. We always say this – innovation must always be purposeful. And this purpose has to make an impact on your company or on your customers.

In general, there are six good purposes you should pursue with your innovations:

Help your customers save time
Help your customers do a better job
Give your customers what they need regarding your area of expertise
Facilitate complex processes in your company (in order to save time, workforce, or money involved)
Save the company’s assets without compromising the quality
Eliminate things/processes/problems that stand in the way of your growth

Whichever purpose you choose, you’re golden if you achieve it because each one of them means that your company has just crossed a huge milestone! Sometimes, you can even kill two birds with one stone; if that’s the case in your situation – even better!

The era of one-time projects has ended; innovation needs to be cost-effective and continuous. In a world characterized by uncertainty, mere evolutionary changes are insufficient. We need impactful, economically viable innovations, striking a balance between novelty and affordability.

And this is what our idea of the Innovation Factory is about.

The Innovation Factory: Make innovation a regular part of your business

Our Innovation Factory is essentially a system that aims to consistently generate new ideas, adapt swiftly to never-ending environmental changes, and foster an organization’s curiosity culture.

Digital technology provides a pathway to low-cost innovation in processes and services. Still, it demands appropriate guidance and setup to be truly effective. This underscores the necessity of an orchestrated approach to innovation, where digital tools are leveraged wisely to enhance efficiency and creativity.

Post-pandemic, radical innovation has weakened, and businesses heavily relying on venture capital funding are falling. In contrast, companies that have integrated innovation into their core processes and value streams are now valued in millions.

Repeatable innovation is not just a capability but a sustainable market differentiator. It involves:

Stepping out of comfort zones
Managing risks
Prototyping new products

All of which constitute innovation.

How to introduce innovation to your business

If that’s a new concept in your company and you’ve never encouraged employees to be innovative, you might feel a bit overwhelmed. After all, where do you even begin? Should you just go to your team and tell them to be innovative?

Don’t worry; we’ve all been there at some point!

Start with interviews

Here’s what you can do. First off, you can conduct interviews with your employees to find out what causes the biggest problems for them or your customers. Try to discover what takes too much time, what process is too complicated, what equipment is outdated, etc.

Create an innovation team

Next, you can pick one or two areas to focus on. Pick those that will make a tangible difference in your company. At this point, the best thing you can do is create an innovation team or task force that will be responsible for this new project.

This part is essential; the effectiveness of reaching your goals through innovation can vary depending on the composition of your innovation team. For instance, if you have no researchers on your team, you may end up omitting some interesting opportunities just because you didn’t know about them (there was no one to research them for your team!). It’s just an example, but it shows you need to think holistically about your team.

In most cases, your innovation team should comprise:

One team leader/project owner who will be responsible for the team’s work
One tech architect/developer
One researcher
One legal/administrative advisor
And at least two people from the department that’s closest to the planned innovation (e.g., if you want to improve the way your employees work, you need at least two specialists from the HR department).

Create and innovation-friendly atmosphere

Setting up a team is just one part of the story. What’s equally important is that you create an innovation-friendly atmosphere so that your team is not afraid to experiment and come up with new ideas.

For one thing, you can dedicate specific time or resources for innovation projects or brainstorming sessions. This demonstrates the company’s commitment to innovation and encourages employees to prioritize creative thinking. In Brand24, one of the leading social listening companies in the world, teams have Creative Fridays once a month when employees can devote time to experiment, come up with new ideas, or simply work on self-development projects.

Secondly, it’s important to recognize and reward employees who contribute innovative ideas or solutions. You can do so through monetary rewards, public recognition, or other incentives that reinforce the value of innovation within the company.

On the other hand, you ought to create a safe environment for failure (not every innovation will be a tremendous success). Encourage risk-taking and experimentation by creating a safe environment where failure is viewed as a learning opportunity rather than a setback. Don’t punish your employees for failure if their idea or premise was good. Rather, encourage them to find different ways to achieve the same goal.

Put your innovative cap on!

We live in dynamic and unstable times. Innovation is what can help your company get ahead and stay competitive in the market. Use the advice from this and a previous article to foster an innovative spirit in your company!

And if this is something you need help with, we’re happy to help! We can support you in creating a platform that your company will be able to use to trigger innovation that pushes your business ahead. Would you like to discuss this with us? We are at your service!