Innovation must be one of the most highly rated values in business today, which has meant it has become a bit of a buzzword, but what is innovation? More importantly, is it worth the hype?

When you look at the mission statements of the world’s top 25 most valuable brands, including Microsoft, IBM and Nike, 25 per cent include the word ‘innovation’. 

Many companies now have innovation departments, senior innovation leadership positions, and specially purposed ‘innovation hubs’. But there is still confusion about what is innovation, and whether or not it lives up to expectations. Is it really as important as everyone seems to think it is?

No point playing lip service

While most companies are busy trying to add innovation into their mission statement, one HR Manager we have worked convinced her executive team to take it out of theirs! She felt it was not really a defining principle for the way her company operated, and that the company needed to be honest about what they were and weren’t focusing on and doing effectively.

There is no point simply paying lip service to innovation, but when the true concept is understood and implemented effectively, it can make a huge difference to an organization.

Forward thinking leaders are certainly coming around to recognising the value.

A recent leadership survey of 1500 CEOs by IBM (that covered 60 countries and more than 33 different industries) revealed that 81 per cent of the CEOs surveyed rated innovation as a ‘crucial capability’ for the future.  Innovative thinking ranked the highest out of all leadership qualities surveyed.

Companies that innovate effectively thrive

The facts are clear: a focus on innovation does lead to better individual motivation and morale, improved employee performance, and therefore better organizational performance.

Bain and Company have found that the top companies in 450 companies surveyed on measures of innovation had better employee engagement, better productivity (up to 50 per cent more), and
better decision-making effectiveness.

Bain’s specific assessment of corporate decision-making effectiveness showed that those in the top quartile were better (in terms of speed, effort involved, quality and yield) at both making and executing decisions. Better decision making, in turn, impacted strategy, project selection and organisational alignment.

Organisations have been found to thrive when they are innovative, and growth typically follows. Companies that focus on innovation usually do well financially. In fact the top 25 per cent of the most innovative companies grow more than twice as fast as the others (13 per cent growth compared with 5 per cent growth). When compounded over five years, this amounts to almost three times growth.

Authentic innovation makes the difference

So what is the message for us? By all means, focus on innovation, but don’t just pay lip service to the concept if you want to gain the most value from innovation, find ways to integrate the value into all levels of the organization as an authentic asset that drives attitudes and actions.

Decide if innovation will be a core value to solve issues and deal with challenges through promoting open thinking and mutual growth. This can be a risk for organisations, and yet the rewards can be great.

Five ways that you can help develop more authentic innovation in the organisation:

• Identify if innovation is linked to deeper core values, and if so share about this - if not, look into how this can be done;
• Develop authentic innovative thinking through targeted training and development programs;
• Establish authentic innovation processes by introducing and establishing workable models for innovation;
• Encourage authentic innovative practices and outcomes through special innovation workshop sessions; and
• Ensure that authentic innovative ideas are supported and nurtured appropriately from ideation right through to implementation
• 
  Be prepared for more open thinking, more radical ideas, more daring risk taking, and ultimately a more vibrantly innovative and successful organization!

Gaia Grant and Andrew Grant are the authors of The Innovation Race: How to change a culture to change the game (Wiley August 2016) along with a number of other international bestselling books and resources.

As the Directors of Tirian International Consultancy they help to create innovation cultures for a range of international organisations (including Fortune 500 companies and NFPs). The Grants are top-ranking keynote speakers, and Gaia is an HD researcher and guest lecturer at Sydney University Business School.

For more information see www.the-innovation-race.com.

Adapted excerpt from The Innovation Race book, and originally published in a similar format as an article online by B&T.