What the most innovative organisations are doing to speed up innovation?

The Road To Innovation In The Middle East. Part 3

By: Carlos Guevara and Dr. Hitendra Patel, with special collaboration of Dr. Saeed Al Dhaheri, Sudarshan Chakravarthi, Lisa Nyman, and Anthony Denatale

 

We asked our clients and experts for their recommendations for organisations trying to master the art of innovation. Here is what they answered.

 

  1. Get your CEO excited about innovation

Ensure frequent informal meetings with the CEO and Chief Innovation Officer. These encounters create the optics that innovation is important, they facilitate decisions and support commitment to innovation. “We pay great attention to our Quarterly Global New Product Launch”, says Sudarshan Chakravarthi, Head of Marketing & Communications at 3M Gulf, about the mechanisms used by this innovation giant to put innovation at the centre of the top management’s agenda. “To make innovation happen, we need to make people believe in it”, says Anthony Denatale, Head of the Innovation Unit at DAFZA, who is leading a major cultural change in his organisation by raising innovation awareness levels, from CEO to floor employees.

 

  1. Create spaces to innovate

“At 3M we have the 15% rule, where we allow our employees to spend 15% of their work time on experimental doodling or experimental projects that could give way to new products”, says Sudarshan Chakravarthi, Head of Marketing & Communications at 3M Gulf. Innovative organisations encourage their employees to try and experiment on concepts that will drive the future of their businesses.

 

  1. Balance results and capacity building

Focusing on results is not sustainable, it only helps to keep the consultants hired, whereas focusing on capability building only results in lots of people, processes, and systems development. This only increases impatience from management, who believe that time and money are being squandered. The solution is finding the optimal balance between innovation results and capacity building. “At Ericsson we use a wide range of initiatives to keep innovation alive” says Lisa Nyman, Head of Strategy & Business Innovation at Ericsson

RMEA, whose company is investing heavily in certifying innovation coaches, has created innovation incentives, and also has recently established a Chief Innovation Officer role

commissioned as a disruptive force to further augment and accelerate innovation via incubation and venture funding.

 

  1. Focusing on BIG ideas

Big ideas are exciting for managers, employees, suppliers, partners, and customers. Big Ideas move the needle on business results. “Focus on game-changing initiatives has to be the starting point… companies mistakenly use six-sigma, TQM or lean management tools for driving breakthrough business growth. These tools are for process improvement, cost reduction, increased predictability, exactly the opposite of innovation”, says Dr. Hitendra Patel at the IXL Center for Innovation.

 

  1. Embrace the digital forces

Most of the clients and experts agree that digital forces are about to disrupt the world as we know it. Some industries will feel this stronger than others. Pioneer organisations are

currently developing digital capabilities to be the disrupters, rather than being disrupted.

 

  1. Customer-centric innovation

Pioneer organisations place the customer at the centre of their innovation process, then iterate, connect and disconnect ideas until they find a unique space in which they can add value. “An example is the Adhesive platform in 3M; it goes from a simple Scotch Tape

which can hold the back side of an envelope, all the way up to Scotch solutions raising an 800 kilo car in Germany off a crane”, says Sudarshan Chakravarthi, Head of Marketing & communications at 3M Gulf.

 

  1. Fail…fast and cheap

Failing fast and cheap is not a new concept, but many organisations are still reluctant to endorse failure of any kind. “One way to overcome this is to use the Lean Startup method,

which focuses on reducing the upfront investment and thus the risk by creating a Minimum Viable Product (“MVP”) to be tested in the market, and based on the customer response

pivot or persevere. Another option is to work closer with customers and partners and thus share the risk and potential return”, says Lisa Nyman, Head of Strategy & Business Innovation at Ericsson RMEA. Companies like Google and 3M encourage innovation time among all their employees. Failure does not need to be expensive. Neither should it lead to career risk.

ixleretor

Lessons from the largest SME accelerator in the world

 By Dr. Hitendra Patel – IXL Center for Innovation and Project Leader of Colombia’s 10x SME Accelerator – Colciencias

 

Google created Alphabet because its founders were concerned that the company had become too big and it had stopped innovating. Innovation is typically associated with startups and SMEs, but startups face many challenges as they navigate the infantry stage. But what about SMEs? Could SMEs hold the magic formula to nurture innovation?

 

SMEs have a higher success rate with new ideas to commercialization than startups or large companies. In startups, the CEO is not a proven businessman or manager; and in large companies inputs and decisions are distributed across the organisation, slowing down or even stopping innovation. In SMEs, the CEO already knows how to buy, make and sell, hire and fire, and navigate complexity while in a startup the CEO is still learning. In SMEs, the CEO is often present in innovation meetings and decisions are made at the moment, and so are resource allocations; while in big companies the CEO delegates responsibilities and is not present.

Innovations pursued by SMEs are oftentimes me-too products but offered with a better value proposition along the value chain of an existing company. SMEs unlock value by innovating these inefficiencies. The impact of innovation growth in SMEs is significant, as it creates accelerated growth compared to big corporations.

 

About Colciencias: 10x SME program in Colombia has promoted regional economic growth by building innovation capacity at hundreds of small enterprises. Delivered in cooperation with the Colombian National Administrative Department of Science, Technology and Innovation (Colciencias) and five metropolitan governments, it guides companies from idea to purchase order.

 dubai-innovation

Public Sector Case Study – The UAE Journey Towards Innovation

Interview with Dr Saeed Al Dhaheri – Chairman of Smartworld and Advisor to several UAE government Entities

 

Can you provide a brief history of innovation in the UAE government and why it is so important today?

 

Innovation in UAE government can be traced back to 1997, with the establishment of the first Dubai Government Excellence Program DGEP, followed in 2009 by Abu Dhabi Award for Excellence in Government Performance, and in 2010 by the Federal Government – Sheikh Khalifa Government Excellence Program. These programs emphasised innovation as a necessary ingredient for government excellence.

 

In 2015, the UAE government launched the ‘National Innovation Strategy’, emphasising innovation in government as a cornerstone for social and economic development and key for increasing UAE competitiveness, providing new job opportunities, and improving the overall quality of life and happiness of people.

 

The 4th cycle of UAE government excellence model adopted in 2016 is now emphasising innovation as an enabler, and giving 20% weight in the evaluation of innovation management practices in government organisations. The Initiative for Government Innovation (IBDAA) has now four innovation categories: the most innovative government department, the most creative idea, the most creative government employee and the most creative government leader. These innovation programs have significantly helped instill a good innovation culture and practices in UAE government entities.

 

What are the most common challenges that government entities face when it comes to innovation?

The Innovation climate in UAE government is becoming more and more visible as innovation is supported and championed by leadership on many levels of government, and exercised in almost all of government entities.

 

Yet, there exist some challenges including insufficient allocated budgets to implement the accepted creative ideas coming through ideation systems. This can result in delaying the implementation of good ideas, which slows down innovation pace, or sometimes renders those ideas irrelevant if not implemented on time.

 

Providing and linking incentives to performance of staff is another challenge that government entities are facing. Without proper incentives, recognition, and reward for staff efforts to innovate, employees tend to lose momentum and passion, and become discouraged to come up with creative ideas or solutions.

 

Last but not least, organisations struggle with creating a risk environment that nurtures new ventures. Innovation requires experimentation and risk taking. If the environment does not allow employees to experiment and try new things with acceptable risk of failure, they will be afraid to test and try different approaches/ways to implement their ideas, which will stifle innovation.

 

What would you recommend to a government entity embarking in the journey of innovation?

 

Government entities should establish innovation strategies, link them to their organisational strategy, and ensure to have a clear innovation process that should be reviewed and assessed from time to time.

 

Adopting agile mindset and agile practices such as agile software development framework is of importance to government entities to be responsive to changes and for their provision of new innovative services.

 

Innovation is more about collaboration; internal collaboration within the organisation and external collaboration with customers and other stakeholders. Government entities need to capitalise on innovation technology to make collaboration possible.

 

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What is not working well

The Road To Innovation In The Middle East. Part 2

By: Carlos Guevara and Dr. Hitendra Patel, with special collaboration of Dr. Saeed Al Dhaheri, Sudarshan Chakravarthi, Lisa Nyman, and Anthony Denatale

 

Many organisations in the Middle East region understand the importance and have started the journey of innovation. We have seen organisations seriously invest in the first two stages of innovation process, Setup and Diverge; however, most do not get past the space of ‘idea box’, Post-Its, and PowerPoint. Here we present the main barriers preventing innovation that ultimately impede ideas to reach the market, as reported by our clients:

what-is-not-working-well-uae-innovation

The quest for the ‘next big thing’

Managing the suggestion box is one of the most common challenges we observe among our clients, as organisations try to get the most out of their employees’ ideas. The problem is that ideas without direction are like a chicken without a head. A suggestion box without a focus and lacking strategic priorities can indistinctively produce ideas that aim to change the world and/or ideas to improve the food in the cafeteria.

Balancing risk with ROI

“Regionally, the main challenge is striking the balance between risk and return on investment” says Lisa Nyman, Head of Strategy & Business Innovation at Ericsson RMEA. This becomes increasingly difficult as industries are under pressure and tend to focus on short term growth and profitability.

Not getting enough ‘dots’

Everybody has the capacity to come up with great ideas, although it is obvious that not everyone is generating them. Which could have something to do with the fact that some individuals have more ‘dots’ than others. “You have to teach people to have more curiosity. Every kid has it and somewhere along the way we, as parents and school systems, shut it down”, says Dr. Hitendra Patel of the IXL Center.

Moreover, we have observed that many organisations are limiting the idea-sourcing initiatives to their own employees, and although this is a good practice the real potential lies in collaborating with customers and suppliers, and searching for idea dots beyond their natural fields of play.

Connect, disconnect, connect again

While having a good number of ideas is important, without proper connectivity there is little hope for innovation.

If ideas are treated as individual projects, we cripple the potential of connecting them with other ideas to generate even a bigger idea.

Providing space for ideas to mingle is one of the least common attributes exhibited by organisation in the region.

The business plan road to nowhere

“Innovation always comes with change and in some cases cost”, says Sudarshan Chakravarthi, head of Marketing & Communications at 3M Gulf. If you want to kill a great idea, just ask for a business plan. Nowadays, organisations are struggling to justify new ventures in light of the strict protocols for budgeting and resource allocation.

Embracing digital, now or later?

“Middle East organisations must adapt to changing times”, says Sudarshan Chakravarthi, Head of Marketing & Communications at 3M Gulf. It is getting easier and easier for new entrants to start to compete with the increasing possibility of acquiring business elements through partners or suppliers. Harnessing the forces that will shape the future and doing it at the right time has become an increasing concern of organisations today.

Moving beyond Power Point

While for many organisations crowdsourcing innovative ideas is a big achievement, the biggest challenge lies in the execution. Organisations struggle with testing and scaling up ideas to produce bigger, bolder, and more innovative concepts that can be taken to reality and generate value.

The culture killers

There are two prerequisites to innovation: acceptance to failure and tolerance to waste. “The biggest challenge is to change the culture of the organisation, from autocratic to democratic”, says Anthony Denatale, Head of the Innovation Unit at DAFZA.

 

ABOUT THE AUTHORS 
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The Road To Innovation In The Middle East

How innovation pioneers such as 3M, Ericsson and DAFZA are navigating internal barriers to drive innovation in the Middle East

 

By: Carlos Guevara and Dr. Hitendra Patel, with special collaboration of Dr. Saeed Al Dhaheri, Sudarshan Chakravarthi, Lisa Nyman, and Anthony Denatale

 

ABOUT THIS PAPER

The 30th of November 2014, Sheikh Mohammed bin Rashid, Prime Minister of UAE and Ruler of Dubai, led Cabinet in a special meeting at a historic fort in the emirate of Fujairah. Under the directions of Sheikh Khalifa, the President of UAE, the Cabinet approved the designation of 2015 as the Year of Innovation.

During the last 2 years we have been collaborating closely with government and private organisations that aim to harness innovation. But has there been any progress? This article analyses the achievements, challenges, and lessons learned from organisation in the Middle East trying to master the art of innovation.

 

MASTERING INNOVATION PROCESS

Before we talk about the state of innovation in the region we must first clarify how innovation works. There are 5 stages in the innovation process:

innovation-process

Setup

This is the step in which the management team must decide on where and where not to innovate, define growth targets, and strategic thrusts for breakthrough innovations.

Diverge

This is the step in which organisations typically brainstorm over a problem. Some organisations do this using internal ideas only, while others decide to crowdsource ideas beyond their organisational boundaries. During the ‘diverge stage’ organisations determine the trends that could impact their businesses and identify insights and idea fragments across the company, competitors, partners and the future.

Connect

The connect stage is one of the most forgotten steps in innovation management, yet one of the most important. At this point the company should provide spaces for ideas to mingle and connect with each other. A powerful marketing idea is useless unless it is connected to relevant means of production and delivery, and wrapped up by the right business model.

Converge

At this stage, the organisation must have connected new idea fragments around a desired ‘field of play’ to generate a range of new business concepts. The ‘convergence’ occurs when the organisation conducts some initial due diligence to validate the priority concept. Out of this process, a few highly viable concepts should emerge.

Emerge

Understand what conditions need to be tested first. Find the right partners. Summarise the business concept in a compelling, visually stimulating, and insightful way. Test with real clients. Build prototypes to ensure the new concepts meet the organisation’s internal conditions for new business development.

 

A COMMON VIEW ON INNOVATION

If you ask a group of 20 people what innovation is, you will probably get 20 different answers. In today’s world some people think innovation is the creation of new products and services, for others innovation is about R&D, or creating new experiences. The truth is that innovation encompasses all of these together.

The innovation process introduced by Dell to its supply chain management, the quality systems developed by Toyota, a practice like Walmart’s inventory management, Google’s use of mathematics to change the media and communications industries, or even Starbucks’ reimagining of the coffee shop experience have all been game-changing innovations.

Simply put, innovation is finding ‘new ways of creating value’. This is the definition that most businesses embrace today in order to drive the generation and application of innovative approaches not only in the development of new products and services, but across the whole value chain.

importance-innovation

The importance of innovation

Regardless of its importance in any priorities scale, an objective must be mastered in order to be successfully achieved. Spreading the word about innovation and its importance doesn’t make us innovative.

The organisation that fails to innovate is on the road to obsolescence. Major companies such as AT&T, Nokia, Dell, and Kodak used to be industry leaders, even dominators, but they all fell behind as their challengers relegated them into a second place (or worse).

 

The value of an idea

A large majority of our clients have implemented systems for idea collection (i.e. idea box), but how effective are these ideas in driving innovation? “An idea by itself is worth nothing unless it is translated into value”. The journey of an idea throughout the innovation lifecycle is quite interesting: it usually starts as a small concept (we call it an ‘idea dot’) that grows by connecting with other concepts; “ideas get connected, disconnected and reconnected with other idea dots until a viable business concept emerges…” says Dr. Hitendra Patel at the IXL Center for Innovation.

innovation-process-table-gimi
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