How to foster innovation at work

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Article by 
Tefi Alonso
  —  Published 
December 29, 2022
June 7, 2023

An overview of innovation at work

Companies that recognize this build their culture and processes to facilitate innovation. They realize that waiting for the inspiration to hit isn’t a consistent way of getting ahead.

Simply put, innovation is sometimes exactly what your company needs to cross the gap between its current state and the future you’ve imagined where it thrives.

In this article, we’ll discuss the prerequisites your company needs to have to dramatically increase its chances of innovating.

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Why it’s important to foster innovation at work

Because it creates a competitive advantage.

Innovation creates new opportunities, redefines industries, and establishes new markets. It’s the most powerful weapon in a company’s arsenal that can take it from struggling for survival to leading an industry.

Innovative companies recognize and ride trends early, before their competitors, capitalizing on the opportunity and reaping the majority of the profits.

Innovation is much more than an attempt to improve productivity.

Larger corporations should approach innovation as a top priority.

Because if they become complacent, they won’t have the capacity to respond to industry disruptions.

Take, for example, the banking sector. The Bank of America or HSBC never faced the need to innovate because of their industry’s nature. They felt that people wouldn’t stop needing their services and nobody else could offer the credibility and safety they offered.

Until PayPal came. And then Afterpay.

These companies came and disrupted the status quo. They challenged the traditional business models and redefined core concepts of the banking and financial space. The problem that traditional players faced was their own incapability to pivot and adapt to the new reality.

How can you adapt your strategy and execute your new initiatives when your latest innovation to your strategic process is migrating from Excel sheets to smart sheets?

The answer is simple.

You can’t. So, to stay in the race, large corporations perform an internal transformation to adapt, often running on reserve. What happens if the reserves run out before the transformation occurs? Ask Kodak and Blockbuster.

Get in touch with Cascade to learn how our Strategy Execution Platform can transform your strategic processes and insert an element of adaptability.

The 4 types of innovation

According to Frank Rothaermel, there are four types of innovation based on whether it targets an existing or a new market with existing or new technology:

  1. Incremental innovation
  2. Architectural innovation
  3. Disruptive innovation
  4. Radical Innovation

Incremental innovation occurs when existing technology improves to better serve an existing market. Its core capabilities stay the same, its target market stays the same. The improvement is on its efficiency, that’s why it’s incremental.

Architectural innovation occurs when existing technology targets a new market. The technology’s competencies stay the same, but it gets a revamp in design to fit the new market's context. It broadens the use and value that particular technology brought.

Disruptive innovation occurs when new technology is used to target an existing market. It’s disruptive because it challenges the status quo. It solves a problem in a new and different way.

Radical innovation occurs when a new technology is invented to target a new market. In other words, it’s a category creation occurrence. It solves a previously unsolved problem creating a new market and establishing new technology simultaneously. It’s radically different from what existed before.

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Technology refers to a broad cloud of activities.

Activities that range from business models to supply chain to product developments. “Technology” is but the tool bearing the innovation.

Here are some examples of innovative ideas:

  • Offer a completely different benefit or address a completely new problem.
  • Build a brand completely different from the industry’s norm, e.g., focus on sustainability when nobody else does it (see Patagonia).
  • Develop a new business model, e.g., bring the subscription model into a buy-once industry.
  • Design your customer experience with fresh-for-the-industry principles.
  • Develop engineering innovations (see Dyson)
  • Use a breakthrough in the production process to your advantage. (see Under Armour)
  • Do the same on the distribution side of your product.
  • Spot adjacent products or services that your customers use and be the first to expand towards that direction (see Kellogg's).

How to encourage innovation at work

Focus on 2 key cultural drivers of innovation:

  1. Develop internal trust
  2. Establish a long-term vision

Develop a safe environment where your employees trust each other and have each other’s back. Only then will they have the courage to try new things, fail and learn from them. Innovation is a process of discovery, not a request.

You can’t say to people, “I want you next week to innovate,” and expect them to bring you the next industry-disrupting idea.

That’s not how innovation works.

It requires an environment where people trust each other, share information and treat mistakes as lessons instead of threats. The biggest barrier to innovation is not a lack of great ideas but a lack of execution. This brings us to the second key cultural driver of innovation.

Establish a clear long-term picture of the upside of experimenting and pursuing new opportunities. Take the focus away from the cost of failure or the direct impact of the results and put it on the long-term benefits of achieving a specific vision or on the progress achieved.

Because then, people will navigate around obstacles and find creative solutions to make that vision a reality.

Don’t micromanage, highlight the destination.

Innovation vs Efficiency

An R&D department’s purpose is invention. Invention, by definition, is treading in the unknown, looking for something that has not existed before. So, how can the search for it be efficient?

It can’t.

Innovation relies on a trial and error process to occur. You experiment, fail, learn from your failure and try again. The secret lies in the “try again” part — failure when experimenting is a certainty. Not giving up or losing faith in the process is what brings success in the end.

Don’t expect innovation to be efficient.

How to innovate at a company level


Here are four things you can do to foster innovation more consistently.

1. Collect & analyze data

With an obsessive focus on your customer.

Innovation doesn’t happen in a vacuum. It always counters a hypothesis, a common belief, a previous process, or the lack thereof. The most incredible innovations stem from a profound insight. Insight is generated by asking new, specific, and creative questions about the data you’ve collected.

Every company that leads an industry collects and analyzes its customers' most recent and relevant data. That’s how Amazon stays ahead of the curve, how Disney remains the world’s entertainment leader, and how Netflix chooses to expand to an adjacent category before any other streaming service.

It’s how large corporations gain a competitive edge and retain it.

2. Experiment and review

Collecting data is rarely the problem (though some do it better than others).

Most companies consistently fail to ask the right questions and then act on the answers. It’s why expertise in the industry is so important. 

Seasoned players in the company know firsthand the universal problems in the industry and are best equipped to guide the search for those precious insights. First, they can specify assumptions and break them down to their most fundamental nature to create targeted experiments. Second, they can interpret the experiment results more accurately and draw the right conclusions.

A trial-and-error process without a proper review habit is useless.

3. Create an adaptable organization

Acquiring customer insights and spotting market trends early is meaningless if your company can’t take advantage of them.

Create a culture of innovation by doing two things.

Expose your strategy to your people. Communication doesn’t equal understanding because not all communication methods are created equal. You might regularly communicate your strategy to your people, but it’s hard to give the whole picture AND clarify priorities. At the end of the day, people need a clear context to make decisions. Use a strategy execution platform like Cascade to import your plan and provide that context on-demand.

Reallocate resources faster. What’s the point of building an award-winning data team that extracts cutting-edge insights to inform your strategic initiatives if you don’t have the capacity to execute them? There is none. It’s a waste of time and resources. Treat the allocation of your resources as a fluid and ongoing process to develop the capacity to take advantage of emerging opportunities.

4. Develop discipline in strategic execution

There are no perfect strategic plans.

This is worth repeating.

There are no perfect strategic plans. Treating yours like that is a mistake, no matter how much work your company has put into it. This doesn’t mean that you need to create one from scratch every quarter. It does mean, though, that deviation from it should be anticipated and met with a friendly eye.

Innovation requires the capacity to adapt and execute.

A team, and by extension, a company that is unable to pursue new opportunities due to rigid plans and processes isn't any different from the team that doesn’t spot the opportunity since no team takes advantage of it.

Don’t think of execution in terms of strategic discipline because you’ll create an unhealthy attachment to your initial plan. Instead, develop discipline in strategic execution. That is the capacity to adapt to the market’s circumstances without losing view of your top strategic priorities.

Get in touch with Cascade to learn more about our Strategy Execution Platform and how you can transform your strategic processes to cultivate innovation.

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