Competitive dynamics
Competitive advantage is harder won than ever. Businesses need to constantly 'self-disrupt' to keep pace with consumer demands and stay ahead of the competition.
This means institutionalising innovation and going big on brand.
Just three retail ecommerce companies own
of US ecommerce market share
Source: Statista
Only
2.17%
of ecommerce visits convert into purchases
Source: Statista
Innovation as advantage
Adapt or die has been a necessary adage for the modern world. These days it seems more relevant than ever, because disruption is happening faster than ever.
As the IMF’s Kristalina Georgieva put it, we're facing crisis upon crisis. UniLever CEO Alan Jope echoed a similar sentiment, stating consumer goods companies should get used to “crisis being more or less the new normal”. Businesses have been rocked by Brexit, COVID-19, the war in Ukraine and now economic unrest, rising inflation and currency volatility in rapid succession.
In response, many leaders have focused their time and energy on these crises and immediate business priorities. But in only focusing on the now, are leaders setting themselves up for issues further down the line?
McKinsey found that organisations that maintained their innovation focus through the 2009 financial crisis emerged stronger, outperforming the market average by more than 30%.
But it's not always easy, or even possible to institutionalise innovation.
To help you tackle this challenge we spoke to two innovators with very different challenges and perspectives to get their recommendations.
How can business leaders institutionalise innovation? They can't. Sorry to be blunt! But for me, in most businesses people are mainly focused on doing their jobs. They're used to executing a business-as-usual process as well as possible. They can suggest how they might do these things faster, and with higher quality. But there's only a small percentage of people doing their ‘day job’ who will have the time and space to identify significant innovations.
Relying on the same people, processes and resources to deliver radical ideas doesn't work. To achieve breakthrough innovation, you need to separate the people doing the day-to-day work from those responsible for innovation.
You can't treat your innovation team as another department in your business. Let them work like a start-up. Give them the freedom to respond quickly to market forces, try different strategies and decide how they use their funding.
Normal decisions tend to be based on a business case. With innovation you can't do that. You need to be willing to spend money knowing that you might get unicorn benefits from that investment, but equally you might get nothing.
Accept setbacks are going to happen, and you'll be faced with things beyond your control. Don't take them personally and find what you can learn from them to use in the future. Be an optimist, and find the opportunity, even when you fail.
Gerard Frith
Entrepreneur in Residence
Gerard is a start-up founder, innovation leader and entrepreneur who loves to turn a gnarly problem into a beautiful solution. He has a range of experience in AI, medicine, app development and customer experience, and for the last few years has been working to bring innovative solutions to the legal industry.
I think you can take people with you on your innovation journey. If you make people feel like they're being heard and their contribution matters, they'll be more inspired to help deliver innovation.
You do need a structure in place. Lots of people can have good ideas, but without a system in place to progress them from ideation to execution they'll get lost. We've introduced innovation ambassadors to help encourage ideas, and our tool Eureka to formalise a process of taking these ideas forward.
It's also a cultural thing for me. You need to be able to communicate a clear, strategic purpose for people to work toward. It needs to be simple enough for you to easily explain to prospective customers, while flexible enough so that everyone can relate it to their role.
Having this purpose in place, and a way for people to get involved in helping achieve it, will be crucial to make sure everyone heads in the same direction and contributes engaging ideas.
Mark Barron
Head of Clients and Innovation
Mark is Head of our market-leading Inward Investment practice and sits on Taylor Wessing's executive board as Head of Clients and Innovation. He was the founding partner of our Silicon Valley office and since returning to London has worked to bring the innovative approach of a tech start-up to how we work.
Conclusion
Two very different views on institutionalising innovation then. But what do they both agree on?
It's about the customer.
Innovation is often seen as having that lightbulb moment – coming up with a million-dollar idea that changes everything. But at its heart, innovation is about solving problems, and meeting a customer's current or future need.
There are different approaches you can take, but the single most important thing you can do is get out there, engage with your customers and listen.
By frequently reviewing how your customer's needs are changing, you'll be well placed to outmanoeuvre your competitors and ensure you're growing in the right direction.
