CULTURE, INNOVATION AND STRATEGY: PILLARS FOR
February 13, 2021
When this provocation came up for this tour of Passeio, I immediately thought: I could make a podcast on the subject. But when I sat down to write I realized that I live all of this in my daily life, but to make something so natural in writing tangible is a difficult task. But I think we can start with data, right?
The National Confederation of Industry (CNI) conducted a survey that brings us the following question: 83% of companies say they will need more innovation to grow or even survive in the post-pandemic world.
Is this a surprise for you? Not for me.
I believe it is no longer about innovating to grow, but about innovating to stay and explore opportunities. I don't like the word survive, it has a scarcity and less prosperous tone and gives the slight impression that we are already dead (but this is a peak for another edition), although the pandemic is surrounding us with that.
Are we going to bring pop culture into our context?
In one of the first scenes of the film 2001 – A Space Odyssey, an ape lifts a bone and uses it to hit another. When you understand that you can use it as a tool, you are at an advantage.
Or in our day-to-day, when I understand that I can use a certain work framework to reach a different result than what I already have, I'm also innovating.
This is innovation because it makes a simple act of exploitation strengthen our species or our business system and save contexts. Every innovation determines a winner.
We have the dimension of innovation as something huge, stratospheric and that makes us create disruptive options, but sometimes it is an intuitive movement that makes us walk through a scenario and build a desirable future.
Innovation saves contexts and we can feel the need for it by looking at two points:
- Growth: we need to innovate to generate new economic, strategic or business value.
- Problem or restriction: if I have problems or something restricting me, I need to innovate.
At one point we are faced with the possibility of walking in prosperity and at the other we find scarcity. But to remedy both, we found methodologies that take us to another dimension.
A tool that supports companies in managing their innovation portfolio is the Innovation Ambition Matrix. It is a refinement of a classic diagram developed by mathematician H. Igor Ansoff to help companies allocate funds between growth initiatives.
Ansoff's matrix clarified the notion that tactics must differ according to whether the company was launching a new product, entering a new market, or both.
In this version, Ansoff's binary product and market choices (old versus new) are replaced by a range of values. This recognizes that the novelty of a firm's offerings (on the x-axis) and the novelty of its customer markets (on the y-axis) are a matter of degree. We overlap three levels of distance from the company's lower left current reality.
In the activity range at the bottom left of the matrix are the main innovation initiatives – efforts to make incremental changes to existing products and incremental forays into new markets. Whether in the form of new packaging (such as Nabisco de Oreos's 100-calorie packs for snacks on the go), small makeovers (such as when Dow AgroSciences launched one of its herbicides as a liquid suspension rather than a dry powder), or larger service convenience (for example, replacing pallets with shrink wrap to reduce shipping costs), these innovations rely on assets the company already has.
At the opposite end of the matrix are transformational initiatives, designed to create new offerings—if not entirely new businesses—to meet new markets and customer needs. These are the innovations that, when successful, make headlines: Think iTunes, Tata Nano, and the Starbucks store experience. These types of innovations, also called disruptive, disruptive, or game-changing innovations, often require the company to invoke unknown assets - for example, building capabilities to gain a deeper understanding of customers, communicating about products that do not have a direct track record and develop markets that are not yet mature.
In between are adjacent innovations, which may share characteristics with core and transformational innovations.
An adjacent innovation involves leveraging something the company does well in a new space. Procter & Gamble's Swiffer is a good example. It grew out of a set of needs that P&G was well aware of and was based on customers' assumption that the proper tool for cleaning floors is a long-handled mop. But it used new technology to bring the solution to a new set of customers and generate new revenue streams. Adjacent innovations allow a company to take advantage of existing resources, but they need to put those resources to new uses. They demand a new and unique view of customer needs, demand trends, market structure, competitive dynamics, technology trends and other market variables.
The Innovation Ambition Matrix offers no inherent recipes. Its power is in the two exercises that it facilitates:
First, it offers innovation leaders a framework for surveying all the initiatives the company has underway: how many are being developed in each area and how much investment is being made for each type of innovation?
Second, it gives innovation leaders a way to discuss the right overall ambition for the company's innovation portfolio.
But be careful! The Essay Design team has a maxim: innovation is not magic, it is not a cake recipe and we are not Palmirinha, although we love this meme.
Innovation is about taking risks in an extremely complex scenario, where we are not clear about what we are going to do until we do, change and break a vicious cycle or the status quo of a process.
Beautiful is not it? Almost poetic...romantic. But can I speak the truth? It's extremely painful.
The dynamics of strategic innovation management depends on aspects such as the business niche, market reality, your company's strategic objectives, team maturity and mainly on how your client/user is behaving or will behave.
That's why we need best practices that guide us in a creative flow that is 100% aligned with the business strategy.
When I took over the Design team, almost 3 years ago, my mission was clear: we have Design Thinking as a process, we have this step by step and we promote innovation with many glory in our customers. But looking at our journey now, I realize that the path to an innovation that saves contexts is much more culturally based than just following the process.
A company's culture is focused on its values, on the behaviors that our employees exercise within the company and on how the strategy is communicated. When we run innovation projects with our clients, we realize that the great value we generate by bringing innovation as a strategy is not only in ROI, but in changing the mental model and the skills that that group performs based on our processes.
I have a triad for me today: culture, innovation and strategy. There's a saying that culture eats strategy for breakfast, right? And this is real. Culturally, we must bring the innovation that leads us to a strategic design of quality, based on data and intuition (we must never lose this ability).
If we are to stay and grow by exploring new opportunities, we must feed our complex system of it, instigate people to change already defined mental models and bring in processes that support us throughout this drive. To innovate you need leadership. Someone or some area must play the bass drum and this responsibility is something incredible, but painful.
I'm bringing up the word pain for the second time in this text because the truth must be told: we learn by doing, failing, and iterating. If you still think you can innovate by being perfect, you're not so perfect: you're wrong.
Be adventurous, be willing and lead... the possibilities of creating a desirable world are there: enjoy.