Evidence of the power of innovation abounds. Witness the iPod, the $4 latte or even the now ubiquitous DVD. A compelling idea, well executed, can transform a company, an industry, or an entire marketplace. Clearly, the importance of continually generating ideas is undisputed. Yet 53 percent of executives believe their organizations aren’t doing enough to promote innovation, which raises the question—how can companies consistently foster innovative thinking?
At a CEO2CEO session on enterprise innovation, three panelists identified four elements critical to fostering an enterprise-wide spirit of innovation.
Widen the scope. Ideally, everyone in the company is an innovator, noted Bob Fell, founder and CEO of Pricelock.com, which pioneered the idea of combining technology and commodities expertise to provide fuel price protection to consumers and businesses. “If you can create a culture where everyone feels as if he or she is an owner and everyone feels they can contribute ideas, you’ve created the right type of company,” he says.
Accept, even encourage, failures.For Lyndon Faulkner, CEO of Pelican Products, celebrating idea generation—even when the ideas are just plain bad—has nurtured something of a feeding frenzy of idea generation. “It’s about fostering ideas, but you’ve also got to allow people to make mistakes,” says Faulkner, whose company manufactures advanced lighting systems and virtually indestructible cases. “That breeds frenzy because people want to be involved—and they know they aren’t going to get whacked if they make a mistake.” The strategy has paid off. Each year, a full 30 percent of the company’s revenue comes from new product development, says Faulkner.
Assume transformation is necessary. Dispensing with the question of “Should we?” changes the conversation, asserts Geoff Vuleta, CEO of innovation consultancy Fahrenheit 212. “The only way to get to transformational questions is to purposefully chase them—and that starts with assuming that transformation is not optional.”
Cultivate a healthy disrespect for present reality. “Why are 98 percent of [alcoholic beverages sold at a relatively high proof], when less than 15 percent of the population find them palatable that way?” asks Vuleta, whose company recently worked with Diageo to revitalize its Smirnoff brand by introducing ready-to-drink beverages. Complete rejection of the status quo led to the concept, notes Vuleta, who points out that liquor companies consider themselves in the consumer packaged-goods business. “Show me another consumer business where the vast majority of people find what you make so unpalatable that they have to do something to it before they can consume it.” The bottom line: Questioning the accepted norms in a business or an industry can bring different—and potentially groundbreaking—approaches to light.