Innovation doesn’t just happen with products, it happens with people. By creating a culture of innovation within your company you will be creating an atmosphere that fosters creativity from your employees which in turn results in higher productivity and increased innovation down the production line. This is a difficult idea to grab onto for some people, because you can’t really run a return on investment when it comes to creating an innovative corporate culture. Rather, it’s just something that has to be done on faith with the understanding that your investment will pay off at some point in the future and the knowledge that no hard set date can be set.
There are plenty of ideas out there for creating an innovative corporate culture; however what it really all boils down to is creating an atmosphere that fosters communication between employees and management. If employees feel that they can take their issues and ideas to management without fear of reprisal or mockery then a company is well on its way to creating a culture of innovation. To take things a step past communication would be the action stage, where employee ideas are put into action thus showing that management appreciates employee input and respects their opinion. This opens up an important dialogue and will lead to company innovation.
To keep your company one that fosters innovation, you realize that welcoming new ideas and embracing the new approach to a problem or a development is necessary. But even when times are difficult and funds might be scarce for R&D, a company should not forget the role innovation plays in its success, now and in the future.
While the most innovative companies, defined as the ones who are known for it and see the greatest returns, tend to move quickly on new ideas and developments, if the ability to move quickly is hindered by funds, it’s important to not to stop the process because of that. Continuing to encourage employees to look for new ideas and new ways of doing things can pay off in the future, if not now. And if that idea comes along that is clearly one that should not be sat on, the fact that it’s there can cause innovation in ways to look for funding to develop it.
It’s this eye toward future innovation that will keep your employees and ideas from getting stagnant during the rough periods, and can help a company soar when things get better and the ability to move quickly and invest more returns.
According to BusinessWeek’s list of the 25 most innovative companies, today’s top companies said they’re spending the same or less on innovation than they were in 2005. Thanks to the economic crisis, innovation spending has become more like a luxury for some businesses than a necessity. Part of that is the risk inherent in research and development spending. When dealing with a new idea or product, sinking costs into the R&D can end up being money that doesn’t see much return if the idea or product doesn’t pan out. And that’s not something many companies are willing to risk right now.
If this seems to fly in the face of the idea that innovation should continue no matter what, it should be noted that while spending isn’t increasing, companies are finding other ways to continued R&D. The companies who did invest in short-term projects that they deemed to have lower risk were happy with the returns they received. And companies found ways to keep their forward momentum. Procter & Gamble shared costs with other companies, for instance. Still other companies were the exception, like BlackBerry who has increased its R&D staff. And IBM continued focusing on innovation through lowering costs elsewhere by shifting jobs to India and other countries where labor costs are cheaper.
This survey explored the innovation to cash process and assessed executive views on this process. More than 60% of executives surveyed said that their companies would increase spending on innovation in the next year. About the same said that they were unhappy with the financial return on their innovation investment. They survey explored ideas beyond new product development such as portfolio management, life cycle management, and organization.
The survey found that innovation to cash needs to be managed as an integrated process because what happens in one area has implications elsewhere. All activities involved in turning ideas into financial returns need to be monitored constantly. The survey also releases what’s working, what’s not working, who’s on the cutting edge, and a look to what’s ahead in the coming years.