A New Flight Plan for Innovation: Innovation by All

A New Flight Plan for Innovation: Innovation by All

Innovation is top of mind for executives today. But the term has evolved over the past few years, taking on a new meaning as it has adapted with the pace of business amid ever-more global commerce, rapid technology shifts, and massive market consolidation and disruptions. Innovation now is as much about agility as it is about invention.

Business leaders need more speed when it comes to changing internal systems, launching new products in advance of competitors, and responding to market challenges and opportunities. They must manage the dual demands of preparing for the future of their business while also optimizing current operations. This can mean juggling multiple business models simultaneously. And the importance of agile inventiveness isn’t confined to Silicon Valley. Virtually all industries are facing digital transformation challenges. Think of the way the once-staid grocery business has been upended by Amazon’s push into fresh food delivery, its acquisition of Whole Foods Markets, and the arrival of various “meal kit” players.

But leaders have been hampered by conventional wisdom around innovation that our research shows misses a key component. Corporate innovation strategies of the past 10 or 15 years have been dominated by siloed R&D teams, with the occasional hackathon and requisite suggestion box thrown in.

There’s been increasing recognition by some business leaders that they must foster cross-functional collaboration and connections with partners outside their company walls. But most recently, the conversation around innovation has been dominated by discussions of new technology, such as artificial intelligence, blockchain tools, and the automation of entire job classes. That narrative has focused some on the importance of a few key skills, but mostly has centered on strategy and technological infrastructure.

There’s been a crucial, missing element to this conversation about the emerging digital age: the people piece. Many leaders today are failing to fully tap their human potential, which paradoxically has increased even as machines have become more central to business. Armed with unprecedented access to information and data insights, today’s employees have greater analytic and creative powers than ever before. Human traits like passion, integrity, and a willingness to collaborate also are becoming more important to customer success. What’s more, human judgment is vital to realizing the full promise of this era’s new technologies.

The capper is that traditional top-down efforts—and half-hearted “empowerment” programs—are too slow for the pace of business today.

John Chambers, the former Executive Chairman and CEO of Cisco, noted at the Great Place to Work For All Summit that the number of devices connected to the Internet will explode from 17 billion in 2017 to 500 billion in 2027. That means companies will have to make sense of unprecedented amounts of data. And they will fall behind if they wait for senior executives to learn about problems and make decisions. “You’re going to have information coming into your company in ways you never imagined before,” Chambers says. “Decisions will be made much further down in the organization at a fast pace.”

Yet a minority of companies fully trust or tap the ingenuity of their people. In fact, when asked about their biggest challenges with innovation, many leaders say their own people are the biggest obstacles to improved invention and agility. At a recent conference on innovation, some executives even stated “The vast majority of people don’t want to change,” and “The pace is very hard for people to adjust to.”

New research from Great Place to Work turns this conventional thinking on its head and reveals that participation from every employee within an organization is the key to greater innovation. In a study of 792 companies across a wide range of industries and roughly 500,000 employees, we found that organizations in which everyone participates in generating new ideas, products, and services speed past their rivals and adjust rapidly to changing market conditions.

These leading businesses practice what we call Innovation By All. Innovation By All maximizes a company’s human potential by tapping into the intelligence, skills, and passion of everyone in the organization. Companies that build an Innovation By All culture generate more high-quality ideas, realize greater speed in implementation, and achieve greater agility—resulting in 5.5 times the revenue growth of peers with a less inclusive approach to innovation.

Central to that acceleration are front-line employees. Our research shows that at the fastest, most nimble organizations, there are nearly 11 individual contributors pulling the company forward on innovation for every two that act as a drag on growth and agility. In this blog series and a series of subsequent papers, we share the stories of organizations zooming ahead on innovation. We spell out the critical elements for building an Innovation By All culture, and describe the three stages organizations move through as they create an ever-more inclusive, powerful approach to invention and continuous improvement.

We also introduce a new metric we’ve identified—the Innovation Velocity Ratio—that is a crucial gauge of organizational speed and agility. We will show how these concepts apply not just to tech companies, but to all companies. Our research makes clear that Innovation By All is the future. To thrive, organizations must start acting less like a hierarchy and more like a flock of birds—avoiding sudden threats and taking advantage of nascent opportunities through decentralized yet networked decision-making. Organizations acting as a flock can change course nearly instantaneously. And they soar.

Download our entire Innovation by All report today for the full story.


Ed Frauenheim