What does it take to innovate?

What does it take to innovate?

What does it take to innovate?

It is widely acknowledged that big companies routinely struggle to innovate. Maybe they are forgetting there’s always more than one way to crack a nut.

This season’s must have fashion accessory for the C-level executive in financial services is the Fintech Accelerator. Big companies are falling over themselves to have their own startup incubator. Why don’t executives in big companies simply set up departments inside their existing organizations to look at new products and services? Why go to the trouble of locating, selecting and babysitting fledgling startups?

There are always exceptions to every rule, but, generally, most big companies fail spectacularly at innovation. They have money to tempt the best talent, existing customers, years of experience in their sectors. So why is innovation so hard? Acres have been written about why startups fail. But, most startups not growing huge is perfectly normal. The underlying reasons vary, including: lack of capital, access to too much capital, bad hires, unfortunate timing, incorrect product-problem fit and so on. But that’s exactly what you’d expect. We won’t learn much by picking over these details. It’s more illuminating to examine why big companies fail to innovate when [a minority] of startups win. What does it take to succeed? We think there’s three key ingredients. Like baking a cake, if one is missing, or out of ratio you get a flop on your hands. They are the Three C’s:

• Creativity
• Contentiousness
• Conscientiousness

CREATIVITY
A creative person thinks about things from angles others don’t consider. They ask awkward questions. They ask “why” a lot. Innovation requires creativity, otherwise product design will just be incrementally better mousetraps. Some big companies are better than others at encouraging employees to think creatively. It is not innate; it can be fostered.

CONTENTIOUSNESS
This is the most problematic ingredient for many big companies. Success requires contentious questioning. Existing group-think needs to be aggressively challenged. This is often where technology vendors fail. When millions in existing revenue depend on legacy solutions, powerful vested interests will defend existing group-think by undermining challengers. The stakes are high because jobs may be at risk.

CONSCIENTIOUSNESS
In folklore, the “dotcom billionaire” makes a fortune overnight. VC’s exacerbate this with their “3-year horizon” investment spectacles. In reality, it takes a decade to be an overnight success. Challengers have to keep their faith.

To be clear, by contentiousness, we don’t mean the bruising personality traits of rude or argumentative people. H.R. managers tend to avoid hiring and promoting unpleasant or aggressive types for good reason. Rather, the contentious are the people who ask questions like: “Why are we doing it this way?” and “Can we do this more simply?” In short, the kind of person who intrinsically knows there is always more than one way to crack a nut.

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About Stream Financial

We enjoy those intractable business problems you hate. We employ our experience and leading edge software solutions to help your organisation realise it’s full potential. Our approach is widely effective for business processes across all organisations and business sectors.


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