How to improve a company’s innovation capabilities?

When you buy an airplane ticket, you first enter your departure and destination. Similarly, when a company wants to improve its innovation capabilities, the first step is to understand its starting point and endpoint.

For different people, the meaning of the word “innovation” is different. Clayton Christensen, a master in the field of innovation management and a professor at Harvard Business School in the United States, divides innovation into two categories: “sustaining innovation” and “disruptive innovation,” which is often translated as “destructive innovation.”

In business operations, “sustaining innovation” is a very common model. For example, the new product development strategy of computer chip manufacturers is based on the typical “sustaining innovation” model. But the problem is that this kind of innovation often takes place in an already mature market, so the winners of “sustaining innovation” are often only large companies in the market that are in a leading position, i.e., so-called “dinosaur companies.”

But even if they can become “dinosaur companies” in their industry, their good days are usually not too long. These companies seem to be “giants” in their industry, but their ultimate fate is often defeated by companies that develop “disruptive innovation” products.

The so-called “disruptive innovation” refers to creating a new market by introducing new products or services. In the initial stage, if evaluated by performance indicators valued by mainstream customers, these products and services are actually worse. For example, mobile phone chips were inferior to computer chips in terms of performance in their early days.

But what is crucial is that “disruptive innovation” not only adopts new technology but also adopts new business models. This results in “disruptive innovation” products being often cheaper. Therefore, those previously thriving “sustaining innovation” products often end up being replaced by “disruptive innovation” products. This is the process of “dinosaur” extinction.

For today’s Chinese companies, many traditional mature markets already have “dinosaur companies” occupying positions. Therefore, we can only introduce new business models and use “disruptive innovation” products to erode and eventually overthrow the market of “dinosaur companies,” which is the only possible way to succeed.

But “disruptive innovation” does not happen just by posting a slogan on the wall; it requires a complete management model. This management model is fundamentally different from that used by those “dinosaur companies,” whether in terms of culture, processes or methods.

If you want to improve your company’s innovation capabilities, QGENIUS’s Innovation Company Management Guide is a management standard that you can set as your endpoint. This guide provides a management framework for “disruptive innovation” companies. This is an era when new forces are rising. Innovative companies are replacing traditional “dinosaur” companies. The Innovation Company Management Guide provides a “dragon-slaying sword” for these “disruptive innovation” companies.

Knowing the “endpoint” is the first step, but what is usually more tricky is the “starting point.” Each company’s internal and external situation is different, and the starting point for improving its innovation capabilities is also different. But just as there is a famous principle in traditional Chinese medicine when treating diseases: treat its symptoms when it’s urgent and treat its root when it’s slow. This also applies to the practice of improving corporate innovation capabilities.

For many companies that previously advocated the “leadership” model, internal communication within the company mostly relied on guessing. As a result, when innovation encounters difficulties, employees will first leave evidence to protect themselves and be wary of each other and not care about things that do not concern them. The company’s internal culture is toxic to innovation and naturally makes it difficult for innovation to occur.

Countless practices tell us that if a company wants to have innovative capabilities, it must first establish an innovative culture. Innovative culture is the root of corporate innovation. But the difficulty in establishing an innovative culture lies in that it often takes a relatively long time. And although its establishment is a gradual process, it can be easily destroyed.

The primary skill here is to first establish trust among team members. To form team trust requires not only changes in awareness and systems but also establishing the position of a mentor within the team is very important. In China, we often call it an innovative political commissar. Professional mentors will help teams focus on problems and build consensus through team guidance techniques. This is precisely what many companies lack.

Secondly, innovation is a transformation for many companies. Therefore, it is very important to make the entire company aware of the importance of innovation. Many managers have received systematic education, but some of their management knowledge is outdated and even becomes an obstacle to innovation. Through learning, especially by mastering new business thinking and management methods for middle and senior managers. They will truly realize why they need to change. Only when the company reaches a consensus and adopts the same innovation management language can the company form an innovative synergy.

Another important means of promoting innovation is to let managers master “management psychology.” Many of the problems encountered in innovation are not technical problems, but “people” problems within the team. Many companies in the early stages of promoting innovation will encounter situations where everyone thinks that innovation is very important to our company, but the problem lies with others. Once managers have mastered psychology, they will understand that many of the problems faced in management are psychological problems.

We are all in this corporate system and are also part of this corporate system. Therefore, only when individuals change will the entire company truly change. This is a “cure-the-root” process that takes time but is fundamental to improving corporate innovation capabilities.

But if you are in charge of innovation work, in addition to “curing the root,” we often have to take some “cure-the-symptoms” measures at the same time. That is to say, we should select some places that can achieve results as soon as possible according to the company’s own situation. Let the team see the effect of innovation as soon as possible so that more members of the team will actively participate in the process of innovation transformation.

Business model design is often a lever point that can move thousands of pounds with four ounces. Business model design is fundamentally about how to make money. But most companies’ business models are very ordinary, which is also why most companies’ profitability levels are around industry averages. Therefore, once the business model is redesigned or improved, significant results can be seen.

All good business models are built on a good product foundation, so the position of “product manager” is very important for corporate innovation. They are usually also direct designers of business models. Recruiting good “product managers” or improving the capabilities of existing “product managers” is very important.

Similarly, user experience is also very important for today’s product success. For many companies’ products and services, there is room for improvement in this area and often significant results can be achieved. In addition, no matter which industry your company is currently in, digitization is a significant trend in the future. Mining opportunities from data often brings us unexpected gains.

Innovation is a systemic issue and improving corporate innovation capabilities also requires thinking with systemic thinking. A core idea of systemic thinking is that “structure determines behavior.” The lack of corporate innovation capabilities is often determined by the internal structure of the enterprise. Therefore, promoting innovation means adjusting the “structure” within the organization, namely culture, processes and employees. In particular, improving the capabilities of key position managers is often our leverage point for leveraging corporate innovation.

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