What do we mean when we say innovation? One of the most common things I hear from clients is that it’s a critical part of their strategy for growth. Far rarer is a consistent definition of the word itself.
In many cases it can be boiled down to something like this: the pursuit of new things. But there’s a problem with that mindset in that it suggests a whole lot of starts and not so many finishes. It sets up your growth to happen in a fragmented and unpredictable way, and is rarely directly connected to your desired business outcomes.
Privately, many leaders concede that innovation is simply one of those disciplines which can’t be held to the same standards as the rest of the business. Because, the logic goes, there’s an unspoken X-factor to innovation that can’t be managed or tracked, and any attempt to do so would be self-defeating.
But what if that wasn’t true? What if a business could turn on growth in the same way they can turn on efficiency: systematically?
We’re finding that when you crack this code, something interesting starts to happen. The nature of growth shifts, too. It becomes a measurable science rather than an abstract art. This type of big, systemic growth is often associated with digital-first giants. But in reality, any company can make growth happen in this way. In fact, it’s becoming the very definition of a competitive advantage.
Building towards that always-on growth state is a journey. So, here are four steps leaders can take to map out their route to it.
Change your focus
The first step on that journey is to directly focus your innovation efforts around a clearly articulated growth agenda. This needs to allow innovation to happen organically, independently, and with a clear intention as well as helping the organization more effectively prioritize efforts.
That final point is key. More often than not, we run into organizations that struggle less with understanding where growth might come from, and more with organizing their efforts in a way that maximizes the return. In our experience, setting a clear growth agenda that can be bought into by every employee is a great way to de-fang that problem.
Importantly, a strong growth agenda will help teams distinguish between where they are looking directly to near-term growth opportunities, and where they are investing for longer-term growth strategies. Both are valuable – but it’s essential to recognize which is which.
Find problems, not markets
For many industries, the best sources of growth aren’t found by eking out ever-diminishing share points in the markets they already operate in. Instead, it’s happening through emerging customer problems that businesses can uniquely solve by deploying their assets in new ways, creating an entirely new market as a result.
For an example, take a look at Toggle’s success. As part of the Farmers Insurance group the company draws on a 90-year legacy but there’s nothing dated about their model. Toggle exists to fulfil a very modern consumer problem within the insurance space, offering short-term and flexible insurance options which cater to a younger generation of renters’ specific needs.
Toggle—and the growth it’s driven for Farmers group—exists because its leadership saw the potential of creating a new market by understanding an emerging consumer need, vs forcing an existing product into a new demographic with inherently different needs. That takes vision, courage, and the strength to break through the barriers of confirmation bias.
Know your gifts
However, identifying a new customer problem only gets you half the way there. Growth will ultimately be driven by your ability to solve that problem better than any other company.
The good news is that there’s a strong chance your company has what it takes. Every organization has a set of proprietary gifts, an impossible-to-replicate set of assets that make them uniquely positioned to meet existing and emerging needs and to create new markets. Yours might have an incredible supply chain or manufacturing capability, proprietary technology, data or partnership ecosystems, a powerful brand, specialized talent, or perhaps powerful and unmatched customer trust.
Often these gifts are right in front of your eyes. But, because they’ve been deployed in service of capturing value in existing markets, their value – or how to potentially use them in a new way—can be obscured. When you can shift your perspective and see your assets in new ways, a world of potential emerges.
Take, for instance, AB InBev, the largest brewer in the world with a portfolio of 500 brands. Their ZX Ventures group has helped the company manage a portfolio of new ventures outside traditional categories, to emerging spaces like craft beer and wine, and even into the emerging plant-based protein space. On the latter point, they discovered that the barley protein they were creating as a by-product of brewing could have a second life as a source of plant-based protein, solving an emerging customer problem and creating a big potential market opportunity.
Switch to always on
Always-on growth requires shifting your mindset. As a leader, your outlook creates the boundaries for your business and defines what’s possible. Reorienting the goal of growth around innovation is a mindset shift that can have an exponential impact on your organization.
So, instead of digging ever deeper into your existing markets, chart a course for the blue ocean of consumer problems you have yet to solve, in areas where your assets have a unique new value. There’s no telling just how much growth you might discover.
Pat Connolly is a managing director at Accenture Interactive.