Innovation Beyond the Four Walls

by | Sep 14, 2012

Social media and virtual communication channels are used by forward-thinking companies to look outside the four walls and connect with customers and other stakeholders in an effort to gain an advantage in an increasingly competitive global marketplace.

That is one of the findings in Innovation Beyond the Four Walls: Breaking down innovation barriers, a new report from industry analyst Cognizant.

Implementing and sustaining innovation in these spheres is a brave new world, considering how relatively new these communication channels are and it takes courage for these companies to enter uncharted territory, the report also says.

Key findings

  • International communication is vital to allow employees to share ideas
  • Internal and external resources are consulted for inspiration and this creates a unique, hybrid innovation model
  • Internal company teams combined with customers are among top performers. Higher satisfaction levels are present across major benchmarks, including refreshing products and services and being consistent in innovation performance.

Internal collaboration systems

Employees can be the most challenging group to organise and manage, especially for global corporations. Innovation can blur the lines between different departments and this can sometimes mean a lack of responsibility and ownership of ideas. However, internal collaboration was the most common tactic used to foster innovation, beating the encouragement of customer input and the use of social media.

German pharmaceutical giant Bayer runs a global initiative called Triple I: Inspiration, Ideas, Innovation. A central intranet site is key to the exchange of ideas and feedback from employees all over the world. Brainstorming sessions generally last for around four to six months and they focus on a specific topic, such as women’s health. Ideas are workshopped and fine-tuned, with awards given to those deemed by a business unit to be of the most value. Ideas that do well involve the spurring of further action, or those that make a significant contribution to an existing project. More than 30 concepts are in development in the company.

Hybrid innovation models

In-house innovation is currently most popular. However, more executives expect to open up innovation to communication with external stakeholders in the near future.

Hybrids are defined as having a 40/60 to 60/40 split in internal versus external resources used for innovation. Internalists have a 90/10 to 70/30 split in internal versus external resources, while externalists have a split of 30/70 to 10/90. Just under half of companies surveyed in the report consider themselves hybrids. External resources can include competitors, universities and think tanks as well as customers.

Getting structure right

Innovation models that involve customers were the second most common, only one percentage point behind internal innovation teams.

A spokesperson from online brokerage firm E*Trade said it was important not to confuse subject matter with what the customer really needs. The firm conducts in-home interviews with customers, along with an online community called the Co-Creation Lab, which are effective in opening up a dialogue, especially in the financial sector, where people may be a little reluctant to open up.

The toolbox

Innovation and collaboration mostly takes place via videoconferencing, with virtual meetings the second most popular method.  Instant messaging came in third. The use of social media is not too far behind and it is growing fast.

Juniper Networks has found success with social media used internally, with its team of engineers greatly warming to it. Beverage company Pernod Ricard found success with social media to connect with customers through the promotion of competitions and special events. Owens Corning has found limited success with social media and has yet to find the channel’s “sweet spot”. A spokesperson for the company acknowledged it may have something to do with the firm mainly being a B2B enterprise, with companies in consumer markets having more success.

How do you measure success?

Companies surveyed in the report said a quantifiable return on investment was the prime motivation in implementing innovation (32 per cent). The ability to enter a new market was the second most common motivational force (24 per cent), followed by the chance to add value to an existing product (23 per cent).

The role of CEOs

Almost one third of companies said CEOs should lead innovation. The CEO was more commonly referred to than the Chief Innovation Officer. Some companies may not have a dedicated CIO or assign the innovation portfolio to other executives.

More manufacturing firms expected the CEO to lead innovation, while fewer healthcare companies did. US companies preferred a CEO to lead innovation, while more European companies mentioned their CIOs.

Major challenges

Finding and keeping talent is a major barrier to innovation. Reconciling a creative vision with what is commercially viable is a significant obstacle for American corporations. Generation X is particularly concerned about intellectual capital being exposed. Acceptance of new products by the public can also be a challenge.

Talent

People who think with both the left and right side of their brains are highly sought after. “Doers” are more effective than ‘thinkers” when it comes to innovation, but of course people who combine the best elements of both are the ones most likely to blaze a trail of the innovative kind.

You can read the report in full here.

Jeffrey Tobias

About Jeffrey Tobias

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well-known startups.

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Managing Director, The Strategy Group

Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well known startups. Jeffrey’s corporate background includes leading global innovation strategy at Cisco, working with large corporates such as Adobe, Westpac, Telstra, Woolworths, and Perpetual.

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