The Pillars of Innovation

jake

18th July, 2023

8 min read

The word ‘innovation' often calls to mind the technical and the complex. We think of new industrial or biomedical revolutions, such as reusable rockets or antibiotics, or ground-breaking consumer products, such as smartphones.

However, more often than not, innovation simply comes in the form of a new process or mode of thought; a more efficient way of doing something, an approach for streamlining business practices or a tool to enhance and achieve a goal.

Innovation stems from the world around us, as global citizens draw upon their lived experiences, surroundings and networks. At its core, innovation can be broken down into five foundational elements: passion, leadership, collaboration, mobility, and humility. We will explore each element to uncover its role in driving innovation and the respective business implications today and in the future.

Pillar 1: Passion

The primary element driving innovation throughout centuries is passion. Also referred to as 'intrinsic motivation', this is the rare spark of doing the work for enjoyment's sake. From timeless works of art, to elite sport and engineering masterpieces, passion is at the core, driving inherent satisfaction and joy.

Psychologist Teresa Amabile discovered that the explicit expectation of judgement as part of a greater reward effectively killed creativity. It destroyed innovation in its tracks, while a lack of judgement inspired creativity. Embracing passion and affording it the space to grow and spark creative thinking naturally allows for bold, innovative thoughts and actions.

This feels counterintuitive but is in fact logical at its core. Those who anticipate or allow space for intrusive thoughts and negative feedback are often prevented from exploring the full depths of their creativity and do not innovate. Instead, they cater to what evaluators might perceive as ‘good' and lose their passion and concern for the project beyond the immediate, external reward.

The first step to innovating is to find a purpose. Professionals who spot the whitespace, the problems to be fixed, the new frontiers to explore and opportunities to engage with are few and far between. For that exact reason, this rare group of individuals are in high demand.

Pillar 2: Leadership

Good leadership inspires and nurtures innovation, facilitates growth and rewards strategic and creative thinking. Good leadership not only produces a robust culture but also cultivates the leaders of tomorrow.

The immediate impulse may be to consider ideas that do not meet the threshold of a "great idea" and terminate these ideas before they are fully realized. However, this only reflects decades of poor culture management and a failure to understand innovation. More often than not, failure breeds success, ushering the next idea, or prompting the evolution of an existing concept.

Good ideas come from the petri dish of many other ideas, either incomplete or already in place. Incomplete ideas tend to have grains of brilliance but suffer in their remaining aspects and fail to reach fruition but offer a starting point for others.

Amazon presented a model to follow. It established the 'PR/FAQ' format - a press release outlining a product's intended vision at launch and a FAQ explaining the customer benefit. These employee- submitted ideas then receive evaluation and circulate amongst other innovators. The collective process distributes rewards and recognition instead of one individual out of many but honours the first idea generator.

Pillar 3: Collaboration

The next step in the innovation ecosystem is collaboration, the act of coming together, connecting and ideating on a joint project. In an innovative company, leading executives support the ideas best addressing client needs, both now and in the future. They avoid stifling or constraining thinking, understanding that their role is to create an inspirational environment that nurtures innovative thought.

The United States' Defense Advanced Research Projects Agency follows what it calls the 'Heilmeier Catechism' to evaluate proposed ideas. Self-assessments provide inherent structure, allowing the team to assess risk and define their targets, immediate and long-term needs, costs and overall benefits.

By focusing on clients first, we receive ideas that drive cost-effective growth. Multibillion materials science company W.L. Gore asks explicitly about the customer needs and new products will answer. Then, various stakeholders chime in and judge the merits of proposed ideas, with successful ventures circulating across all the company's departments.

The third step to innovating is to define the client-centric structure, and with it, require discipline. Discipline fans the flame and brings diverse teams together to celebrate their collective enterprise within a culture that explicitly rewards the group while honouring the initial inventor. Effective government agencies or billion-dollar companies follow this model.

Pillar 4: Mobility

Companies across industries oscillate between ideation, refinement, and implementation. When new ideas and potential new revenue streams become essential to operations, companies are in the ideation phase. When ideas surface, whether organically or through strategic acquisitions, they must be refined. Finally, implementation of the ideas.

The overall need and life cycle of the firm dictates the relative importance of each. A heavily saturated market desperately in need of new technology or innovation for further growth prompts ideation. Phones before Apple's iPhone were an example of an existing technology in need of a refresher.

Refinement refers to the improvement of an existing idea, product, or both. Similar to the continuous improvements of Apple's products today, it scans for areas to improve to increase brand power and customer loyalty.

Implementation refers not only to the doing, but to the timing. Effective implementation calls for militaristic thinking. The task here remains to define who the best team members are for bringing the idea to fruition, and then to scale.

The fourth step to innovating is to know your team - treat them like individuals with unique passions, likely expanding beyond contract objectives. We will find that some are highly adept at generating ideas, others at viewing ideas from different angles, and others at seeing them come to life.

Pillar 5: Humility

Innovation demands an almost complete reverse order of how corporate hierarchy operates. Therefore, it also demands humility.

Top executives should serve to create the structure and the environment conducive to idea generation, refinement, and implementation by their employees. This is the other side of the coin to the generally accepted practice of promoting stock ownership among employees and giving them a reason to care.

World-leading companies have shown us that revolutionary ideas, the ideas that make the other attempts worth it, require constructive feedback from all departments within a global corporate culture that encourages failure. It's the sincere trying that matters, in addition to, or perhaps much more than, the results.

Among today's leaders, W.L. Gore and BMC Software encourage employees to fail, which ironically indicates their leadership. Failing means that innovation is happening, and that employees feel unafraid to submit their ideas. Because sparks are flying like a reusable rocket's factory floor, a great idea is all the more likely to land.

Turning Ideas into Action

Today, innovative ideas are needed more than ever as the world faces unprecedented social and environmental challenges. However, these ideas need to be transformed into concrete action, which require a leap of faith. The Googles, Amazons and Microsofts of the world could not exist without the commitment, faith, and continued passion of their entrepreneurial leaders.

For over 75 years, Deltec Bank & Trust Limited has been a champion of innovators, entrepreneurs, and nomads. Our commitment to the global innovation ecosystem is built on a belief in embracing calculated risks, investing in bold thinkers in order to help bring their ideas to life.

With tailored financial services that cater to highly demanding, rapidly scaling, complex and innovative entrepreneurs and their respective ventures with prudence and sound risk management, Deltec hopes to usher in a new era of innovation aimed at tackling some of the world's biggest challenges.

Article provided by Deltec Bank & Trust Limited

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