The success of innovation in organizations lies in its constant application. This success is even more powerful if innovation ceases to depend on a single unit in the company and becomes part of the company‘s daily business. Then, the only thing the unit has to do is to drive the development of constant innovation.
According to the Survey of Innovation in Companies of the Spanish National Institute of Statistics, expenditure on innovative activities increased by 3.8% in 2019 and stood at 19,390 million euros. 10.5% of Spanish companies were product innovators and 18.4% were innovators in their business processes in the period 2017-2019. By branch of activity, Motor Vehicles companies accounted for the greatest percentage of total expenditure on innovative activities (taking 10.4% of the total). This was followed by R&D Services companies (9.9%) and Programming, consultancy and other IT activities (8.3%).
“The success of innovation in organizations lies in its constant application”
Even with these numbers, it is important to consider that before developing an innovation project there is an exploratory area that is decisive.
The start of innovation
Where does it all start? In the detection of a need of a group of users. That need may be a latent but unexplored trend; it can also be a specific problem in a specific area linked to the company’s offer. From this clue the whole process is activated, ready to end up in an action plan and be further developed into an innovation project.
Innovational clues are collected from observation, passive or active. Passive observation is defined as that which is integrated. If you run through the exercise of observing what you do from the moment you get up until you leave the door of your house, you will surely be able to identify unsolved problems: Save more water than we use? Eat things that are more suitable for our body? How to optimize the exercise we do passively? Optimize the time of arrival at the destination based on real time mobility information?
If this exercise is incorporated throughout the organization, the passive collection of problems and trends can generate a huge database of potential innovations waiting to be developed.
The active collection of clues is more typical of those organizations that regularly need to activate the exploratory processes of innovation. In this way sessions are organized to detect and prioritize needs and trends to be solved for certain groups of users.
Both passive and active collection require an internal exercise of constant discipline in the productive processes.
Analyse opportunities well
Once the opportunities and trends that need to be addressed have been prioritized, it is time to delve a little deeper into them. It is important to mature them to know how the market is facing that trend, what technologies exist that can provide solutions, or how the investments in that area are faring. In this way, we have a very credible picture to know if there is movement or not regarding that particular problem.
At Peninsula we have developed a service for Market Insights which generates very detailed reports with all this information. Market Insights is constantly in a process of collecting trends that will end up in innovation projects while also providing a constant drip on what is happening around the organization in order to, at the right time, enter that area in innovation.
At this point someone could claim that the end user has not yet been seen during the investigation. And they would be right. It can even be said that this is not useful if what we are talking about is innovation, something that always needs the user at the centre.
But in reality we are at a very early stage of exploration. Both in the passive and active collection of problems or trends, the protagonists in this process know the user. When we dive deeper into the prioritized trend or problem, exploring the market and knowing who is already providing successful solutions shows that if the market is moving, it is because customers are buying.
The process is now ready to leave the exploratory stage: you have the problem or the trend detected and prioritised and you have approached it in depth in order to have a picture of its reality in the market. Now is the time to open up to other points of view so that they can give their opinion on it. Pure, open innovation.
Open innovation involves incorporating expert viewpoints from trend-related fields, or from other companies that have dealt with similar topics and are not competitors. Here it is possible to obtain extremely valuable insights. Knowing what others have done to solve similar problems but in different sectors can be an excellent source of inspiration.
That ecosystem of external expertise should be a continuum in any organization. Moreover, as the inventor of the Open Innovation concept, Henry Chesbrough, points out, established companies must always grow and have enormous external resources to help generate clues that startups can’t even dream of having available.
In a Fraunhoffer Institute study on open innovation in large European corporations, with the participation of Henry Chesbrough, in 2012, 78% of corporations were practicing open innovation. 71% had increased management support for the practice. None had abandoned open innovation processes. Therefore, 10 years later, this practice has grown exponentially.
From all of the above, the next step is to propose an action plan to address (or not) an innovation project based on solutions, testing and activation for its market launch. At Peninsula we call this the Innovation Cycle, running from the collection of trends or problems to the definition of an Action Plan. This Innovation Cycle lasts about two or three months, and it adds value by maintaining an active innovation pipeline within the organization.
Here you can learn about a case in which we have applied this process in depth: Open innovation applied to the future of retail.