How to Avoid Innovation Theatre in your Company?
Companies are ramping up their innovation efforts to foster new ideas, drive growth, and differentiate themselves, with 84% of executives considering innovation dependent on future success, as reported by Accenture. Certain organizations are, however, blindsided by solely driving disruptive innovations without considering impact, falling into the ‘innovation theatre’ trap. Innovation theatre refers to organizations' superficial actions to appear innovative without truly fostering substantial change or generating meaningful outcomes.
In this blog, we'll explore the concept of innovation theatre, the dangers it poses to businesses, and how to avoid it.
Three reasons why innovation is important
EY's disruption readiness survey stated that 67% of investors expressed a desire for organizations to pursue more ventures that have the potential to disrupt the market, regardless of the risks involved and without necessarily providing immediate returns. This growing sentiment is driven by the recognition that companies embracing innovations and disruptive business models can increase efficiency, reduce costs, and improve their bottom line.
Here are three reasons why companies must innovate:
Organizational growth: Per McKinsey & Company, 84 % of CEOs believe innovation might be the only way to achieve long-term growth. Innovation helps create a socially impactful and profitable business organization by pushing the boundaries of what is possible, leading to breakthroughs and discoveries that improve our lives and understanding of the world.
Competitiveness: Innovation is crucial for businesses to stay competitive amidst evolving business models, shifting consumer needs, and the rise of agile startups. Analyzing competitor pricing, products, and promotions provides valuable insights for developing effective innovation strategies outperforming rivals.
Problem-solving: Innovative business solutions are vital for solving complex and unforeseen challenges in areas such as climate change, inequality, and social unrest, by thinking creatively and outside the box.
What is innovation theatre?
A term coined by Steve Blank, a professor at Stanford University, ‘innovation theater’ refers to a scenario when innovation strategies are applied in a way that fails to create value for organizations and society. According to Rita McGrath, American strategic management scholar and professor of management at the Columbia Business School, ‘innovation theatre’ refers to overemphasizing generating ideas while neglecting the crucial aspect of effectively converting those ideas into tangible and valuable offerings.
Often innovation theatre creeps in when companies wish to demonstrate experimentation to internal stakeholders without a meaningful goal linked to it. These high-visibility innovation efforts fail to fit into a company-wide innovation strategy and eventually die out.
How to avoid innovation theatre?
Organizations must learn to bridge the divide between innovative ideals and real-world strategies to become relentlessly creative. Developing a clear innovation framework that aligns with overall business goals is a step toward avoiding innovation theatre. Here are a few ways to avoid innovation theatre:
Focus on creating value for customers
Innovation efforts should focus on understanding customer needs, wants, and pain points and developing solutions that address them.
Move from idea to business models
Several innovations get stuck in the ideation phase, so organizations must set a structured process for individuals to move from an idea to an actionable business model by assessing the idea's feasibility, identifying the target market and competition, creating a prototype, testing the prototype, and developing a comprehensive business plan. This approach will help ensure the idea can be successfully transformed into a profitable, scalable, sustainable venture.
Encourage a culture of innovation
This means creating an environment where employees feel empowered to share ideas and experiment with new approaches. Leaders should also be willing to take calculated risks and be open to new ideas.
Emphasize the importance of data-driven decision-making
A recent study by NewVantage found that 96% of industry-leading Fortune 1000 firms saw tangible benefits from using data intelligence. Data should be at the heart of planning business strategy and innovation efforts, and companies must collect and analyze it to understand customer needs, market trends, potential risks and opportunities, and the success of innovation efforts.
Foster a culture of experimentation and learning
Companies must be willing to try new things, learn from failures, and continuously iterate and improve. Innovation is an ongoing process, and companies that embrace a culture of experimentation and learning will be better positioned to deliver meaningful innovation over the long term.
In conclusion, avoiding innovation theatre requires a clear innovation strategy that focuses on creating customer value, emphasizing data-driven decision-making, and a culture of experimentation and learning. Focusing on encouraging a culture of authentic innovation and staying committed to turning ideas into impactful ventures, companies can avoid the trap of innovation theatre and deliver meaningful innovation that drives business success.
Are you a company looking to achieve innovation that delivers results? Futurize can foster collaborations between academic institutions and corporates to help you build innovation programs to drive new ideas and projects that can create a real impact. Get in touch with us today!
