How leading companies are driving innovation

I was fortunate enough to be invited to the Hargraves Institute’s annual conference last week. It provides a range of its member companies with an opportunity to show off their recent  innovation, leadership and transformation initiatives.

It is a private event, so I can’t document the specific examples on show. What struck me as interesting though was the emergence of a clear and common theme: leading companies are increasingly driving innovation from within.

Company after company talked about innovation as a broader organisational process, rather than a focus on specific products or parts of the production chain. In many cases, there were collaborations across work areas and functions that created the right environment for innovative things to occur.

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Deconstructing Porter & Kramer’s key sources of competitive advantage – Part 1

In 2011, Michael Porter and Mark Kramer published a paper in the Harvard Business Review that spelt out the concept of creating shared value, adding a deeper social context to Porter’s extensive works on competitive strategy.

Whilst this concept has been getting more airtime lately, the words shared value run the risk of (incorrectly) being interpreted as a voluntary activity for business, rather than a staple ingredient for success. As I argued in my recent piece published by the Centre for Social Impact and Business Spectator, shared value is just another name for ‘good business’.

Porter and Kramer identify three main activities that are sources of competitive advantage – and in this and the following two weeks I plan to look at each one in turn.

The first one is re-conceiving products and markets.

Essentially, it is about creating new product or market opportunities by addressing society’s greatest needs. In the past, too many businesses have been content to try and create ‘demand’ for goods and services that they produce, rather than focus on the unmet needs of society, such as improved health and nutrition.

For example, Nestle, as a global commodity food player, has chosen improvements in nutrition, water and rural development as its main areas of strategic focus, and is one of a handful of leading companies that explicitly refer to shared value in their corporate mantra.

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Is social media really the answer?

Have you ever been at a restaurant and wanted to split the bill, only to have the maître d refuse your request for multiple payments? It happens and, ultimately, someone like you has to pay the lot and then start the unenviable process of chasing down your fellow diners for their share.

Imagine if you could ask them to wire the funds to you on the spot via facebook? It might sound crazy, but this is what can be done using the latest innovation from the Commonwealth Bank, in the form of an app called “Kaching”.

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Creativity boosts the bottom line

Business and the arts usually mix like oil and water. However, to be successful at either, you need the ability the think creatively. Check out this ‘virtual’ store initiative from UK grocery chain, Tesco, which significantly boosted its market positioning in South Korea.

There can be little doubt that creativity, when harnessed, drives real business outcomes. In 2010, an IBM survey of 1500 global CEOs found that creative leadership was the one attribute that trumped all of the other desired leadership qualities.

To enforce this point, I was recently working with a very successful social enterprise manager who made the observation that:

“We are successful because we do artistic things with our business.”

What a delightful way to think about business: as a blank canvas waiting to be turned into a work of art. But how many of us actually adopt this mindset?

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