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Modern civilization is built on innovation at an unprecedented level. Innovation in technology, philosophy and culture in the past few hundred years has exploded. We have created more than we had ever in our over 200 thousand years existence as Homo sapiens. There are many important milestones in our early history, with a few including the use of fire and stone tools to hunt and cook food, tablet writing for record keeping, and plant based medicine – all of which laid the foundations for future innovations.


How innovation happens

Innovation, alongside its related themes such as creativity, invention and discovery, is little understood – even among creatives themselves. People typically know how to be creative in their own ways, but it is hard to scientifically quantify and replicate it like other mental skills such as logic. As a general explanation, innovation happens when a solution to a problem is formed in a new way. This could mean the solution combines new information or perspectives which create an approach that is different to what currently exists.


When you look at the history of innovation, it is easy to attribute progress to the work of a lone genius. This idea that innovation is the product of a few exceptional individuals still remains with us today as we idolize great entrepreneurs, scientists and artistic individuals. But in its truest sense, innovation represents the evolution of ideas and memes in a species. The information that innovation needs to occur doesn’t just appear through out of nowhere – something must be known first to be built on. In other words, Albert Einstein would not have been able to develop his great theory if not for the foundational work of other scientists before him.


You can take this concept and go further back in time. If we didn’t develop fire for instance, we may not have been able to consume enough calories and nutrients, which would restrict our brain size leading to a whole new path of our evolution. A more recent example would be the computing revolution. Computers didn’t just appear out of nowhere. There was much work done before that which set the philosophical and technical foundations of computers – with the Babylonian Abacus being one of the earliest devices for computation. Fast forward to the 1800’s, Charles Babbage laid the early technical foundations with the invention of the Difference engine.


This is not to disregard the role of the individual. Certainly, great people are needed to push the envelope, particularly in the past where less knowledge was known. Many of the innovations in the past were a series of great people building on top of each other, leading to new breakthroughs and a reconfiguration of the status quo. But in truth, innovation is a collective endeavour that relies on the right culture, previous knowledge and the ability for great individuals to flourish.


Innovation today

In the modern day, the role of the great individual is becoming less impactful and we are moving more towards a model of collective innovation. In science for instance, much of the new discoveries are being made incrementally by people collaborating all over the world – hundreds of people instead of lone genius’s. The amount of knowledge needed to make breakthroughs means that collaboration is now essential. This can also be observed in the corporate setting. New ideas are formed by entire R&D labs, which are then passed through and refined by other teams in the organization. Patents often have multiple names on them reflecting the collaborative process.


But for the majority of companies, innovation stops at the first breakthrough idea that allows a company to establish themselves in the market. Once a company establishes product market fit, the focus turns towards optimizing the product and scaling as fast as possible. The company begins its transition from startup to corporate, with flexible hierarchies and shoot from the hip processes being replaced by middle managers and stricter protocol. This of course is completely logical – it is very difficult to build something people will pay for and then compete competitively in the market.


Larger corporate companies recognize the need for innovation and have historically commissioned research and development labs whose focus is on the production of new ideas. In a more modern spin, some corporates such as Barclays are now placing more emphasis on what are known as corporate accelerators – platforms for startups to grow. Other companies such as Ernst & Young have launched their own internal startup divisions which goes beyond R&D – with complete freedom to bring new products to market how they see fit.


With the reach of the internet, some companies are looking outside their own walls for inspiration. Looking to the crowd for solutions to problems in the form of competitions such as the X-Prize has proven to be an effective route for a few reasons. The first is that companies can access talent that they don’t have in their organization, which also contributes to novel ways of looking at a particular problem. The second is that companies are able to access many minds with minimal risk which can either lead to the problem being solved or new information provided which can help the in house team finish off the job.


Why we need to rethink corporate innovation

Gradually, companies are starting to realize that there is a greater need for innovation in their organizations. Having one product that the company focuses on works for a period of time, but one thing’s for certain: innovation doesn’t stop. There will always be a better solution that will gradually erode your market share, and in some cases you can be blindsided by a transformative innovation that was many years in the making.


Corporate innovation needs to be looked at with a magnifying glass. We now have a better understanding of human potential and the different strategies we can use to harness it. Design thinking, intrapreneurship and crowdsourcing are a few of the ways we can start using to maximize innovation. And there are good reasons for doing so. The rapid growth and access to information in the 21st century means that things are changing quickly. Product life cycles are shorter so stagnation can lead to death.


Human potential

Our understanding of ourselves has increased dramatically in recent years thanks to advances in psychology and neuroscience. But how we live and organize hasn’t caught up to our new knowledge. There is a tendency to think that people are static – some people have certain fixed abilities that can’t be changed. This is especially true with creativity – we often think you are either a creative person or not. With research into topics such as the growth and fixed mindset and neuroplasticity, we now know that people can continuously learn and develop new skills.


We also know that everybody has the capacity to be creative – it’s a hardwired infrastructure in the human brain. It’s simply the case that many people have limiting beliefs or haven’t taken the time to develop their creative capacity. For businesses, this change represents an untapped potential in your entire workforce. When you start to see each individual employee as an unlimited resource of talent and creativity, you will likely rethink your culture, processes and organization to account for this.


Creative economy

It is said that we are currently in a knowledge economy – one where knowledge workers play the central role. With the advances in artificial intelligence, many of the roles associated with knowledge work including writing, programming and design can be replicated by computers. However, the creative problem solving or artistic touch is something that takes a deeper, more contextual understanding of human affairs – something that can’t be programmed into an algorithm. Eventually, we will transition into a creative economy where those with the best ideas and most creative skill sets will be highly prized. There is a need then to maximize the creative capacity of all your people to ensure that they are relevant in the age of automation.


Hyper competition

Industries across the board are becoming much more competitive. There are a few reasons for this.


  • Globalization: As countries such as China and India enter the global fray, businesses now compete on a global stage. Education standards around the world are rising – innovation is no longer confined to hubs such as Silicon Valley.
  • Lower barriers to entry: Talented people and ideas can appear in unconventional places – from a Siberian village to a second tier city in Kansas, US. A large part of future innovation is digital and computer science related – VR, Blockchain, AI and Data, which can be learned and developed from an individual’s home. This combined with the internet means anybody can find their customers and take on large entrenched players.
  • Capital flow: As traditional industries such as Oil & Gas begin to sunset for industries of the future, capital is beginning to flow towards innovative upstarts. Companies and ideas that can disrupt industries are able to gather warchests quickly that allow them to fight on an even playing field.


This new competitive space creates an environment where corporate innovation has to become a priority. It is no longer simply a case of innovating for growth – it is now about innovating to survive. In the next part, we will take a deeper look at how corporate innovation plays out and the benefits of each aspect.

About the author

Sascha Grumbach

Sascha Grumbach is an entrepreneur with comprehensive practical experience as a business consultant and project manager in innovation and disruption projects.

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