The need for an innovation culture has never been greater. Lou Reade reports from the Innovation Conference 2008

Creating an innovation culture – an elusive mix of practices and attitudes that can boost performance – is vital if companies are to differentiate themselves.

But while the subject of innovation is currently in vogue, the road towards innovation ‘best practice’ is still largely unbuilt.

“The whole business of innovation culture has not been tied up, like with Six Sigma,” said Professor Rick Mitchell, of Cranfield School of Management.

He told delegates at the recent Innovation Conference 2008 that innovation can take many forms – and that ‘innovative products’ are just the tip of the iceberg. Many companies are developing innovative services, business models or processes, he said, citing Wal-Mart’s supply chain management, Ryanair’s business model – of offering less, rather than more – and Toyota’s process improvements as leading ‘non-product’ innovations.

Innovation ‘laggards’ avoid risk favour incremental innovation are inwardly focused are over-reliant on focus groups/surveys do things in a way that was successful in the past

And while innovative companies share certain traits, an innovation culture cannot be reduced to a simple checklist. A company-wide change in attitude is often required. “The question of culture comes up when you say: ‘Is there anything else to do other than put these management practices into place?’” said Mitchell. Forging ahead with innovation often means signing up to apparently ‘bad’ business practices – or certainly ones that fly in the face of conventional wisdom. An example can be seen in product development. In an innovative organisation, many ideas are gathered in a ‘funnel’ then whittled down to a few ‘winners’. “It could be that 90% of these ideas are eventually rejected,” said Mitchell. “You can’t be innovative unless you are prepared to accept that waste – but realise that it is necessary.” One company that did this was Altro – which invented safety flooring 50 years ago, but later found that its product pipeline was dry. In a bid to hit an aggressive sales target – doubling turnover, yet retaining 10% return on sales – it adopted an innovative approach to product development.

“We asked for ideas from everybody, and ended up with 700 responses,” said project specialist Richard Peace. “We had to rank them and decide which to use.”

External sources

Innovation leaders believe innovation is more than R&D treat everyone as an innovator accept failure kill bad ideas listen to the customer and dig deeper have a pipeline of radical and incremental innovations

A typical practice of innovation ‘laggards’ (see box) is their inward focus – which has nothing to do with the traditional British sense of reserve and everything to do with timidity. “They do not look for ideas outside their own organisation,” said Marek Szwejczewski, of Cranfield School of Management. “They wouldn’t dream of having an external partner.” This is something that the Technology Strategy Board – which is tasked with driving innovation in the UK – hopes to address, with a raft of initiatives that encourage collaboration. In addition to the 24 Knowledge Transfer Networks (KTNs) – which cover a range of subjects from aerospace to grid computing – it announced a number of areas in which it is encouraging collaborative research to take place. Multi-disciplinary research is actively encouraged – and the whole point is to forge links between different teams.

A further opportunity is in the new Innovation Platforms – which are based on a specific need, rather than a specific technology.

“In each case we’ve identified a societal need – preferably one where a Government department knows it will have to solve a problem,” said Allyson Reed, director of strategy at the Technology Strategy Board.

An example is Assisted Living, which will try to develop technologies to help elderly people live more independently – and is a key focus for the NHS. Others include low impact buildings, low carbon vehicles and network security.

“We will double the number of Innovation Platforms,” she said. “We have ideas that we are working on – and are open to new ones.

“The opportunity and the need to innovate have never been greater.”