By Martin Conboy (theOutsourcing-guide.com)
“If change is happening on the outside faster than on the inside, then the end is in sight” Jack Welch, CEO, G. E. In fact, the world is changing so rapidly that organisations are struggling to keep up.
I always remember my first boss telling me that if you are not going forwards then you are going backwards! For businesses and economies to thrive and adapt to change they must innovate. These days, clients expect their BPO and outsourcing providers to be innovative in adding strategic value to the outsourcing contract. But how does one become innovative? Primarily, it requires a willingness to take risks. There is no guarantee that trying something different is a pathway to success, sometimes it means it just might not work.
In its early years, 3M aka Minnesota Mining and Manufacturing Company, was on the verge of failure. After years of mining losses management came to a crossroads. Close down or do something different. As Albert Einstein said, “If you want different results, do not do the same things.” 3M executives did what most successful executives do when faced with failure. They used it as an opportunity to find a new way forward. Today, the company generates billions in revenue and employs over 80,000 people.
What is the ingredient that brought 3M back from the brink of failure? While there are several candidates, the one that stands out is innovation.
Many organisations place innovation on their list of corporate values. However, much fewer actually have a culture in place that actively encourages it. Some organisations and industries are particularly risk adverse, preferring to rely on practices and traditions that have produced results in the past than invest in new ideas that might not succeed.
According to a recent McKinsey survey, innovation has become one of the top business objectives in organisations that want to grow, out perform their competitors and, indeed, even survive by creating a higher value proposition. More than 70 precent of senior executives said ‘innovation will be at least one of the top three drivers of growth for their companies in the next three to five years.”
Furthermore, leading strategic thinkers are moving beyond product innovations to innovations in business processes, distribution, value chains, business models and even the functions of management.
Another major barrier to innovation are managers and executives who are resistant to new ideas and suggestions from others, particularly from staff and employees. Internal jealousies stemming from turf wars, departmental or staff rivalries can make change very difficult to achieve.
McKinsey again, 65 precent of the study group expressed concern about the ability to stimulate innovation. Saying ‘mountain; and climbing it can be very different things.
Innovation is not about technology
There’s a tendency to think of innovation in terms of technical innovation. Though technology is important, it is only a part of the picture. According to best-selling business author, Scott Berkun, “Innovation is significant positive change”[i]. That change can apply to technology or to products and processes, or it can apply to people.
In terms of an individual business or enterprise, this could mean implementing new ideas, creating dynamic products or improving existing services. Innovation can be a catalyst for growth and success, helping companies and industries to adapt and grow.
Being innovative does not mean inventing. It means creating a culture of innovation and promoting innovative thinking and creative problem solving.
The drive for innovation
Businesses that are innovative create more efficient work processes and have better productivity and performance. Research from the Institute for Corporate Productivity in the US highlights how high-performing organisations are up to three times more likely to implement people practices that drive innovation[ii].
It’s not just individual businesses or industries that need to innovate to survive – it’s entire economies. The 2015 Intergeneration Report produced by the Australian government has highlighted the need for the Australian economy to create new industries and for existing industries to adapt to a changing Asia-centric world.
As a nation Australia needs to be a lot more innovative.
When outsourcing their business processes clients now expect innovation and for providers to add real strategic value. In fact the term innovation is bandied about so often that saying you are innovative is hardly a point of difference. The world has moved on from BPO 1.0 –lift and shift and clients want a value add that goes way beyond price.
Even very risk-adverse organisations will claim to be innovative. But being risk-adverse can be the main stumbling block to innovation. Relying too extensively on tradition and what has worked in the past will inhibit the ability to enact positive change for the future. “That’s the way we have always done it’ or ‘It’s policy” are attitudes that could be the kiss of death.
Developing BPO and outsourcing relationships that are focused mainly on avoiding risk with for the vendor or the client or both, will inhibit innovation and creative problem solving.
Be prepared to take risks
You’ll never be ahead of the pack if you don’t do something different from everybody else. This is not to say you should become reckless and invest in every idea that’s developed. You do need to develop a process for evaluating the risk and benefits of any particular initiative and decide if the potential benefits outweigh the potential risks.
A good example is Apple the most valuable company in the world. Apple has a program called ‘Blue Sky’ that lets a few select team members take a few weeks at a time to work on a favourite project. This frees up brainpower for innovation.
Collaboration and knowledge sharing
Innovation is not delivered by a single visionary within the company. Regardless of how innovative or visionary a CEO or director of the business maybe as an individual, that does not mean the organisation as a whole will be innovative.
Vital to driving innovation is greater collaboration and knowledge sharing, within the organisation and with external stakeholders such as partners and customers. Collaboration encourages discussion, new ideas being put forward, appraisal and revision of those ideas and greater awareness of the problems being faced by the organisation.
Each employee and stakeholder will have a unique perspective on a problem and are capable of developing a possible solution or suggestion to resolve it.
Driven and inspired from the top
It’s the responsibility of senior management and executives to ensure a culture of innovation is promoted, encouraged and supported throughout the entire organisation.
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