The art of innovation


What do innovative companies like Google, 3M, Apple, and P&G have in common? Many pundits will point to their breakthrough products, deep understanding of their customers, and healthy R&D spending. What is often overlooked, however, is how these firms create the right organizational environment for innovative practices and products to germinate and flourish. Since every firm and market is different, designing the right organizational mix is as much art as it is science.

We have identified four organizational success factors to incubate innovation and maximize R&D productivity:

  • Consistent leadership
  • Supportive Culture
  • Specialized innovation methods
  • Enabling management systems

Not every company, however, recognizes that great ideas need a supportive organization to bring them to commercial success. One Canadian banking leader, RBC, heeded these lessons 12 years ago when it launched their Applied Innovation (AI) model. Today, AI stands as one of the most unique innovation programs in the Canadian banking sector. Below are some of its secrets:

Leadership

RBC’s leadership from the CEO down sees innovation as a strategic enabler and necessary for a high-performance company. Its leaders prudently define the aim of innovation (to improve customer value and drive operational enhancements) that will drive their innovation strategy.

Culture

RBC’s innovation mission is to continually seek out ways to solve customer problems and improve operational efficiency and effectiveness. This mission has long been embedded within the corporate DNA and is supported by all business lines and functions. The treatment of “failure” is illustrative of its supportive culture. A failed innovation is not unfairly punished. When something is not working out, managers are encouraged to “fail fast,” in order to minimize losses and generate learnings.

In order to be a truly innovative company you must be able to provide employees with a safe environment to test ideas in real world situations,” says Avi Pollock, vice-president of innovation and strategic planning at RBC. “Not all ideas will be suitable for commercialization, you need to apply good judgement on when you move forward or withdraw.”

Innovation Methods

AI is a centralized group with an enterprise-wide mandate. Various methods support innovation. One important asset is the innovation lab, where technology vendors are brought in to demonstrate functionality and collaborate with the RBC team to run pilot programs. By making something that can be seen, touched and felt, the lab allows RBC businesses to try new things in a safe environment.

Recognizing that good ideas reside everywhere, RBC opens up its innovation process to bring in external ideas and practices. One interesting example is its Prototyping competition. On June 7, 2014 the event will give students 24 hours to build a prototype app that solves a pressing business or customer problem. Competitions like this bring in breakthrough ideas, build the RBC brand and identify capable people to recruit.

Management systems

Innovation goals are embedded within AI team’sperformance tracking system. These seek to balance focus and funding around a short and long term time horizon. Though driven by business needs, the systems encourage business alignment, close collaboration and regular communication between the AI team and all business and functional teams.

RBC’s AI model has helped produce some impressive customer and operational wins:

Extending to the Branch: Retail banks are always challenged with ensuring adequate coverage at each branch of key services like wealth management advice and non-English language support. The innovation idea (which came out of the Next Great Innovator student competition) is to deliver these services through remote video and tele-support from a centralized location. To refine the service, RBC’s innovation lab developed a pilot project with real customers, advisors, issues under actual conditions. To date, this innovation has led to the enablement of 50 branches across Canada that can now offer clients real time video conferencing meetings with financial experts. Client feedback has been very positive, and this innovation has allowed RBC to differentiate its ability to offer financial advice to customers.

Workplace of the future: Born out of the 2009 Next Great Innovator competition, this operational innovation was designed to boost employee communication, collaboration and engagement across the enterprise. The initiative, RBC Connect, featured an internal social networking platform with supporting practices and processes. The results have been impressive. Employee active-usage rates are 60%, four times the benchmark for social platform adoption. Quality of communication has also exceeded expectations. Users contributing content exceeds 40% versus 10% on typical internal collaboration platforms.

Cool ideas are just the first step in launching breakthrough innovation. Whether you are leader-inspired like Apple or serial experimenters like Google, your company will need a supportive organization to capitalize on the promise. Achieving this will require leaders to regularly communicate their innovation vision throughout the enterprise, break down internal silos, employ the right assets and methods and optimize their cultural, management and recruiting practices.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

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