Purpose and intent Culture Leadership Process IP Strategy Skills and resources Decision making & governance Market testing Organisational structure Finance

Purpose and intent

The aim of the innovation and how it will benefit to the organisation

Successful innovation needs a clear understanding of a company’s current position, a clear view of what needs to be achieved and a robust understanding of why. Once this is in place, a business can align initiatives with the strategic direction and broader goals of the organisation; taking into consideration the competitive market environment and the business operations.

What should you do?

Identify, and publicise within the team, the purpose and intent of your innovation. Then remind yourself, throughout the innovation cycle, what challenge you are seeking to address, to ensure you are still focused on the original purpose and intent.

Culture

How to create an innovative culture within a company

Creating a culture within which innovation can thrive is crucial to success. In such a culture, employees and other stakeholders believe that their ideas are genuinely valued, trust it is safe to articulate those ideas and are able to influence risk management and decision making. Bureaucratic, hierarchical, and fearful environments hinder innovation. 

What should you do?

Cultural change has to be gradual and led – but not run - from the top. External advice can often be valuable. Internal statements about the innovative intentions of a business must be relentlessly supported by the business’ leaders through their everyday communication and behaviour.

Leadership

How innovation can be led and championed within an organisation

Innovation does not have to be led from the top down but leadership does need to foster an environment in which it can thrive. Senior management needs to make innovation part of their goal and make time to ensure its promotion across the business. They need to link it to the core company strategy and ensure middle management is engaged; reflecting the mission to their teams. 

What should you do?

Be clear about leadership responsibilities and publically emphasise the value of innovation to the business – don’t let it be perceived as lower value than “Business As Usual”. Link the objectives of the innovation leader(s) to the objectives of your business and celebrate the achievement of those objectives. Innovation leadership doesn’t necessarily have to be the preserve of the CEO.

Process

How to approach innovation in a structured fashion

Innovation should be treated as a process. Organisations that embark upon innovation in a structured fashion tend to see the most success. Commercialisation and delivery should be key parts of the process. Operating within a pre-planned and deliberate process offers the best capacity to turn an idea into a successful service, product or venture. 

What should you do?

Create, and recognise the importance of, an innovation process. Include progress review points, decision making points, KPI measurement and reporting. Aim to achieve that balance between too little structure (chaos) and too much structure (paralysis). 

IP Strategy

Making sure your IP strategy is aligned to the purpose and intent of your innovation project

Intellectual Property (“IP”), if properly understood and protected, is an asset; an asset that adds value. Moreover, IP which is properly registered can offer more immediate and tangible benefits by way of tax relief on income from patented inventions. Of course, the importance

of an IP strategy varies according to the business type. Whatever the strategy, a clear understanding of why, what and how is critical in respect of IP.

What should you do?

Your IP strategy will be informed by your primary “Purpose and Intent” – be clear about whether you are seeking to build capital value in your IP or whether you are seeking to answer a different challenge and are content to share the IP in order to maximise the speed or chances of success.

Skills and resources

How to ensure your people have the time and skills necessary to nurture an innovative culture

Having the right people, the right skills and an appropriate amount of financial or technical resource can be critical to certain innovation strategies. Innovation is not just siloed within an R&D department or a defined “Innovation Team” – it needs to be inherent across all business processes and functions.

What should you do?

Easy to spot, not always easy to address. Ensure that as a team they are empowered (and if necessary required) to dedicate time to both innovation and their day-to-day roles.

Decision making & governance

How to ensure the right opportunities are pursued and the wrong ones shelved

An internal decision making and governance structure is vital for success. There can be a tendency for innovative ideas to gain their own momentum and a governance structure is required to continue the process of scrutiny and challenge. As innovation progresses it will pass through decision points. A structure that is in place to support continual innovation is invaluable to the credibility of innovation within an organisation.

What should you do?

This is about managing your risk. Build decision making points into your innovation process to confirm (or deny) continued progress. Counter “optimism bias” by including independence to the decision making process.

Market testing

How to ensure there is market demand and how to ensure the demand stays

It is important to keep abreast of the end market at all times and ensure the attributes innovation projects address a challenge that has been identified by the market. Also, a good idea of future market trends is also valuable if a big, disruptive innovative step is anticipated.

What should you do?

Check throughout your innovation cycle that you are still answering the right challenge and that the challenge hasn’t already been answered or been replaced with a fresh one. Don’t assume the market will love your innovation and, crucially, be willing to pay for it.

Organisational structure

How to ensure responsibility for innovation is correctly aligned throughout the organisation

The most successful innovators deploy a system or approach that marries up resource and accountability. KPIs must not prioritise the wrong behaviours and organisational structures should be created to foster innovation. If an organisational structure does not foster a culture of innovation, then no amount of effort will produce the innovative outcomes set by the management team.

What should you do?

Consider who will be part of your innovation team; do you have them already in the business or do you need to recruit? Is innovation to be the role of everyone in the business or is it the remit of a special project team outside the “Performance Engine” of the business? How will you capture the activity of the innovation team and publicise and celebrate it? There is no single correct answer: the context of your business and purpose and intent will inform your conclusions.

Finance

How to get the funding required and deliver the necessary returns 

Access to finance is a key requirement to forward an innovative strategy for many organisations. Many turn to banks, others look towards their own balance sheets whereas some seek help from external investors. Whilst finance itself is needed for innovation, often the process of sourcing finance needs an innovative approach in itself: consider crowdfunding, angel investment or organisations such as the Business Growth Fund to source finance.

What should you do?

Plan ahead – emergency finance is expensive. Examine the tax opportunities such as R&D tax credits and Patent Box. An organisation such as BDO can also help to source the most relevant method of finance for a business.
Click on each element of the BDO Innovation Model to read more and view our video on how to embed innovation in your business CONTINUE

Whilst businesses across all sectors have been working hard to navigate the financial uncertainties of recent times, many are now looking towards growth and are actively prioritizing innovation as a way to differentiate themselves in the face of competitors. 

Midsized companies are amongst those that have the potential to be the most innovative: small enough to be adaptable to change and large enough to have the capability and resource to pursue innovation projects. 

BDO and the CBI, met a range of midsized companies at a series of 'M-Club' workshops across the UK to hear from business leaders themselves about the challenges and obstacles they face when it comes to embedding innovation and deriving a commercial benefit. Using these discussions as a base, we constructed the BDO Innovation Model which is intended to provide a blueprint for delivering successful innovation within an organisation.

M-CLUB FINDINGS

BDO delivered a series of 'M-Club' workshops throughout the UK to better understand what innovation means to midsized businesses, how they are approaching it and the learnings that can be taken to help others to develop a strategy. M-Clubs were established by the CBI to enable MSBs in to discuss topics pertinent to their business and meet and network with other local MSBs.

Find out more about the M-Clubs.