An innovation mindset can best be described as a set of attitudes, interests, inclinations, and cultures that first acknowledge and then prioritize the role of innovation in a company’s development and success. An innovation mindset is one that prioritizes new products, processes, or business models to create added value for employees and customers.
Companies with an innovation mindset consist of employees who have honed their creative ideation skills in the pursuit of viable, innovative ideas.
These companies continually explore new trends, opportunities, or areas for improvement.
They are also passionate about innovation itself and are comfortable with risk.
How can an innovation mindset be encouraged?
The adoption of an innovation mindset can be encouraged with various best practices under three best practices.
Innovate, not just invent
To build market share, become a fast follower.
Start with small, incremental changes to marketing and process methods.
Alternatively, consider a broader change to the business model.
Look toward the future
Don’t wait until the ship has sailed. Seek to understand future trends and profit from them before the competition.
Pursue blue-sky opportunities.
Start a conversation
Internally, identify employee capabilities and remove siloed communication.
Externally, liaise with industry players to bring new ideas into the company.
Meet with customers and suppliers in environments conducive to honest feedback.
Speak with research institutions to increase knowledge and deepen understanding.
Qualities of an innovation mindset
Here are some of the qualities that define an innovation mindset. Note that these apply to both the individual and the organization.
Be open to change
Businesses must embrace the idea that industries are in a constant state of flux. Being open to change also requires an awareness of where these industries are heading.
What are the trends? And what are the risks or market forces that could overthrow the company’s business model?
Embrace the creative aspect
There can be no innovative mindset without creativity. Innovators believe that creativity is the solution to a problem, which means they rely on design thinking and not on the traditional scientific method.
With that said, there is room for structure, process, and method in innovation. It is just that the innovation mindset stresses the importance of creativity as the starting point.
Think big
While innovation is somewhat difficult to define precisely, most academics and skilled innovators note that it involves more than just incremental improvements.
Innovative organizations dare to think beyond the current norms or market status quo. They possess the winning combination of analytical skills, entrepreneurial enthusiasm, and the ability to dream.
Act fast
In the twentieth century, it took around 8 years for an automotive company to invent, design, and launch a new vehicle model.
This century, however, the industry (and most others) are transforming at a rapid rate due to disruptive business models and new technology.
Since eight years from concept to launch is no longer viable, companies must be characterized by speed of thought and action to keep up with external change.
Key takeaways:
An innovation mindset is one that prioritizes new products, processes, or business models to create added value for employees and customers.
The adoption of an innovation mindset can be encouraged with various best practices. These include the choice of innovation over invention, the early identification of profitable trends, and the ability to converse with internal and external stakeholders.
Some of the qualities that define an innovation mindset include being open to change, thinking big, acting fast, and embracing creativity.
Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.
The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.
According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).
That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.
Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.
In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.
Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.
Sociologist E.M Rogers developed the Diffusion of Innovation Theory in 1962 with the premise that with enough time, tech products are adopted by wider society as a whole. People adopting those technologies are divided according to their psychologic profiles in five groups: innovators, early adopters, early majority, late majority, and laggards.
In the TED talk entitled “creative problem-solving in the face of extreme limits” Navi Radjou defined frugal innovation as “the ability to create more economic and social value using fewer resources. Frugal innovation is not about making do; it’s about making things better.” Indian people call it Jugaad, a Hindi word that means finding inexpensive solutions based on existing scarce resources to solve problems smartly.
A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).
An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.
Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
