How do constraints drive innovation?
There’s a view that constraints make innovation more difficult – but could it be true that constraints reduce complacency and encourage more creative thinking, and better ideas, while a lack of constraints leads to ‘the path of least resistance?
It’s a commonly held view that without constraints innovation would fly, yet a solid framework can lead to solid, workable and well-thought-through innovation. In discussions around this topic, we often refer to one of the most famous case studies of innovation being created thanks to constraints, that of GE’s Healthcare. They managed to create an ECG that costs less than $1 per scan AND the kit is portable, so it could be transported easily to hard-to-reach communities.
The engineers were given just 9.25% of the regular budget and only 18 months to complete it. In other words, a solid framework within which to work.
What are the barriers to innovation and how can they be used as a framework?
Across industries from financial services to law, transportation and manufacturing the well-versed arguments to change and innovation are often heard…‘the regulators won’t approve’, ‘it doesn’t fit with our strategy’, ‘our people don’t have the capacity to deliver innovation’, ‘there’s no budget’.
In reality, regulators are keen for businesses to provide a culture that delivers solutions for today’s problems and moves away from “profit-is-all’ mentality. Regulators really are there for best-case solutions to be developed.
Continuous innovation (as opposed to a one-off innovation) requires an organisation-wide strategy to get in place the tools, techniques, processes and people that enable and enhance it. That means creating an organisation where there is the capacity for innovation to happen be that budget, time or permission.
But, not all innovation can work within a framework.
The types of innovation for business success
So what type does your business need and which type is the best – radical, differentiated, or incremental? The different types of innovation that a business can use depends on what your business does, where it is today, what your constraints are, and what your culture is like. You may find some types of innovation more befitting than others and different frameworks are needed.
If you are pursuing radical innovation, it’s almost impossible to build a framework or a culture around this. It’s unpredictable and doesn’t always provide reliable results. It’s often done with a very small group to elicit significant results.
Incremental innovation is more reliable and provides continuous fine-tuning to what you’re already delivering. It’s the safest route to go down but, by far, the slowest.
Differentiated innovation provides the most opportunities: you will modify and develop your existing products and services at a faster pace than incremental. Differentiated is customer-focused, of medium pace and the risk is more manageable than a radical strategy.
As a leader within your business, you will want to lead by example, set the standard and point your people in the right direction. Remember, you will always be a few steps ahead of your teams in terms of your thinking, approach and acceptance. It is important to provide direction and clarity in what you’re hoping to achieve.
Google famously focus 70% of their time on incremental, 20% on differentiated, and 10% on radical innovation. But you need to work out what’s going to be the right mix for your business.
How to start with innovation
It doesn’t have to be difficult – sweating the small stuff can lead to innovation. For example, how can your customer service team reduce the average reply time to customers by 15 minutes? Start simple and start small.
Driving innovation within constraints – your ultimate guide
- Measure your innovation maturity using the AIM – An Assessment for Innovation Maturity will help you to understand and enhance your capacity for innovation.
- Decide on your innovation mix – Every business is different with a unique mix of people, products and services, and ways of operating. You may need one or more mixes of innovation. Find out what’s going to suit your business and culture best.
- Equip your leaders – An innovation-led culture is characterised by cross-collaboration between teams, leaders, and employees. You need to bring leaders on the journey and empower them to innovate within their teams.
- Break down silos to ensure collaboration – Drawing on ideas from multiple sources teams can create future-proof solutions. The first step might be to agree on priority areas for innovation.
Embedding cultures of innovation for long-term success
Once you start on your innovation journey and find it’s beneficial to the business, you may want to weave this into the fabric of your culture. But how do you do that when you have constraints?
Financial services business Mortgage Advice Bureau has got it mastered.
We helped them to embed FCA compliance into their behavioural competencies, so that compliant ways of working became second nature to every employee. We then took them through team-based embedding so that every team could work out how FCA compliance would impact their day-to-day working practices and so that they were empowered to take ownership of working in compliant ways.
This meant when it came to innovation, it was easy. Everyone already knew what constraints they were working with, so they could test and learn – safely.
We understand the complexity of creating innovation cultures and enabling growth within the confines of the FCA, and how highly-regulated industries can make it work for them.
Find out more about how we help create innovation cultures within financial services.
Find out more about how we help manufacturers innovate.
