From innovation to corporate success: The UK’s battle to turn ideas into big business
Ian McAnearney, head of early stage companies and renewables at Tyzack Partners, asks why, as one of the world’s most innovative nations, the UK isn’t better at marketing and selling those ideas.
The recent Global Innovation Index 2013 (GII) produced by INSEAD-WIPO-Cornell University, ranking 142 countries on their innovation capabilities, makes for interesting reading.
Co-author Bruno Lanvin claims that, to be successful, there are three main pillars of innovation at the national level. These are an emphasis on innovation at the education level which creates and nurtures talents for innovation, nurturing a culture of venture and risk capital around innovation, and the building of strong and dynamic structures of innovation. The authors also suggest that innovation success leads to a virtuous circle, where investment attracts further investment, as well as talent and innovation.
That’s the position at the national level, but what about from the corporate position? Are we to expect that the corporate world is a mirror image of the national? In the UK, for example, we have an enviable record for innovation. The electric motor, the telephone, the computer and the portable music player, to name just a few, were British inventions.
Maybe that’s why the GII has the UK ranked at number three, ahead of the USA at number five. However, despite our success, we trail the US and others when it comes to exploiting this advantage at the corporate level. What are other business cultures doing right that we in the UK are struggling to get right?
Hal Gregersen, professor of innovation and leadership at INSEAD, writes there are three elements to achieving corporate innovation success; the people in the company, their philosophies, and the processes they have. Fairly obvious, perhaps, but crucially he adds that the real innovators not only think differently from other people, but they also behave differently. Apple’s (the late) Steve Jobs and Tesla Motors’ Elon Musk spring to mind.
We have very talented people in UK companies (both start-ups and well-developed companies) who can develop world-beating products and services. However, their developments are only of commercial significance once they understand how to transition their platform technologies through to commercially successful products, and how to manage that transition. This is where we tend to struggle.
If we take a look at really successful innovators, there are a number of things that make them stand out. First, they go out of their way to truly understand their target audiences and the markets they operate in. Second, they do a lot of experimenting, they’re not risk-averse and will happily partner with others to get it right.
But what really sets them apart from the others is that they envelope their new products and services within ecosystems that are designed specifically to support their developments. These ecosystems are elaborate commercial networks that connect physical groups in a relationship that ensures sustainable efficiency, marketability and profitability. They enable businesses to grow in a multidimensional way, not just sequentially.
Inventing new products and services might be important but there are hugely successful organisations that have invented little, if anything. Take Apple, for example. This company didn’t create the first personal computer, the mobile phone, the digital audio player or the tablet computer. Yet they have built one of the most successful global companies around these products. How did they achieve this? The company excels at taking products that may have existed for years, re-designing them to suit their customers, and wrapping them up within an ecosystem that fully supports and encourages the growth of each product. This ecosystem not only contains products and product bundles (for example the iPhone with iTunes, apps etc), it also contains a support structure that is widely regarded as probably the best in the world.
Creating successful ecosystems, particularly for early stage businesses, takes not just intellect and energy, but experience and vision too. Senior executive and non-executive board members need to understand the mechanics of creating ecosystems that support their innovations and be able to optimise their business accordingly. They must also have the courage and appetite to experiment and to take risks.