How to success in Open Innovation: Five Steps to success

Innovations are not so many ideas as their implementation. Companies successfully generate them, but do not cope with the implementation - more than half of the planned innovations remain unrealized. Oleg Zhukov, Vice President of Oracle in Bangladesh and the CIS, tells how to fix this. Those who invest more in innovation grow faster. According to Oracle's How to Succeed in Innovation research, 79 to 85% of fast and very fast-growing companies invest in disruptive technologies. To figure out how to avoid disappointment in the path of innovation and increase the effectiveness of ideas, Oracle interviewed 5.5 thousand top managers from 24 countries, including Bangladesh. Here are five practical tips.

1. To Focus on priority projects

There is no implementation, there is no development, but an excess of projects can become an obstacle to innovation. A third of respondents admit that their companies do not have enough resources to complete all undertakings, which is why implementation suffers - quantity does not translate into quality. What is the main innovation? This problem is most acute for fast-growing companies: 38% of them cannot cope with many initiatives. A small number or even a complete absence of innovative projects is typical for companies whose business is starting to sag - in an attempt to save money, they cut the cost of innovation when in reality they are most needed. But that will only delay the inevitable.

 With a sharp deterioration in business, companies begin to frantically invest in innovation in an attempt to restore their position in the market. But in fact, it is worth highlighting the most priority projects and implementing them. 

2. Appoint a leader and empower

All business units are confident in their importance in the implementation of innovations, but this role is not necessarily recognized by other departments and corresponds to the actual state of affairs. Who should be in charge of innovation? The real responsibility for the innovation direction usually rests with top management and IT, as indicated by about half of the respondents, and less often with functional units, although they are the beneficiaries. Marketing, which spends more on IT than any other business unit, has the least control over innovation. The HR department, which depends on attracting talent and creating a culture that promotes the spread of the best ideas, is also rarely the owner of innovative projects. As a result, insufficient control on the part of the main stakeholder - business - along with the blurring of responsibility slows down the implementation of projects. The availability of cloud solutions allows functional leaders to take the initiative and take full responsibility for themselves. For example, in Google, the financial unit deployed the Oracle cloud budgeting system in five months with minimal involvement of IT specialists - one architect-developer.

3. Line up the processes

Despite the interest in innovation, processes to support innovation have not yet been implemented in many organizations. Without well-established processes, innovative ideas cannot be quickly tested, effectively scaled up and fully integrated into everyday practice. 22% of respondents point to the lack of built-in processes as an obstacle to innovation efforts, the same number complains about the lack of a strategic vision - what innovations will give in the future. The lack of well-established processes, a clear strategy, and support from management becomes a serious barrier in very large companies, as well as in companies in crisis. The former are often too bureaucratic, while the latter often find themselves in a crisis precisely because of the inefficiency of internal processes, and their problems with the introduction of innovations look natural.

Ultimately, all supporting processes are important for success - incubation teams for generating ideas, agile development methodology, internal social channels, a corporate-wide innovation program, and more.

4. Add customer experience to Product list

The demand for innovation is increasingly coming from customers, and companies are listening more closely to deliver a positive customer experience. As a result, new models are increasingly being used to drive growth, with a focus on renewal, loyalty, and customer retention. For example, in the hotel chain Melia Hotel, there is no need for a resort guest to take money and keys with them - they are replaced by a “smart bracelet”. With it, you can make purchases and pay for services not only on the territory of the complex but also in nearby restaurants and shops. Thanks to the bracelet, the hotel knows where the guest is, which increases the level of security. And the planned inclusion of AI will increase the personalization of offers. This project started with the idea to improve the customer experience, make it seamless, and as a result changed the approach to wearable devices in the hospitality industry. How to evaluate innovation? While traditional performance and revenue are still key metrics for evaluating investments, customer experience is increasingly used (57% of companies) as a measure of return on investment (ROI). This is undoubtedly a positive trend, as long as it does not forget about employees - they must be treated as internal customers if the company wants to increase their productivity.

5.  Foster a culture of innovation

The most important factor in any innovation program has always been and always will be employees. They are the ones who come up with new ideas to solve real problems and bring them to life. However, to engage them effectively, and enable a culture of innovation is needed. Meanwhile, only 41% of respondents believe that the adopted corporate culture promotes innovation. Many companies provide various financial and non-financial incentives for employees to encourage the generation of new ideas. These are usually financial rewards. But incentives are just one element of a culture of innovation.

For example, one of the Eastern Asian banks became profitable for the first time in many years after employees in it began to pay half a monthly salary for a realized idea. However, without the established system for selecting and implementing ideas, it is unlikely that any of the employees could count on a bonus, or the bank could increase the efficiency of its operations. All ideas are carefully studied, the best ones are sent for approval to the management and implemented by the project team. During the year, 50 proposals for process improvement were selected, 12 of them were implemented.

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