When it comes to talking about innovation, defining what it means could be the trickiest part. Is innovation always technology-based? Does an innovation have to be completely new? And does it have to “succeed” in order to be considered an innovation at all?
We’re inclined to define innovation by what it’s not. “It’s not incremental improvement,” says Chamber Chair Mark Fraser, “and it’s not just science and technology. I think innovation is really about recombining existing ingredients to create something that is truly a leap and a breakthrough.”
Kendra MacDonald is a partner in Deloitte Canada’s Atlantic Risk Advisory practice, Chief Audit Executive of Deloitte Global and sits on Deloitte’s National Innovation Council, representing Atlantic. She helps to promote innovation both within the firm and for Deloitte’s clients. To her, innovation means “fresh ideas that create value.”
It’s not just about having that great idea – it’s the willingness to try it and see where it takes you. “Part of that value could be finding out that it doesn’t work, and learning from it,” MacDonald explains. “It’s about process, not just product. Right now, everyone wants to be more innovative. If we don’t have enough discipline around what innovation truly looks like, then we risk not doing what we need to do to get there.”
Innovation scholar, Dr. Claudia De Fuentes, is Assistant Professor in the Faculty of Management, in the Sobey School of Business at Saint Mary’s University. She uses the Organization for Economic Cooperation and Development’s (OECD) definition of innovation. In her words, an innovation is, “the implementation of a new or significantly improved product, including a good or service, process, marketing or organizational method in business practices that is good for humankind and brings economic or social value.”
However you define it, innovation doesn’t just happen. Creating a hospitable environment for innovation to flourish in your organization is critical. A big part of that is learning to define ourselves by how we solve problems and provide value, not by what we do and make. But how do we get there?
Setting the stage
De Fuentes studies the determinants of innovation, to understand why some cities, regions, or countries are better able to capitalize on innovation than others. She points first to company culture, explaining that “managers need to have a fresh vision with a human-centred approach, solving user-centred problems,” and that vision has to permeate the organization. “Employees need to have that curiosity and recognize that they are changing lives, and not just doing a nine-to-five job. They need to have training and support.”
But creating that culture of innovation also means taking risks and having access to financing. Mark Fraser adds: “Any innovation has to have support from the board or the owner that is well defined and worthy of risk. Our membership is 83 per cent small business, and it’s hard to get their heads around acceptable risk in terms of dedicating resources to something that may or may not work. If you’re not used to taking risks, these are new behaviours that can be hard to create.”
The good news is that Halifax is rich in many determinants of innovation, including organizations like CEED, Innovacorp, Digital Nova Scotia, Volta, and COVE (Centre for Ocean Ventures and Entrepreneurship), just to name a few. We also have top-notch university research facilities, entrepreneurship education, and sandbox programs (collaborative spaces hosted by universities and the Nova Scotia Community College that bring together students, mentors, and external advisors to take business and social enterprise concepts from ideation to execution).
In her research, De Fuentes found that in Canada, government policies and programs were also very important to fostering innovation.
“Some of those incentives have to do with tax benefits, others with direct funding, and having a combination of those two is key to benefit all types of firms,” she explains. Other programs, like export support and dynamic and efficient training programs to connect new talent with companies, are also critical.
Having an innovation mindset also matters.
“If we can get past the fear of new technology, we can close skills and productivity gaps in ways we couldn’t before,” says MacDonald. “One of the reasons I became passionate about this in the first place is a worry that we are the first generation of Canadians who are going to leave this country worse off than we got it. So, innovation is a real imperative for the country.”
Curiosity, collaboration, and a tolerance for messing up
Reading or hearing about a company with a successful breakthrough product or service can feel a bit like watching someone else’s perfect life on social media. That beautiful photo might have been the best of 50 shots on a really bad hair day, but you’d never know it.
There is no innovation without experimentation. While it has become somewhat more acceptable in business circles to talk about failure, we still have a long way to go in terms of telling the truth about that one time – or those many times – we messed up.
“When we hear only about successful stories, it’s difficult, because it can be perceived that innovation should be easy,” says Fraser. “Owning failure is such a liberating feeling. If we can normalize failure, we have a much better chance of having a long term and stable culture of innovation.”
Sharing also leads to collaboration and growth. De Fuentes talks about the Nova Scotia wine industry’s development of Tidal Bay, the province’s first wine appellation.
“Tidal Bay wine was an innovation. It had to be developed in conjunction with all the winemakers, and they agreed on the criteria and characteristics. They told me: We build knowledge that will benefit the region and the province. We want to have something good as a collective because we know it will benefit all of us,” says De Fuentes.
MacDonald urges us to ask tough questions about how we can work better together.
“Sometimes we’re thinking about how to compete with each other here, or how to get to the rest of Canada, when we should be thinking about how to work together to reach the rest of the world. Consider the advantages of our geography, including proximity to Europe. Collaboration is something we’re still working to improve,” says MacDonald.
Fraser adds that in business, we traditionally do a pretty poor job of sharing problems.
“So, if we’ve got 50 people and we all have something we’re trying to solve, the speed to solution is significantly faster if everyone knows what I’m working on. Groupthink, even if it’s passive, is so valuable,” says Fraser.
Falling in love with the problem, not the idea
Let’s bring innovation back to its core definition. We’re talking breakthroughs, we’re talking risk, but most of all, we’re talking value. Does your product, service, good, or process bring value to people?
Most of us have fallen in love with a great idea, only to discover that it doesn’t look so great to other people.
“It might be nice that you have this collection of services or products that are organized this way, and it might be beautiful in your mind,” says Fraser. “But your customer doesn’t care. They care about the problem you’re going to solve.”
A human-centred approach is at the heart of all innovation. De Fuentes explains that when you buy a cell phone, for example, you don’t really care about a complex patent or how all the circuits work together. You’re buying a tool to communicate with family and friends and surf the Internet.
“You don’t care what companies did to make it – you care about having your problem solved,” says De Fuentes. “When I teach, I tell students, you have to talk to people and identify the problem to be solved. Instead of getting so excited about your idea, get excited about the problem. Nobody’s going to buy your product or service if it’s not connecting with the actual problem they have.”
Kendra MacDonald agrees. “Human-centred design and customer experience are key, and better analytics support a more tailored approach.”
The art of innovation means organizations must make the transition from a product- and service-based position to a value-based position. “We need to make sure we’re solving the right problem and communicating the value to the customer in a language they can understand,” says Fraser.
Accentuate the positive
Setting the organizational conditions for innovation to thrive requires a big picture view and a change in priorities. Halifax has the ingredients – the supports are there and the culture is shifting – but time is of the essence.
MacDonald, De Fuentes, and Fraser all agree: we need to be more responsive and dynamic, and more willing to take risks for both the individual and common good. We also need to do a better job of solving real problems, using proven human-centred methods.
And then we have to talk about how we did it, whether we succeed or fail.
“One of the advantages that Atlantic Canada has is that we tell a good story,” says MacDonald. “What is your story about, how you’re changing lives and minds, and how are people using your product? How do you talk about your product or service in a way that focuses on how it impacts people? How do you focus on the outcome it’s going to achieve and not the specifications? It’s not just what you can get people to buy; it’s caring about the individual.”
Creating the right environment for innovation in your organization is in itself a breakthrough.
“Set the conditions and the innovation will follow,” says Fraser. “Let the process and the people you believe in uncover the possibilities.”