The innovation playbook

Editor Jennifer Horn on how slow-moving laggards can set the pace to become a leader in disruption.

final_20 2This column originally appeared in the October 2019 issue of strategy.

It was Isaac Newton who famously said, “If I have seen further, it is only by standing on the shoulders of giants.” His thinking was that the discoveries of past pioneers could hoist others to new heights. While watching the industry grapple with innovation, I start to appreciate the late-scientist’s metaphor for progress a little more.

Most, if not all, marketers agree they need to embrace digital transformation and are thus spending more on innovation (it now makes up 1 in 6 marketing dollars, according to Gartner’s CMO Spend Survey for 2018-2019). But many are still looking for clues on how to make sense of it all. They have the best intentions, but their capabilities just don’t match up. In fact, Gartner found that marketers rate their “innovation maturity” at a lowly 2.2 out of 5 (even though they’re shooting for a 4.3).

There’s an innovation arms race underway and some companies are falling behind, in part, because they lack the vision and strategies to execute.

The Imperial College Business School, in collaboration with Ericsson Research, found that “leaders” and “laggards” are two types of companies, with very different mindsets, but which both accept that digital transformation is a must-do, not a nice-to-do.

Laggards, on the one hand, tend to use tech to improve whatever they’re already doing – instead of preparing for an incoming tidal wave of startups, according to Imperial. Those slower-moving companies believe a focus on communication and collaboration within teams is their ticket to innovation.

But the researchers say, in order to set the pace and be a leader, companies should follow this playbook: one, lose the hierarchy and organize teams to be autonomous and agile (that’s how you inspire innovation); two, bring all types of tech systems together to be more efficient (that’s how you create room for innovation); and three, use digital to explore new market opportunities (that’s how you survive through innovation).

L’Oréal, Telus and RBC follow these rules, almost to a tee. From converging teams so that experiments can be coordinated at L’Oreal, to RBC investing in tech to change – not just improve – how it does business, to Telus venturing into new competitive territories (like healthcare).

Strategy’s Josh Kolm found the thread that makes these three early adopters succeed, and offers clues for laggards to find ways to become their own kind of trailblazer in the October issue’s Innovation Roadmap feature.

But it’s not just about the organizations that have led the way in stepping up the tech stack. Our most recent issue is filled with leaders at companies setting the pace in all sorts of ways.

Our six ambitious Brands of the Year have also shown leadership on things like data (Loblaw and Ecobee), sustainability (Frank And Oak), diversity (MEC), ecommerce (Ritual) and partnerships (OVO) – so there’s a giant for every marketer to stand tall and see a little further. Perhaps the higher elevation will prepare your brand to shoulder whatever disruption comes next.