Insight

Innovating for growth: how to join the Breakthrough Brigade

By Andy Katz, Frazer Bennett, Hugo Raaijmakers

Oct 24, 2022

How do you create something fundamentally different from what’s gone before – and maximise the growth that comes from it? Our new report finds some answers you might not expect

Breakthrough innovations are products, services and/or modes of delivery that advance in giant leaps, not small steps. Think the Wright Brothers, or Steve Jobs. Lots of organisations are good at incremental innovation. Gradual improvement has its place, and there are plenty of benefits from making small refinements to what you do. Yet breakthrough innovation achieves something more, both for the business, for customers and end users, and for the wider good. It brings growth. It satisfies needs in fundamentally new ways. And it feels different – urgent, inspiring, even thrilling.

Many organisations aspire to create this kind of impact, but only a few succeed. We surveyed more than 500 decision makers and innovation heads at large enterprises worldwide to find out more about what this kind of innovation takes. We found an interesting paradox. While around three-quarters of leaders (74 percent) said the pandemic has made breakthrough innovation more urgent, a similar number (73 percent) still prioritise efficiency and cost reduction over breakthrough innovation. It’s not surprising, but it does point to an opportunity for leaders who are bold enough to think big.

While the majority of organisations struggle to deliver breakthrough innovation, our research uncovered a group who have mastered the approach to breakthrough innovation. This is the Breakthrough Brigade. They achieve greater return on innovation investment and, rather surprisingly, aren’t the small, nimble players you might expect. They're mostly £10 billion+ corporates with 50,000+ employees.

Based on our experience and expertise, and from in-depth conversations with leading breakthrough innovators, we’ve identified five ways that leaders of organisations of all sizes can achieve breakthrough innovation.

What does it take to join the Breakthrough Brigade?

Dare to be a breakthrough growth leader

The drive for breakthrough innovation starts from the top. As a leader, your vision, passion and inspiration will lead the way. Breakthrough growth leaders put their money where their mouth is, too: they invest more in breakthrough than incremental innovation, typically 60/40. And they commit and stay the course.

This echoes the findings of our recent research on leadership, where we saw the difference between revivers and survivors. Leaders at companies that successfully achieve breakthrough innovation are more likely to be revivers. They’re the leaders who prioritise acceleration and transformation, while investing in growth and innovation. Reviver leaders are open to disruptive ways of thinking, new opportunities, and new delivery modes. They accept that new ideas may cannibalise the old, that convention will be challenged, and that breakthrough innovation can feel uncomfortable. These leaders encourage new approaches, give a voice to internal disruptors, and inspire others by showing they’re willing to take the right risks to achieve something new.

Invest in experimentation

With many leaders seeking marginal gains and slight efficiencies, leaders prepared to invest in experimentation will reap the rewards. These are the moments when a greater divide will be carved out between those who back down from innovation, and those who double down.

If you want to innovate, make it easier to get started. Lower the cost with light-touch governance and simple entry points. Successful innovation thrives on psychological safety, which allows for expansive and relaxed thinking. When the stakes go up, adrenaline rises and it’s easier to get thrown off course or make decisions based on cognitive biases. Think minimum viable product, not five-year-plan. And expect to fail – more than once – before you succeed. Any good idea will have some bumps in the road. Keep a steady hand and a cool head, and support your people.

Ready your rebels

Some people are naturally better at breakthrough innovation. They’re able to think long-term, and recognise that change can happen as quickly as it needs to. They’re able to see patterns and also the outliers in those patterns. They don’t just look for new technology but use readily available technology in different ways. These people are your rebels, and chances are they already exist within your organisation. If they don't, review your talent strategy, and recruit beyond "the usual suspects". Are you hiring the people with the right attitude as well as the right skills? Do your people bring new, adjacent, perhaps counter-intuitive thinking?

The best ideas often come from the freshest thinking. Experts can come unstuck because they know – or think they know – too much. They can be biased against potential breakthrough ideas because they prefer ideas that seem feasible in their experience. This means they might overlook breakthroughs that require more work to become reality. So use experts in the right way – working alongside rebels who give a new perspective and challenge the limits of what’s possible. Create cross-functional teams, without hierarchy, with the right balance of freedom and creative constraints. Think too, how partnerships can help you access additional talent, additional skills and additional Insight.

Build an innovation engine

How do you translate good ideas into increased revenue? Innovation that drives major growth calls for an organised approach that connects ideas to revenue and makes the process repeatable. This 'engine' gives you the codified strategy, system, and structure for successful innovation to happen, time and time again.

Many companies create a separate unit or 'skunkworks' to steer their efforts. An independent innovation engine can act faster, ideate and launch pilots more efficiently, and course-correct nimbly to steer clear of the waves that could sink their progress. It can even operate like an independent business incubator, providing startups with seed funding, advice, and other support outside of the main organisation to better manage risk. Yet there's a fine line to tread. If your innovation unit is too separate from the main business, it won’t connect with the core of what you do. This is critical as you seek scale from your new innovation, and to leverage capabilities that sit across the business. So align your innovation unit with your overall business strategy and mission. Start by deciding if an innovation will be developed in house, with a partner, or through an acquisition. From here, define metrics at strategy-level, portfolio-level and project-level to keep a clear view of progress.

Nail the idea, scale the idea

Scaling is the trickiest aspect of breakthrough innovation, and the rush to scale is often a route to fail. Timing is everything, and scaling too quickly can put pressure on a new product or service that just isn’t quite ready yet. The antidote here is to think long-term and go back to what you’re trying to achieve. Choose long-term growth potential over short-term optics, and ensure you're leveraging the full capabilities and potential of your entire organisation.

It's the approach that Airbnb took when starting out and struggling to grow. Rather than focus on scale, CEO Brian Chesky focused on optimising the idea. In the process, they learned what customers craved, and iterated the service. In time, the company’s revenue doubled – and it hasn’t looked back. Smart leaders pay attention to growth potential, not scale potential.

Taken together, these actions make it possible for a company of any size and in any industry to generate, commercialise, and scale ideas that drive significant top-line growth. And it’s these breakthrough ideas that can help us all address today's major challenges, improve lives, and define the future.

About the authors

Andy Katz Strategy and growth expert
Frazer Bennett PA Chief Innovation Officer
Hugo Raaijmakers PA innovation and platforms expert

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