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How to grow and innovate to become a successful company, according to an expert

Professor Dr George Day (R)/ Supplied

Innovation and growth are two of the most common problems modern businesses face.

Achieving just one can be hard, nailing both is a challenge, but not impossible.

Dr George Day is a professor at the Wharton School, and one of the world’s leading experts in marketing, strategy and innovation.

Day has done extensive research into innovation and business growth on over 192 top global companies, and found that only one in five are able to innovate to consistent growth.

Through his research he has also found that activities like hackathons are not effective, contrary to popular startup belief.

According to Day there are three common denominators that tie industry leading companies like Google and Lego together: Commitment to talent, an outside-in mindset, and encouraging risk-taking.

Here’s why.

1. Commitment to talent

Leadership commitment to talent development and retention is the single most significant differentiator of growth leaders, average performers and the laggards. Managers must match their innovation rhetoric with personal involvement, and make sustained investments in talent and transformative projects.

There are compelling reasons for the primacy of investments in talent. The sharp differences between growth leaders and laggards in their sustained investments in talent are highlighted by the difficulty growth laggards encounter in getting and keeping talent. For example, Sony used to be an extraordinary company that attracted the best people. When Sony ceded global leadership in consumer electronics to Apple and Samsung it also lost its cachet.

2. An outside-in mindset

Strategic inertia and inside-out thinking are major barriers to innovation. Leading growth companies invest time and resources in looking to the outside for ideas. This often means extracting deep and usable customer insights though discovery interviews, problem identification and metaphor-elicitation methods, and customer experience maps. The systematic use of idea generation and selection methods such as lead-user analysis can help drive an outside-in mindset.

3. Encouraging risk-taking

Many firms are taking cues from the startup and venture capital world and encouraging risk-taking within their business using initiatives such as rapid prototyping, frugal experimentation and implementing lean start-up methodology. For example, General Electric has embraced the ethos of “FastWorks”, and funded over 500 projects that were proposed by employees. Projects are initially funded for 90 days, to develop and test an idea. If the idea doesn’t materialize as hoped, the team learns and carry on. One project is about commercialising a cheaper, cleaner form of solid oxide fuel cells, for converting natural gas to electricity. Unlike the separate and often isolated skunkworks of the past, these experiments are built into the fabric of the business to infuse a risk-taking ethos.

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