After several years of working with executives in large corporations to help them innovate, a distinction has emerged that has really helped some of the teams get on the same page.
Innovative thinking vs. innovation. These might sound the same, but they are different. Both are very important for companies to remain relevant and successful for years into the future. However, one is pointed inward, and the other is pointed outward.
Innovative thinking means that your teams are applying the principles of creativity, collaboration, problem-solving, risk-taking and customer focus to the business problems of today, including your current products, services and operating models. Some great applications of innovative thinking fall under the headers of improving customer experience, moving the needle on key business metrics such as sales, market share, retention or expense ratios, or even improving field satisfaction. These are important, daily challenges that deserve innovative thinking to come up with new ways to solve them, perhaps working within certain constraints. Constraints help actually drive innovative thinking, versus curtail it.
Many companies today have problems with innovative thinking because the organizations are not skilled in creative problem-solving, they don’t collaborate well and/or they don’t know how to take calculated risks. These problems are solvable through the proper skill training and by providing the right data to help make decisions about what to focus on first, and how much effort and money can be spent to solve it.
Innovative thinking is an empowering competency for generating good business results. It needs to also be accompanied by innovation for long-term survival and relevance.
Innovation, on the other hand, takes those same skills and points them toward unmet consumer needs. These could be consumers and/or needs you are not serving today. Additionally and ideally, they could be needs that are not being served by anyone. When we discover large, unmet needs in the marketplace, these are significant opportunities for growth. However, it’s difficult because a capability needs to be built that has not been built yet.
We define innovation as the synchronized intersection between an unmet need, an idea that solves it, and a great experience designed to bring it to market effectively. Innovation has all three of those elements correct. If one or more is incorrect, it’s just an invention.
Innovation is even more difficult than innovative thinking because teams are dealing with unknowns in the market as well as unknowns in the business. With innovative thinking, at least some things are familiar. This is why large corporations have such trouble launching game-changing ideas.
The missing skillsets relative to innovation could be any of the same ones required for innovative thinking but also the skillsets of prototyping and effective piloting. These are skills the insurance industry generally doesn’t have.