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The fundamental role of innovation in times of change

Marcelo Cruzato/Suzana Domingues/Charles Beck - Sócios DMS Partners

The maxim that crises generate opportunities and that the solution can come from innovation is, more than ever, a true statement. According to consultancy McKinsey, history shows that companies that invested in innovation during times of crisis outperformed their peers during recovery. Innovation is the engine to rescue companies from the sea of storms and cost competition that seem to be constant in times of low economy.

There is clear tension among business leaders in choosing the most appropriate path to lead the company in this post-pandemic moment, when business sustainability takes precedence over investments in innovation. This dilemma is not new, it always resurfaces in crises. Including because crises are cyclical. Therefore, innovation has the vocation of building the capacity to react to them.

So, do we agree that innovation is fundamental to the success and longevity of businesses? If innovation plays a central role, why do more than 90% of initiatives still fail? How can we, leaders, increase the chances of success and better navigate this moment we live in - with scarce resources, uncertainty and the need to be more assertive?

First, let's level our understanding of innovation. What is innovative? There are many interpretations on the topic, which include "creating new things", opening new territories, developing more relevant products and services, being the first, bringing value, being digital and so on... All these definitions apply, in greater or lesser intensity, depending on the segment, profile and ambition of the company

However, innovating does not necessarily mean finding something completely new for the world, and it does not need to be linked to technology and digital. Nor is it limited to the launch of a new flavor or a new color for the product packaging.

Innovation can and should be applied in different sectors and must be sought comprehensively within the company, from small modifications to more “disruptive” paths. There is room for improving processes, reducing production costs, agility in delivery, new customer relationships, the implementation of intelligent systems, new products, new business models, the list is long...

Therefore, being innovative is about seeking ways to gain competitive advantage, it is about questioning the business model and purpose, it is about making curiosity contribute to the evolution of the model, it is taking risks to grow, it is compensating for market dynamics and invest in people.

Innovation management

However, to innovate you need management to orchestrate a set of initiatives, which when combined, bring a positive impact and value to people, the business and the environment. And logically, this only happens when there is a deep understanding of the market with a view to the future and a well-defined strategy. In other words, innovating requires a systemic view of the business to prioritize initiatives that will impact both the company's internal configuration (its business model, network of relationships, processes, logistics, for example), and those that seek to improve the customer experience. (for innovations in products, services, and brand building). This way of thinking and discipline with innovation is in line with the work of Larry Keeley, an American strategist who studies innovation (recommended reading below).

And how to be successful with innovation? There is no simple answer and off-the-shelf projects. The journey will certainly involve reflection on the future, leadership ambitions, the current structure, its collaborative forms and culture. We always reinforce that the important thing is to take the first step, even if it is small and, from the first “quick wins”, expand the scope. The path forward requires long-term focus and commitment.

Bringing innovation to the center of strategy is a challenge that DMS Transforma partners face in their executive careers as former CEOs, VPs and Directors of large organizations, or acting as Heads and mentors of startups. The balance of the traditional with the new, of entrepreneurship and vivid experiences has been a great value delivered to partners and customers from the most diverse segments and brochures in support of their innovation journey, bringing the perspective of company forums to instigate and promote reflection for a change.

What stage of innovation are you and your organization at?

I don't know where to start and how to introduce innovation

I want to innovate, but I have difficulties because the structure is scarce

I have already started the innovation process, even though it is still at an early stage, but still without efficient management and without continuity

Innovation is part of my organization, we have efficient processes

We propose to look at Innovation and challenges from a new perspective, and we support companies at any stage of maturity, with the right timing and measure for each organization (Organic and Evolutionary Management;

DMS Transforma @ Marcelo Cruzato; @Charles Beck Varani; @Suzana Domingues

(1) Fonte: Livro Ten types of innovation – Larry Keeley, Ryan Pikel, Brian Quinn

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