Executive Insights: Innovating for Business Success

Innovation, at its core, is about creating an environment where creativity is encouraged, resourced, and rewarded. We saw that point illustrated in the news recently.

IBM, a few weeks ago, announced that remote working will end for its 2,600-strong US marketing team, and employees will have to move into one of its offices in six US cities or bid their goodbyes. The IT behemoth has already co-located several departments, and will continue to do the same for more departments in the months ahead.

Why did IBM, a remote working pioneer that embraced that approach across a large swath of its workforce for decades, decide to change tack?

John Sullivan, a Management/HR professor at San Francisco State University, offered a clue: the value of innovation linked to co-located working is so strong that it trumps any productivity gain provided by remote working.

“Remote work was a great strategy for the 90s and the 80s, but not for (now),” he told Quartz, an online business portal. He believes that working together physically is one key to innovation.

That’s an interesting viewpoint that gels with studies suggesting that team proximity helps foster better new ideas. One Harvard study, for instance, found that researchers who worked in close physical proximity produced more impactful papers. Another report revealed that staff who have more encounters and unplanned interactions perform better (“the water cooler effect.”)

Professor Sullivan and the Harvard researchers’ views mirror mine. Fortinet’s R&D centres are concentrated in a few cities globally – including Sunnyvale, Vancouver, Ottawa, Sophia Antipolis, Bangalore, Singapore, and Taiwan − so that we can benefit from a critical mass of researchers coming together under one roof.

There are, of course, other elements that can help foster a more effective technology innovation environment.

If you look at the tech industry over the past few decades, there isn’t one clearly defined route to good innovation.

Some companies devote their innovation efforts to their core areas of technology, and find tremendous success. Others work on ideas that initially seem far off from their core business, but likewise have been richly rewarded. Firms like Amazon − which has evolved its business from book-selling to IT services delivered through AWS − and Google − which started off building search engines but today has a hand in fields as diverse as satellite mapping, virtual reality, and driverless cars – fall into the latter category.

There are also different models of innovation:

1. Top-down – where fresh, big ideas come from product architects or company leadership, and all the engineers rally around those ideas to turn them into reality.
2. Bottom-up – where engineers carrying out specific projects are encouraged to think up innovative ideas and make them work, sometimes to the extent of ignoring the broader design. Bottom-up ideas can also come from end-customers’ requests for specific solutions or features required to tackle their unique problems.
3. Diverging mode – some companies focus on developing their own tools to solve internal problems, and gradually grow those tools into solutions they can market.
4. Any combination of above.

Organizations have tasted success with each of these four models. While there isn’t one that is clearly superior to the others, there is probably one that fits your company culture and team management style better.

On a day-to-day level, the key is to encourage employees to get passionate about their field of work, constantly think, and challenge paradigms. It is also important to recognize and reward employees’ innovation efforts. At Fortinet, for example, we hold our engineers in high esteem, and publicly commend their innovation and patent-filing efforts at our quarterly all-hands meetings.

Company leaders must have the fortitude to take a long-term view of their business, while coping with Wall Street’s pressures to deliver on the next quarter. If management starts to project how things will evolve over the next several years, decades, or even the more distant future, they willbe motivated to invest in areas that will truly help the company grow over the long haul. Such investment will also spur big innovation ideas that can deliver huge and unexpected returns in the future.

Good technology innovation can take many forms, and come from any direction. That’s why it’s important not to structure innovation too much. Put in place nothing more than a basic framework. If chief innovation officers set up too many boundaries around employees’ ideas, they can destroy the very thing they are looking for. Be flexible, and always keep an open mind. When someone shares a new idea, have the patience to let him/her finish before passing judgement.

Over the years, I have seen technological innovations fail to take off because the innovator did not start with a clear goal in mind. It is often tempting to work on a tool for the intrigue of it, but if you begin the exercise without a distinct idea of what problem that tool, when eventually developed, will solve, you are likely to be squandering your time and resources. Innovators must pinpoint the business problem before anything else.

Finally, chief innovation officers must bear in mind that the ultimate goal of any business is to turn a profit, so they shouldn’t innovate just for innovation’s sake. Aligning technological innovations to the organization’s vision and business goals is vital. All innovations must have their contribution to the bottom line measured. It’s not enough − in fact, it’s hazardous to the business − to simply create a “good ideas factory” without a pragmatic view as to how the company will eventually benefit from all its R&D efforts.

Business leadership must ensure that their firm’s R&D activities are tightly integrated into its overall strategy and operations. Then the company’s healthy long-term growth and market reputation can be the ultimate judge of its innovation successes.