Innovation is one of the key ingredients in the recipe for business success. It’s the driving force behind business growth. It’s the secret weapon in an industry’s evolution and progression.
To be an industry leader and to stand out in saturated markets, creativity is the name of the game. After all, what better way to stand apart from your competition than by offering something no-one else does?
With that in mind, the importance of innovation begins to speak for itself. It’s therefore vital for senior management and employees to understand how to foster a culture of innovation in their business.
Luckily for you, that’s where we come in.
In today’s post, we’re breaking down the process of innovation, step by step. With the right know-how, you’ll be able to begin driving evolution within your own business, inspiring a new wave of novel products, tools and approaches as a result.
Innovation and R&D
Innovation is the beating heart of any R&D project.
Remember: the UK research and development tax credit incentive scheme was established to encourage exactly that. The idea is simple: by offering financial subsidisation for the costs associated with research and development, businesses will be more inclined to pursue it. This leads to more forward-thinking businesses that actively drive their industry forward through new inventions, approaches and efficiencies.
This is why you’ll often hear the term ‘scientific uncertainty’ thrown around when discussing research and development. In the UK government’s R&D eligibility criteria definition guide, it states:
“Scientific or technological uncertainty exists when knowledge of whether something is scientifically possible or technologically feasible, or how to achieve it in practice, is not readily available or deducible by a competent professional working in the field. This includes system uncertainty. Scientific or technological uncertainty will often arise from turning something that has already been established as scientifically feasible into a cost-effective, reliable and
reproducible process, material, device, product or service.”
In layman’s terms, this means eligible R&D projects have one of the following aims:
- To innovate a new product, operation or service
- To innovate a modification to an existing product, operation or service
It’s important to understand that innovation and R&D aren’t synonymous.
Think of R&D as one important aspect of innovation. After all, the clue’s in the name - it’s the process of research and development, working towards achievable innovation.
This is why R&D tax credit eligibility isn’t dependent on the success of your innovation. As long as you can prove that you took the necessary steps to innovate through overcoming ‘scientific uncertainty’, you may still qualify for funding.
How to inspire innovation
If you’re a business owner or team manager, the value of innovation to your company should be clear.
So, how do you inspire, nurture and promote innovative ideas? Figuring this out holds many benefits, as getting this right may open up a range of new research and development avenues for you to explore.
Identify the opportunity
To successfully inspire innovation, you first need to understand how to identify potential opportunities.
To enhance this first step, it’s best to foster a mentality of R&D within your team. Doing this will see your employees become more aware of innovation opportunities, identifying more potential avenues as a result.
When it comes to actively seeking innovation opportunities from the off, there are numerous approaches you can take.
Start with some tried and tested business analysis. Examine what innovative companies are doing to drive their business forward. These should be companies both within and outside of your industry to paint the most detailed picture possible.
When analysing, ask yourself:
- What type of innovation proved successful
- Whether you could replicate this within your own business to create a new market opportunity
Aside from business analysis, never underestimate the power of keeping one ear to the ground when it comes to inspiring innovation.
Remove yourself from the internal bubble and engage with the wider industry, attending webinars and events, reading blogs and publications, and utilising new data and studies. This will help you to identify new industry and customer trends and, in turn, new opportunities for in-demand innovation.
Finally, take the time to identify customer pain points and internal frustrations within your existing processes, products and services.
This is a super-effective way of ensuring that your innovation is purpose-driven and contributing genuine value for both your business and your customers. To do this, consider customer and internal surveying and keep an eye out for recurring trends.
Clarify the problem
Having an idea for innovation is one thing. Proving it’s worthwhile is another.
To inspire purposeful innovation, it’s important to begin by establishing the problem you’re looking to solve.
Inspiration may strike in the mind of any member of your team, but, to properly clarify the problem at hand, you’ll often require the diversity of knowledge on offer across your team.
This highlights the importance of creating a positive environment for innovation. Creative and novel ideas can often be stifled by fear of failure, or restricted by existing processes and targets. Promote an encouraging management style and a culture of innovation to ensure your team is confident in bringing ideas to the table.
When identifying and clarifying the need for your innovation, the most skilled innovators will be sure to address not just the root problem, but also any hidden issues along the way. Techniques such as the ethnographic and repertory grid approach prove particularly useful here in identifying subtle contextual factors.
Of course, when inspiration strikes, it’s important to establish whether the opportunity is, well...an opportunity! This means checking someone else hasn’t beat you to it.
To do this, get into the habit of regularly mapping the landscape to ensure you always have your finger on the pulse. Make note of ‘loud’ and ‘quiet’ areas within your industry - this will help you to highlight innovation gaps in the field and come to better understand the profitability of and demand for any given innovation.
Of course, it also ensures your innovation is fresh and unique. The UK government’s patent search tool can be useful to have at your disposal here. This allows you to carry out intellectual property checks to ensure your ideas are indeed novel.
Search for the solution
Innovation requires a solution. And more often than not, a solution requires collaboration.
This makes fostering a culture of collaboration - particularly one that actively encourages idea contribution and generation - of the utmost importance.
Focus on promoting collaborative creativity in your approach to get this right. Remember: creativity often flourishes when free from fixed patterns of thought, so place an added emphasis on fresh stimuli and connections.
Consider who you’re collaborating with to inspire more regular and purposeful innovation, too. For example, if you have a dedicated in-house R&D team, are they working on a project outside of their core skill set? Would your team benefit from the knowledge and skills of an employee not included in your R&D team?
Be sure to consider external collaboration, too. Providing you’ve taken all of the necessary confidentiality steps where relevant, you could look to work closely with universities, consultancies and the like to broaden your pool of inspiration.
Lastly, never underestimate the power of tried and tested methods. Take TRIZ, for example. This uses logic, data and research for a unique approach to innovative problem-solving - consider implementing the necessary training to utilise this methodology internally. Doing so will see your team bring a new mindset to daily operations - inspiring more innovation as a result.
The secret to building a solid research and development strategy is understanding how to inspire innovation. With the right know-how, you’ll find a team not only well-equipped to devise new ideas, but also primed to put their ideas into action.
If your business has innovation on its agenda, you may be qualifying for R&D tax credits (whether you know it or not!). To find out more about what funding might be available to you, and for some useful advice on how to get started, get in touch with the experts at Lumo today.