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Why Businesses Need an Innovation Operating System

“2020” spelled out with a bright light bulb

Innovation is critical in times of crisis. Why? Because companies that prioritize innovation during these times will drive growth after this crisis.

According to McKinsey, “More than 90 percent of executives said they expect the fallout from COVID-19 to fundamentally change the way they do business over the next five years, with almost as many asserting that the crisis will have a lasting impact on their customers’ needs.”

But even companies that double down on their innovation efforts today struggle to make innovation a part of their everyday operations. For some, innovation is lightning in a bottle or a one-off success that proves difficult to repeat.

Innovating with consistency requires a holistic approach — one that includes changing mindsets as well as how people work together. In short, companies need to establish an innovation operating system.

Fortunately, some industry leaders have made a sustained effort to innovate year after year, and they can teach us some lessons. Here are three:

     1Create a hybrid space

Successful companies have figured out how to create a hybrid space for innovation, meaning a combination of physical and virtual environments.

A physical space can provide a facility to test ideas that require a brick-and-mortar location to succeed such as Walmart’s incubation arm, Store No. 8. Here, Walmart tests robotics, virtual and augmented reality, machine learning, artificial intelligence and other technologies in a retail environment.

“Even companies that double down on their innovation efforts today struggle to make innovation a part of their everyday operations. For some, innovation is lightning in a bottle or a one-off success that proves difficult to repeat.”

But in an era of social distancing, businesses also need virtual tools to foster innovation. Fortunately, many have emerged in 2020 to make it possible for people to innovate together. The key is to stitch together the right tools at the right stage of innovation, from initial ideation to ongoing collaboration.

     2. Embrace an ecosystem mindset

Innovation doesn’t happen in vacuum. Innovators open up their businesses to outside thinking. In fact, they encourage outsiders to collaborate.

It’s one of the most effective ways to prevent your organization from become mired in your old ways of doing things. Netflix, for example, innovates time and again through an interlocking ecosystem of content creators and technology partners to come up with its vaunted personalization and on-demand features. We call these relationships experience ecosystems.

The Chicago Connectory is another example of an ecosystem. The Connectory creates both a physical and virtual space for large and small companies to create innovative experiences around Internet of Things technology, Industry 4.0, mobility, smart cities and connected construction.

Moonshot participates by hosting monthly workshops on how large and small businesses can co-create with design sprints. Our involvement in the Connectory is to help provide the connective tissue between startups, enterprises, academia and the private sector with an emphasis enabling people to adopt a new way of working.

“Innovation doesn’t happen in vacuum. Innovators open up their businesses to outside thinking. In fact, they encourage outsiders to collaborate.”

     3. Place bets

Big companies can not only nurture startups by tapping into ecosystems but also invest in them to build out their innovation portfolio.

Gordon Food Service invests in various startups such as Square Roots to make promising ideas more scalable and valuable. The key to Gordon Food Service’s approach is to organize and manage its investments with operational excellence.

The company does not “invest on the side.” Rather, it does so through a unit known as Relish Works.

Relish Works provides both seed money and expertise to startups. In return, Gordon Food Service literally gets a stake in innovation — not only financially but intellectually.

As Relish Works startups grow, Gordon Food Service fast tracks the innovation process for itself. Furthermore, Relish Works emphasizes the importance in innovation ways of working through the Food Foundry, “a startup accelerator program that rethinks the way food moves.”

This program is the process by which the various actors of the Relish Works ecosystem (startups, 1871 and Gordon Food Service employees) come together to co-create new products and services.

“Big companies can not only nurture startups by tapping into ecosystems but also invest in them to build out their innovation portfolio.”

FUEL OS: The innovation operation system for businesses

But there’s a difference between innovators applying best practices and actually operationalizing innovation in a systematic way.

What I just described above are examples of different ways companies get innovation right. Is there a playbook or blueprint, though, which all businesses can follow to innovate successfully?

Indeed there is. At Moonshot, we offer our FUEL methodology as a curriculum that organizations can harness to change the way people work, think and create innovative experiences. FUEL OS is an operating system for companies of all sizes to adopt to innovate with consistency.

If you’re curious to learn more about FUEL OS and how organizations customize it to fit the nuances of their culture, please contact us. Positioning your company to drive growth after this crisis starts today.

Pactera Technologies Limited is a global delivery partner that helps UPS with technology and high-impact strategic initiatives.

Republished with permission, this article first appeared on the Moonshot by Pactera blog.

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