HGKC Roundtable – Disruption means firms need continuous innovation culture, CEOs warn

Every company wants to innovate and take calculated risks, but some approaches work better than others. HGKC’s round table event at the Bath Priory Hotel, held in collaboration with Royds Withy King, Milsted Langdon and Bluefin Jelf, brought together West of England leaders and advisers to explore risk-taking, entrepreneurship, innovation and more.

The region’s companies must take decisive steps to embrace innovation and continuous improvement, since business disruption and change is coming through faster than ever.

The warning was made by progressive business leaders and advisers at a West of England leadership debate, held at the Bath Priory Hotel last week.

In a wide-ranging session that looked at fear and entrepreneurship, and at the best ways for cutting-edge companies to manage risk while continuously developing and testing new ideas, those at the table all talked about the innovation challenge – and explicitly at how best to carry innovation forward in a calculated way.

Change a constant

Mike Punter, executive chair of software and telephony business Innovecom, said what’s different for today’s businesses compared with even ten years ago is that change is more of a constant than ever. The speed of transformation today means innovation needs to be a core activity for every company rather than the responsibility of a particular unit or niche.

“Enlightened large companies in particular have always invested in new ideas, often as separate “skunkworks” projects,” said Punter, “exploring radical innovation whilst protecting core markets – even spinning out new ideas in separate companies. Like the insurance sector did in the 80s with its “direct writers” – an evolutionary step towards the online companies we now see. It’s clear to me that today, companies large and small need to go a step further, embracing continuous innovation – the art of executing on core products while continually inventing new products and business models.”

The old model – what’s sometimes called a skunkworks approach to innovation – puts high-priority or radical R&D projects in the hands of small teams that are freed from the accountabilities and management constraints that apply elsewhere in the business.

It might be a romantic idea – the elite team working on secret, high-value projects for big gains – but those around the table said the model was now outdated, because skunkworks is tied to innovation by exception, rather than innovation by design.

“If continuous innovation is the goal, you need clear rules around that proposition if it’s to work,” said Peter Quintana, founder of High Growth Knowledge Company.

“It’s no good just encouraging everyone in the company to think big – or even just to give them the space and time to develop new ideas. You also need to set parameters that make it easy to put a cap on risks and that keep innovation projects well-defined and accountable.”

Quintana said one way to think about these self-imposed limits is as a ‘tripwire’ – once a particular limit is reached (whether a time limit or financial limit or some other constraint), an individual or team has to check in on the project and get scrutiny of it via a considered review process.

Rob Cosgrove, business development director for the cloud business apps business Insight Global, said this kind of innovation-within-limits approach was the best of both worlds.

“There is nothing worse than if risk-taking is frowned on and blocked internally in a business, but enabling innovation can’t be a free-for-all, either. Putting in place some constraints is clearly the way ahead.”

Culture of courage

But those at the session also argued for more than a rules-based approach to unlock the innovation opportunity.

“You have to go further than just set limits on things,” said Quintana. “It’s about instilling a culture where individuals can act with courage and confidence – and that’s something that is more widely recognised than you might think. The Institute of Risk Management, for example, sets out the behavioural competencies for the professional standards it aims to uphold and encourage, and puts courage and confidence at the heart of what it means to be a risk management professional.

“What does that mean? It means companies need to create the conditions to enable those in leadership roles to stand by their convictions with confidence, even in adversity. For individuals, it means being capable of striking a balance between determination and stubbornness, having the courage and strength to admit mistakes and work on them, and much more – even in the face of strong opposition or threats.”

Collaboration counts

Acting with courage and confidence in relation to innovation will sometimes – perhaps often – mean reaching out beyond the company to work in collaboration with other businesses to develop commercial opportunities. That’s not something to be afraid of, either, said several leaders at the session.

“You have to trust your instincts and not be fearful about sharing and about the risks around intellectual property,” said Rob Sinton, commercial director at the Bristol-based food-and-flavourings technology business TasteTech.

“The majority of projects we work on are in collaboration; requests tend to come from food industry business that want to innovate. I’m not saying you shouldn’t be prudent and cautious and go about things the right way, but equally you don’t want to close yourself off from opportunity by building walls rather than bridges.”

“The majority of projects we work on are in collaboration; requests tend to come from food industry business that want to innovate. I’m not saying you shouldn’t be prudent and cautious and go about things the right way, but equally you don’t want to close yourself off from opportunity by building walls rather than bridges.”

Jessica Bent, TMT and intellectual property lawyer at Royds Withy King, said it’s also worth remembering that open innovation projects are not always recognised for what they are.

“It’s crucial, of course, to have enough trust to be able to work with outside parties to mutual advantage, and next to this it is also important to understand the context and terms of any collaboration. That’s not always as self-evident as it sounds.”

Bent said: “Trust is what lets you go further, but an innovation strategy and IP policy that’s been cascaded to the team and that informs the intellectual property strategy is a valuable piece in the jigsaw.”

In today’s economy, with more freelancers and contractors than ever, Bent said this question of who owns the IP when innovating with third parties is one that should be understood.

“It’s a balancing act when it comes to innovation and creation. Agreement should be reached from the start about who owns what as projects unfold. That’s good for everyone involved, since trust is maintained and no-one gets any nasty surprises down the line.”

Dan Murray, chief executive of water treatment business Industrial Phycology, said the work of his company is an example of the importance of collaboration and open innovation, as I-PHYC is working with water companies on a biological process that uses the properties of algae and is new to the water industry but could deliver big benefits.

“You have to be open and put your cards on the table, and be open to collaborations, too, to advance potential projects. Often there’s no other way to get things done.”

Recruiting for culture

A last point raised by those in the session has to do with just how you foster an innovation culture – and what it is exactly.

Alan Furley of the Bristol-based recruitment business ISL said culture doesn’t just come from the top of an organisation, and from a leadership team leading by example, but evolves from the bottom up, too – starting with how a company recruits

“When it comes to recruiting, there are lots of variables to consider. It’s not just about finding someone with the right skills. There is the question of personal fit to consider, and other questions like how to build a healthy, diverse team.”

One of the ways to develop as a business is to hire where you are weak, said Furley. “But the people you hire where you are weak are usually different types to those in the business. So you get that tension in the team that needs to be worked at. But remember that you don’t need a team that are all happily socialising together for success. You need difference, too.”

HGKC Roundtable - Mastering Fear, Risk & Innovation

AROUND THE TABLE (from front left clockwise)
Dan Murray, Industrial Phycology,
Ian Sandham, Bluefin Jelf,
Jacquie Pinagli, Pinagli Telemarketing
Alan Furley, ISL Recruitment
Jessica Bent, Royds Withy King
Rob Sinton, TasteTech
Peter Quintana, High Growth Knowledge Company (chair)
Kim Jones, High Growth Knowledge Company
Rob Cosgrove, Insight Global
Lucie Novoveska, Industrial Phycology
Ian Lloyd, Milsted Langdon
Mike Punter, Innovecom

For more information on how HGKC can help you to become innovation-led and risk-agile, get in touch now. The coffee (or tea) is on us.

Author Kim Jones