How to Become a Genuinely Innovative Company

In today's rapidly evolving business environment, innovation has become essential for companies looking to stay competitive. Leaders must constantly look for effective ways to innovate because relying on old solutions won't solve today's problems. However, innovation is often used as a buzzword, and it's essential to thoroughly understand its essence to make it work for your business.

So, what is innovation? 

Innovation helps companies adapt and overcome challenges, foster growth, and distinguish themselves from competitors. It is the process of developing original and improved ideas, products, services, and processes that meet evolving customer needs and solve problems better. Here are three reasons innovation is crucial for your business:

Remain adaptable

Unforeseen challenges are inevitable in business, and innovation can help you stay ahead of the curve. The recent COVID-19 pandemic disrupted business monumentally, rendering routine operations obsolete within a few months. Companies that failed to adapt and innovate suffered negative results from this world shift or have been forced out of business altogether. In contrast, those that embraced innovation were better positioned to navigate the crisis.

Discover differentiation

Most industries are crowded with multiple competitors offering similar products or services. Innovation can distinguish your business from others and give you a competitive edge.

Boost growth

Stagnation can harm your business. Achieving organisational and economic growth through innovation is critical to staying afloat in today's highly competitive world.
Innovation plays a critical role in various aspects of business, including mergers and acquisitions, where it can uncover new opportunities and risks and generate more creative and innovative solutions to address them. Innovation is like a jigsaw puzzle; each piece needs to fit together correctly to complete the overall picture. Leaders must have the insight to identify the pieces and the skill to assemble them in the right way to see the potential of an innovative solution.

Leaders Need an Innovation Playbook

Boardrooms worldwide face the problem of needing a playbook: how to innovate by leveraging cognitive diversity to 
respond to evolving types of competitors
embrace new business models, or
decide whether to buy or build a competing start-up.
Each of these questions requires an organisation to innovate, do something it hasn't done before, make a bet, and take on some element of risk.

What unites innovation, hybrid work, and M&A integration?

Let's rewind and add another crucial perspective: the pandemic substantially shaped the socio-political context of the modern workplace. It forced a large segment of the global workforce to undergo a remote work experiment of unknown magnitude. With blurred boundaries between work and personal lives, remote and hybrid leaders faced common challenges in 2022, which included culture, collaboration, engagement, and inclusion

"We must return to the office."

The call to return to the office to innovate and foster connections that allow team members to feel confident and comfortable taking risks never seems to stop. Studies by MIT and Microsoft showed that remote work makes it harder for these water-cooler interactions to happen. It causes resistance among workers who have discovered something that works for them and demonstrated productivity gains. Does any of this sound familiar?

On the contrary, a research study by McKinsey showed that over the past two years, there were a record number of patents, and VC funding increased by 111%. The findings show that innovation can be done effectively with the right processes and mindsets.

For cross-boundary collaboration to succeed, optimists and pessimists play a crucial role. Optimists foster innovation and have a growth mindset. Pessimists help improve the process by pointing out its potential flaws. Similarly, M&A integration involves significant uncertainty and require organisations to navigate various challenges related to cultural integration, collaboration, employee engagement, and innovation. These challenges can be even more pronounced in cross-border transactions, where differences in language, culture, and legal systems can further complicate the process.

So, what unites innovation, hybrid work, and M&A integration? They require us to look outside our domains of expertise and the places we are most familiar with and actively seek different or unfamiliar perspectives. In essence, they require diversity of thought and perspective. Therefore, diversity of thought and perspective is essential to success in innovation, hybrid work, and M&A integration.

Embracing cognitive diversity

Demographic diversity, including gender, ethnicity, and age, doesn't deliver better results in new, uncertain, and complex situations. Cognitive diversity, however, leads to better performance in uncertain times.

In addition to the traditional understanding of diversity, namely demographic diversity, there is another side that we rarely consider. That is cognitive diversity - diversity of thought.

"Cognitive diversity" in the workplace refers to the wide variety of ways your employees think and solve problems. HR professionals may also use the term to refer to different work styles, learning styles, personality styles, perspectives, backgrounds, or even cognitive levels within the workforce (for some employers, this includes recruiting employees with autism or Down Syndrome).

Cognitive diversity tends to get less attention than identity diversity because it's challenging to see. It is yet to be part of mandatory compliance efforts. 

Stop guessing. Start measuring.

Research has identified twelve identity elements forming the key to establishing effective work relationships. These elements are indispensable for cross-boundary collaboration and, as such, successful M&A deals. Eight of these 12 elements determine cognitive diversity.

There are four tangible identity elements. Tangible refers to visibility, first impressions, and their impact on interactions. We can view them as the visible tip of the iceberg. Tangible elements, such as generation or ethnicity, are encrypted in our bodies. They are challenging but not impossible to change, often overly essentialised, and a rich source of stereotypes, particularly in remote work.

And then, there are eight intangible identity elements. These parts of our identity construction are less visible yet primarily developmental. They change with time and are shaped by our life experiences. They require a second look and are more difficult to detect and determine. People are often unaware of the roles they play in their own and others' identity constructions. The potential lack of identity and self-awareness is why we can view them as the base of an iceberg below the water's surface. Examples of intangible identity elements are wellbeing and geopolitics, which play an essential role in how we engage with one another and express innovative ideas.

A measurable concept enables teams to understand and leverage overlaps and gaps from diverse thinking for collaboration and innovation. Before this happens, busy leaders, often unfamiliar with cognitive diversity, need support to facilitate change. This is where the innovation playbook comes in.

Creating the Innovation Playbook

The Innovation Playbook is essential for all organisations, regardless of size or domain. It serves as a compass, providing inspiration and the centre point of your company's value creation. This is for all stakeholders and the ecosystems you belong to. It will lay the foundation for building the right capabilities, culture, leadership, skills, and language. It will specify metrics that can help track innovation progress captured in your KPIs or OKRs to ensure growth both now and in the future.
Cognitive diversity must be central to the Innovation Playbook's effectiveness. It can help 
surface cognitive diversity
identify overlaps and gaps in operational teams
provide a shared vocabulary, and
shape collaboration.

Roll out the red carpet for inclusivity

Organisations must also create an inclusive and supportive culture that values and respects the contributions of individuals with different backgrounds and perspectives. This space must allow individuals to share their ideas and perspectives and actively encourage diverse thinking in decision-making processes.

Increasing cognitive diversity requires cultivating a workplace culture where conflicting viewpoints are respectfully welcomed and listened to. Leaders should actively look for employees who disagree with them and value their contributions. This mindset runs counter to some traditional management strategies and even counter to human nature.

Overhauling your workplace culture where dissent and healthy conflict are welcomed will take time. Leaders need to recognise the importance of cognitive diversity and support efforts to increase it. And employees need to understand the importance of listening and apologising, two essential skills in creating a civil and welcoming workplace.

Utilising the benefits to boost innovation

Cognitive diversity delivers actual results. Organisations with a measurable cognitive diversity agenda are better prepared to succeed in 2023 and beyond. A high degree of cognitive diversity generates accelerated learning and performance in new, uncertain, and complex situations - precisely what innovation requires.

A cognitive diversity approach to innovation is an effective way to improve M&A due diligence and integration, as well as remote work and hybrid teams. By bringing together individuals with diverse perspectives and experiences, organisations can more effectively navigate the complexities of cross-boundary transactions and identify new opportunities for growth and innovation. 

Furthermore, the lessons learned from managing remote and hybrid teams during the pandemic can be applied to M&A integration processes. For instance, organisations that have developed solid virtual communication and collaboration skills may be better equipped to navigate cross-border M&A deals. The parallel highlights the importance of being agile and adaptable in uncertain situations related to remote work and M&A due diligence. By leveraging innovation and cognitive diversity, organisations can turn uncertainty into opportunity, emerging more robust and resilient in the face of challenges.

If you want to leverage cognitive diversity in your organisation, contact us! We would be delighted to help you seize cognitive diversity opportunities for cross-boundary work collaboration.

VAELIOU - boost your performance
Powered by Cyberconnecting
Sepapaja tn 6, Harjumaa, Tallinn, Lasnamäe
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram