How to Implement a Strategy for Sustainable Innovation

How to weather extreme risks and challenges and transition to the New Normal

Disruption, disorder, and dislocation define the New Normal. It’s with us and it’s here to stay, at least for the foreseeable future. And their impacts are massive in their scope and severity. 

Let’s review some of those risks and challenges quickly. We have the negative effects of globalization. Here’s a partial list: wars, conflicting climate change laws and regulations, and unstable economic systems that are resulting in inflation, recession, volatile currencies, and growing debt. 

Add to these inconsistencies between laws and policies and their lack of enforcement, such as immigration. Then there are competitive pressures brought on by new, disruptive technologies and changing consumer dynamics. 

So how can you deal with these disruptors? 

As discussed in last week’s post, innovation is useful, convenient, and appropriate. 

As with any new strategies and models, the secret to their success lies in their implementation.

We’ll move beyond theory and get into the nuts and bolts of implementation. This quotation by Theodore Levitt: “Creativity is thinking up new things. Innovation is doing new things.” captures the idea of this post. 

Simply put, we’ll focus on how to implement a sustainable innovation program. We’ll highlight what works and what doesn’t.

What works in implementing innovation

Peter Drucker said, “If you want something new, you have to stop doing something old.” So, to start your innovation initiative, you must decide what aspect of your supply chain to modernize.

In deciding that you must first define your needs and challenges. That can vary from improving internal processes to improving supplier relationships to technology and customer service.

Once you’ve identified your needs and challenges, you must prioritize them. You don’t have the resources to attack everything at once. Rather, you should select those needs and challenges that can impact your business in a quick and meaningful way. That will guarantee you will address an impactful innovation.

Whatever you select should align with your strategy for transforming as you transition to the New Normal. A perfect place to begin your analysis is by taking a customer-focused approach. 

The likelihood that you will choose something impactful is high. That’s because your organization should revolve around your customers. That makes customer service an ideal starting point. 

Also, it cuts across several areas.

In focusing on customer satisfaction, you might consider reducing order ship times, reducing costs, and increasing product visibility and stock availability. By starting with the end in mind, you will likely address your key supporting logistics functions. 

Once you’ve selected the area you’d like to innovate, define your outcome more clearly. That is, the scope of your innovation initiative should not be too large or too small. 

With a clearly defined problem and scope, your next step is to assemble a team to work on this project. Some companies have standing innovation teams that focus only on innovating. However, most don’t, and they employ ad hoc teams instead.

In either case, your innovation team should consist of multi-functional team members. Staffing your team this way ensures you can address all the issues that may arise. They may include process issues, financial issues, technology issues, etc.

With a suitable team in place, you must ensure you don’t lose sight of your goal and the cost of achieving it. Also, you should ensure your end state will result in an acceptable return on investment (ROI). Addressing both helps ensure your project will give you a competitive edge. 

Putting these building blocks in place increases your chance of success. But there’s more.

Innovation initiatives should take a strategic view. In doing so, you must ensure you have firm leadership support. Any project without senior leadership support will either flounder or fail.

One final strategic feature to address is risk—specifically, supply chain risk management (SCRM). You’ll want to review SCRM for two things. The first is ensuring your project does not add any risks. The second is that you examine whether your project can eliminate or mitigate SCRM. 

Follow these steps and you’ll be on your way to launching a successful innovation project. 

Now that we’ve covered what works in achieving a viable, long-lasting innovation program, we’ll go into what doesn’t work.

What doesn’t work in implementing innovation

Knowing what doesn’t work in launching an innovation initiative is also vital. With that let’s dive into the obstacles.

Lessons learned have shown that compensating individuals or teams does not work. It’s counterproductive. In Best Practices Are Stupid, Stephen M. Shapiro notes when employees are paid for their work, they focus on achieving the goal rather than their undertaking. Completing the goal becomes the main focus, short-changing a creative solution. 

Innovating with expert functional teams. According to Lee Fleming, of Harvard Business School, breakthroughs arise from multifunctional teams. These breakthroughs far surpass the outcomes functional teams achieve.

Best practices don’t work – most of the time. Shapiro makes the case that when innovating through benchmarking, you’re only achieving parity with the competition. 

What’s needed instead is to leap ahead of the competition. You want to anticipate the competition. Otherwise, you’re always one (or two steps) behind, putting your business at risk.

Measuring the wrong things. Shapiro identifies instances where measuring the working thing can sabotage your initiative. So you must take care to measure those things that incentivize innovation rather than typical measures performance measures. 

Above we discussed the need to be aware of costs and ROI. There’s a flip side to that. The best solution might not be the most cost-efficient. To ensure you select the best way ahead, you need to look at your modernization effort holistically. 

You want to optimize the whole rather than any of the individual parts. Taking a tactical view rather than a strategic one will likely result in a sub-optimized solution.

That addresses what to avoid in enacting an effective and sustainable innovation program in your business.

Building a Sustainable Innovation Program that Prepares Your Business for the New Normal   

If you follow the advice in this post, you’ll be well on your way to taking your next steps for future success. One of the main things to keep in mind is that you should anticipate the competition rather than emulate it. 

Anticipating your competition keeps you a step or two ahead of your competition. Emulating your competition guarantees you’ll fall behind as your competition leaps ahead.

Besides choosing the right level of innovation, you must create an environment that supports innovation. Remember, that’s not innovation for innovation’s sake. Instead, it is a matter of taking a strategic view of your needs. A good place to start is with your customers.

It all comes down to one question. Are you positioned to weather the transition to the New Normal?

If you’re not ready or don’t know where to begin, contact American Global Logistics now to learn how we can help you.

AGL can help right out the gate. We can help you because we’re a customer-focused 3PL. We can help you because we are a strategy-minded 3PL that takes the long view. Finally, we can help by partnering with you to realize amazing long-term mutual benefits. 

Our operating concept is exactly what’s needed to develop a sustainable innovation program. 

Contact us to get started now. When you partner with us, we’ll take you from thinking up new things to doing new things – sustainably.