Most people would say that innovation is important for business survival and growth. Any CEO would agree with that, but how many CEOs actually take the message seriously enough to act and actually implement innovation and moreover, demand outcomes? By Roger La Salle.

Profit of course is a most simple metric for business outcomes, indeed the very reason the business exists. There is a simple metric for managing growth and increased staff numbers: Profit divided by Headcount (P/H).

A new hire initially costs money, so expect a short-term dip in the P/H result, but in the longer term this number should in fact be bigger than the pre-hire number. If that’s not the case, then the new person is in fact costing you money.

This of course disregards any lifestyle choice you may make in sacrificing a higher P/H to enable yourself more leisure time. A laudable choice, of course.

In larger organisations we often see headcount grow for no good reason. In good times new people are hired with scant regard for the return on the investment they deliver. This is even more prevalent in Government, where a simple profit metric may not be a relevant metric and outcomes can be hard to quantify.

Even in smaller organisations people are sometimes added with no real metric to determine the value they deliver.

What about innovation?

Many companies have dedicated innovation departments and spend large amounts of money trying to embrace innovation. Lots of training is undertaken, special tee-shirts handed out, coloured banners, slogans and special thinking spaces created, some even with coloured bean bags to sit on. The now fashionable co-working spaces with their multi-coloured and funky fitouts have taken this to an entirely new level. This is all considered part of the innovation message, where passions run high and enthusiasm abounds.

It’s hard to criticise such initiatives, but what often happens, much like the old-fashioned staff suggestions schemes, is that in time innovation becomes a bit passé. In short the push for innovation wanes. Gone is the wild enthusiasm as people become accustomed to the message – innovation has just become a bit of “business as usual”.

Indeed in many cases innovation departments remain, but if you look closely you will no doubt find they have morphed into the “special projects” department, for tasks that may be a bit outside the normal run of business. These tasks now fill the time of the innovators. No longer are they working on innovation, the initiative is dead but the salaries and overheads remain?

When was the last time your innovation people delivered on your investment? Perhaps more to the point, do you have a metric? Perhaps the P/H metric alone may be sufficient. What would be the effect of dispensing with your innovation department if it’s not delivering real innovations?

Do we need a crisis to make it happen?

At the commencement of any workshop we conduct, the first question we ask is: “Can you force people to be innovative?”

The answer we get is always the same: “NO!”

We then ask, putting aside the innovations enabled by the IT and internet revolution, what period in history was the greatest for innovation? The answer we get is always the same, during the Second World War. The Second World War produced some astonishing breakthroughs with radar, sonar, advancement in aircraft development thought impossible, and of course – like it or not – the atomic bomb. A technology delivered in less than four years based on a single equation that many sceptics even doubted. In those times it truly was a case of “Innovate or Perish”.

In the light of this we may well ask, why it should be any different with the innovation in your business?

The present coronavirus is a classic example of necessity inspiring invention. New initiatives for survival and growth are popping up at every turn.

Look at the growth in food deliveries, a service that is sure to stay. Shops that have now discovered they can do just as much business online with fewer staff and overheads than the old model of a high street shop.

Look at the IT-enabled home offices, now sure to become a thing of the future. Bosses have realised they can gain more effective outcomes with people avoiding the drudgery of peak-hour travel. Look too at the reduced office space and attendant overheads enabled by remote working.

As for travel, we have seen air travel disappear, with people managing via remote video meetings, and travel costs for companies almost completely gone. Doubtless there are times when personal visits are important, but what we are seeing is that there are alternatives to what we considered normal; and many of these are here to stay.

If your innovation initiative is awaiting a crisis to spring to life, it may be time to question your approach. Indeed perhaps you need to innovate your approach to innovation, because done properly innovation is not hard; and yes, you can and should demand outcomes.