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What makes a company innovative? Steven O'Kennedy shares his thoughts.

Updated: Jun 5, 2022

Being an innovative company is not about using the latest technology or the latest cool project management techniques or even setting the latest design trends. It's not even about the ability to change quickly or bring new offerings to market quickly. Sure, all these may be ingredients you could observe in an innovative company, but they are just visible trappings rather than the substance.

As an example, I'll borrow light-heartedly from some of the content that currently circulates heavily in business/ innovation social media channels: I could get up at the same time in the morning as Steve Jobs, always wear the same clothes like Steve Jobs did, ask questions of yourself in the mirror every morning like Steve Jobs did, but Steve Jobs this still does not make me! Fortunately, I have recognised this fact before spending a fortune on a wardrobe full of polo-necked jumpers!

Being an innovative company is not about using the latest technology or cool project management techniques.

If we look past the trappings, we see that successful innovative companies have three ‘special’ abilities:

1. To see at the right time the necessity to change.

2. To follow through on that change without undue delay.

3. To measure the impact of that change and if it has bee

n a step in the right direction.

Building a company with innovation at its core requires these three things in every aspect of its operation - from tech to sales and from product to HR. It’s also worth noting that the company doesn’t necessarily need the same level of innovation in all of its areas at the same time. Also, the pace of innovation and change does not need to be constant. The company should be able to flex in one or more areas faster or slower than others - as needed.

This all sounds hard enough for a brand-new company to achieve - but what about transforming an existing company to work in this fashion? It is clearly possible – a good example is Nintendo which started out its life as a playing cards manufacturer until it started to stagnate and had to reinvent itself. When trying to transform an established company and introduce innovation, an important initial goal should be to first define what innovation actually means to the company – and also the types of change that are most important to facilitate and measure.

Once the aim is clarified, agreed upon, and prioritised by the leadership, then the success factors must be set. Defining success is critical because unreasonable demands and requirements will quickly lead to failure and abandonment of the programme, while unambitious goals may be achievable but will not lead to a return on investment. The goal should not be to prioritise pace of change, or other skewed interpretations of agility, but to focus on achieving the 3 indicators listed above.

Companies like Amazon, Netflix, and Apple innovate at pace because they have conditioned themselves to identify change and measure at pace; they have company-wide constructs in their organisations and business models that facilitate this. These constructs will not and do not exist in a company at the start of their innovation transformation programme. In fact, it is likely that the first steps in such a programme, will produce results that will not appear like innovation at all if measured against the backdrop of a Google or a Microsoft or a Tesla. But that doesn’t mean that it isn’t innovation for the company that’s doing it.


Steven O'Kennedy is Director of Engineering and one of the 60 Leaders on Innovation. After working on large scale system implementation and technical transformation projects for many years as a technical architect, he now focuses on incubating innovative products and services centred around modern software architecture, AI and cloud technologies.


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