Innovation is more than a fancy term. It is the reason why one company is more successful than another. Look at the rapid growth of the Chinese car market, driven by electrification, while classic brands struggle with this transition. We often have a wrong understanding of innovation. Essentially, what matters is not the amount of knowledge and ideas you have, but rather the way you systematically implement the right ideas.

Simply working with new technology is not innovation in itself. If you want to create added value, such a change must also be driven by a business model. Specifically, you can innovate as a company in two ways. On the one hand, there is exploitation or innovation from the operational side. The focus is on efficiency and short-term results without jeopardizing the stability of the company. This is important to remain competitive and provide reliable services to customers. Call it “playing not to lose.”

On the other hand, there is the experimental part – innovations that are more transformative and architectural in nature. A culture of allowing failure is very important here. Because in nine out of ten cases you will not be (immediately) successful. This is a quick process and a crucial part of an innovative organization that wants to “play to win”. In the end, however, it is not the most efficient or innovative organization that will prevail. The organization that best takes into account the duality of innovation – exploitation and experimentation.

“Ambidextrous” organizations

In other words, successful organizations are “ambidextrous.” They manage to provide their services efficiently, but also have the teams, expertise and time to flexibly try out innovative things. A good example of such a company is Amazon. On the one hand, Amazon excels at delivering goods that customers buy online, but on the other hand, the company has also developed a strong cloud service with AWS (Amazon Web Services). Such projects often end up in separate companies. If they fail, they immediately disappear from the scene. But if an idea is successful, it will be scaled up as quickly as possible to capture the market.

A strong strategy must be anchored at the core of innovation

Frederik De Breuck, head of the innovation and technology office Fujitsu BeNeLux

It is therefore important to combine both approaches. That’s why McKinsey’s well-known model with three horizons is no longer up to date. In summary: Horizon one is about maintaining the core business today; Horizon Two explores new possibilities for tomorrow that are still closely linked to today’s business; and Horizon Three focuses on innovations that can transform the company in the future. Where McKinsey compares value over time, today we should pay more attention to the impact we create. Time is just part of it. Think about companies working with generative AI and other emerging technologies that are already having a short-term impact on their business.

Where do things usually go wrong?

A strong strategy must be anchored at the core of innovation. The culture must then follow in order to retain people and change their mindset. And finally, you have to differentiate well between exploitation and experimentation. For example, you cannot judge the experimental part of an innovation based on the same business metrics that you use in operational activities. This is where things often go wrong in companies. The right use cases and top-down support are missing because managers expect all innovations to be profitable tomorrow.

Perhaps the biggest stumbling block is convincing the community. After all, people don’t like change. Every organization needs drivers who believe in change and are open to experimentation. If they leave, it will be impossible to change the mindset in the rest of the company. Companies therefore need to give people a voice so that they have space to express ideas. Open communication and education among employees and management are crucial elements in bringing about a change in mentality.

Perhaps the biggest stumbling block is convincing the community. After all, people don’t like change.

Frederik De Breuck, head of the innovation and technology office Fujitsu BeNeLux

After all, it shouldn’t just be just ideas and experiments. There also needs to be a handoff to teams that can scale and bring innovation to market. Many companies also have difficulties with this. In this case, they fail not because they failed to innovate, but because they are simply not ready to innovate.

Don’t think outside the box

What can companies do to be successful with innovations? Start by defining use cases and identifying the barriers that hinder innovation. Don’t think of innovation as collecting ideas, but recognize that it is a process. It is not knowledge and ideas that make organizations unique and successful today, but rather the fact that they manage to effectively implement and scale the best ideas.

By the way, you don’t have to do this alone. Feel free to engage partners from your ecosystem. Nobody can solve a problem alone. Today, a company that provides IT infrastructure is not just a supplier of hardware, but also a consultant who fits that technology into the customer’s business model and ensures that a solution has a real impact.

Finally, we can summarize an innovative way of thinking as follows: Stop thinking outside the box. Throw away the box and think again. Anyone looking for innovative solutions must distance themselves as far as possible from the context. If you outside the box You think you’re still too close. As soon as you want to implement an idea, you have to get back down to earth. But the biggest challenge remains getting people to lift their feet off the ground for a moment.

This is a contribution from Frederik De Breuck, head of the innovation and technology office Fujitsu BeNeLux. Further information about Fujitsu’s services can be found here.