Ideas applied: that’s what reaps revenue from engineering innovation

Innovation ideas applied

Innovation is squarely on the agenda for governments and the business community. Yet voters in Australia’s recent federal election felt disconnected from the Prime Minister’s innovation agenda, even scared by the change it signals. But innovate we must. Without it, businesses, governments and society will stagnate. What we need is not just more ideas, but better ideas applied.

Why must we innovate?

There’s no question that Australia must become a regular, profitable innovator. Productivity is sluggish. Business and consumer confidence is faltering. We’re sliding down the global innovation ranks [1], and economists are predicting an extended period of low economic growth. Critically, a shared belief in low growth can become a self-fulfilling prophecy.

Of course prevailing economic conditions are not the only driver for innovation. Population growth is pressuring governments to develop new services and infrastructure while balancing the need for fiscal restraint.

Competition is increasing across industry sectors from both traditional and new market entrants, while the rate of technological change is creating market disturbance and disruption. And automation is putting many jobs at risk, hollowing out middle-skill jobs across sectors, even in professional services.

Standing still isn’t an option. New ideas, technologies, services and infrastructure are essential to sustainable growth.

Engineers are under pressure

The engineering sector isn’t immune. Organisations are under pressure to attract and retain the best talent, including people in emerging fields like data analytics and smart asset operations. Executives are keenly focused on operational efficiency improvements not just to sustain acceptable returns to investors, but to generate the funds required for new investment.

So it comes as little surprise that more and more engineering executives are making the decision to invest in innovation. Yet many executives are unclear about precisely what they expect or need to achieve from innovation. Indeed, a few well-framed questions can reveal numerous, sometimes conflicting, perspectives not just about the focus for innovation investment but even what innovation means in their business context.

Does innovation improve sales revenue?

Feedback from customers of engineering firms indicates that innovation isn’t in itself a critical factor in considering, short-listing and then choosing a supplier of engineering services. But the growing client demand for better, cheaper solutions and growing competition makes innovation more essential.

Furthermore, customers also report that innovation is one of the engineering sectors’ weakest performance attributes [2]. So becoming skilled at innovation can provide a clear and repeatable competitive edge. Conversely, the business cost of inaction could be substantial.

Getting more ideas isn’t enough

Those business leaders that have settled on the need for innovation typically turn their attention to getting more and better ideas from their staff. They’re encouraged by innovation advocates and practitioners that focus on their particular version of the idea generation process. But, in all honesty, this really isn’t a big challenge. Getting more ideas, even great ideas, isn’t actually that hard. Lots of proven techniques exist to stimulate ideas. What’s lacking is an appreciation of what it actually takes to get ideas applied.

Only ideas applied create value

Here are 5 important dimensions of innovation that are often under-appreciated, contributing to low returns on innovation investments.

1. Successful innovation emerges from collective behaviours. Innovation is a team sport. Successful teams exhibit a suite of complementary skills, mindsets and behaviours. Normally those skills and behaviours aren’t evenly exhibited across a business. So business structures, silos and processes get in the road of connecting the right people together around problems, ideas and opportunities. Knowing what skills you’re looking for, where to find them (inside and outside your enterprise, and how to connect them is central to effective innovation leadership.

2. Innovation is often just good problem solving. Often the call for ‘innovation’ actually reflects a frustration at persistent problems. Critical thinking, complex problem solving and integrative skills can often yield a breakthrough, not requiring new or novel technologies or business practices. Assuming radical innovation is required can be a costly misstep.

3. Ideas need buyers internally. To generate and develop ideas people need a little time and resources. Typically, this requires support from at least a mid-level manager. So aspiring innovators must be equipped or supported to mount practical business cases, however simple they may be.

4. Customer empathy is a game changer. A customer must be convinced of the applicability of an idea for it to have any chance of being bought. Too often people become so ensconced in perfecting and selling their idea that they fail to test what it actually takes for a customer to buy and implement it. The ‘technical’ aspects are often the least of a customer’s concerns.

5. Executive commitment is essential. It’s an obvious and easy statement to make, but the devil is in the detail. Realising the full business value of an idea that has customer support can require business process changes to implement. It might also require additional capability, requiring recruitment, partnerships or even a business acquisition. These aren’t trivial business decisions. So executives need to actively manage their innovation portfolio, communicating regularly and transparently with staff and customers to avoid burning their talent, brand and balance sheet.

Fast track your innovation rewards

These are just a few of the critical insights required to implement a meaningful, profitable innovation program that is rewarding for customers, staff and shareholders.

By tapping into experience, implementing effective action, you can build an innovation culture that underpins sustained business performance.

How does your innovation program stack up? Are you doing what it really takes to get ideas applied and a profitable return on your innovation investment?


[1] Cornell University, INSEAD, and WIPO (2016) The Global Innovation Index 2016: Winning with Global Innovation, Ithaca, Fontainebleau, and Geneva.

[2] Beaton Research and Consulting benchmarking of professional services firm.