Magazine Winter 2019 Issue Research Feature

Grow Faster by Changing Your Innovation Narrative

Companies that grow sales faster than industry rivals articulate a coherent, compelling innovation narrative and rely on four powerful levers to make it a reality.

George S. Day and Gregory P. Shea Reading Time: 16 min 

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Business people jumping on growth diagram bars with the leading center bar topped by a lightbulb indicating innovation

Managers have no shortage of advice on how to achieve organic sales growth through innovation. Prescriptions range from emulating the best practices of innovative companies like Amazon, Starbucks, and 3M to adopting popular concepts such as design thinking, lean startup principles, innovation boot camps, and cocreation with customers. While this well-meant advice has merit, following it without first understanding your company’s innovation narrative is tantamount to going from symptoms to surgery without a diagnosis.

An innovation narrative is an oft-overlooked facet of organizational culture that encapsulates employees’ beliefs about a company’s ability to innovate.1 It serves as a powerful motivator of action or inaction. We find innovation narratives in two basic flavors: growth-affirming and growth-denying, or some combination thereof.

Companies that lead — or aspire to lead — their industries in organic growth need to have a coherent, growth-affirming innovation narrative in place, and we will discuss why that’s important and what it can look like. But what actions support the development and maintenance of such a narrative? To answer that question, we tested 18 possible innovation levers and identified the four that are most relied upon by organic growth leaders to stay ahead of their competitors: (1) invest in innovation talent, (2) encourage prudent risk-taking, (3) adopt a customer-centric innovation process, and (4) align metrics and incentives with innovation activity. We will look at each one in turn.

These four levers will be familiar to innovation practitioners, but their effects intensify with managerial focus. They serve as so-called simple rules.2 That is, they avoid the confusion and dilution of effort that result from trying to pull too many levers at once or in an uncoordinated manner, and they channel and prioritize leaders’ efforts to embed a growth-affirming innovation narrative in their companies.

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Identifying Your Company’s Innovation Narrative

Organizational narratives, and especially innovation narratives, provide a useful means of diagnosing the current operating reality in a company and guiding interventions to sustain or change that reality.3 What is the prevailing innovation narrative in your company? To sort that out, listen to how the people responsible for innovation talk about it and the stories of successes and failures that they tell.

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About the Authors

George S. Day is the Geoffrey T. Boisi Professor Emeritus and a senior fellow of the Mack Institute for Innovation Management at the Wharton School of the University of Pennsylvania. He is the author of 19 books on marketing, innovation, and strategic management. Gregory P. Shea is an adjunct professor of management at the Wharton School of the University of Pennsylvania, a senior fellow at Wharton Center for Leadership and Change Management, and president of Shea and Associates Inc.

References (12)

1. C.A. Bartel and R. Garud, “The Role of Narratives in Sustaining Organizational Innovation,” Organization Science 20 (January 2009): 107-117.

2. D. Sull and K.M. Eisenhardt, “Simple Rules: How to Thrive in a Complex World,” (Boston: Houghton Mifflin Harcourt, 2015).

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Acknowledgments

The authors are grateful to the Mack Institute for supporting this research project and providing access to its corporate partners for data collection.

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Comment (1)
Ahmed Mohammed
A delegation of MBA students from the Abu Dhabi Campus of Al Ain University of Science and Technology visited Borouge Innovation Center as part of their Strategies for Managing Innovation and Change course. Students were introduced to the latest innovative technologies and applications in the plastics manufacturing process.

The aim of the visit was to introduce students to ways of shaping innovation and creating change and harnessing the power of analytical and creative thinking to find and apply scientific solutions to problems via research and experiments. The visit also helped students to see linkages between the course’s theoretical content and real-life examples of the impact of innovation on the final manufactured product.  
see for more details: https://aau.ac.ae/en/news/2018/borouge-innovation-center-hosts-aau-students
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