Liberate to innovate in the marketplace

Innovation is a critical competitive factor in the contemporary marketplace and the influence and impact of innovation in the global economy is distinctive, writes Dr. Cobus Oosthuizen.

Managers know this, customers know this, economists and employees know it and so do you. However, knowing that innovation is key does not mean that it happens. In addition, knowing how important it is does not mean it is easy to accomplish. The point is that very few companies can afford to feel secure behind their established brands, longstanding customer relationships or proprietary technology. The competitive pressure on all of us is global and immediate.

According to the latest country innovation ranking, the Global Innovation Index conducted by INSEAD, South Africa occupies the 59^th position out of the 125 countries measured. This puts us between Argentina in 58^th position and Ukraine in 60^th. The first five positions are taken by Switzerland, Sweden, Singapore, Hong Kong (China) and Finland.

In addition, Forbes recently released its list of the most innovative companies in the world, with Salesforce.com taking podium position, followed by Amazon.com and Intuitive Surgical in second and third places.  Not one South African company features in the top 50. “What makes the difference?”  One inevitably wonders.

Well, it seems that these highly innovative companies go to much greater lengths to tap the creative potential embedded in their employees. They invest in creativity training; instil a desire to be innovative; create the right organisational climate; and involve all employees and their knowledge about customers, competitors, and processes.

People and ideas are at the heart of their management philosophy. People are given room to grow and to try new things while learning from their mistakes. If the

CEOs of these companies were the only innovators in their respective companies; they certainly would not have reached the levels of success they enjoy today. They succeed because they build a strong sense of openness, trust and community across the company and facilitate the internal mobility of talent. They develop verbal and nonverbal cues to employees that their thinking and autonomy is respected. These cues shape the culture of the company and are often more effective than monetary rewards.

Schumpeter, the well-known economist of the 20^th century believed that innovation is the driving force not only of capitalism, but also of economic progress in general, and that entrepreneurs are the agents of innovation. One could then safely say that these highly innovative companies are filled with agents of innovation – entrepreneurs.

We can surely learn from these highly innovative companies as we journey towards a future in which it is expected that the rate of innovation will increase even faster. Innovation will be the driver for global growth in the future and is also bound to contribute significantly towards potential solutions to some of the most challenging issues that currently face the world.

The development of active innovation infrastructures at both company and country level is central to achieving sustainable financial performance and GDP growth. Innovation leadership will need to be driven from the top by senior management to ensure that the level of priority required is pursued throughout the organisation.

Our government will also need to show strong leadership, and ensure that well-directed policies are implemented to strengthen the science and technology foundation as well as to provide an innovative infrastructure for South Africa. Hard choices will have to be made in terms of where to focus scarce resources to be able to compete in the global arena in both the short and longer term.

(Dr Cobus Oosthuizen (BCom, MBA, PhD) is the Dean of the Faculty of Management and Leadership at Milpark Business School)