Mark Blackwell
Welcome Simone. It's such a pleasure to have you on the Arkaro insights podcast series. I hope this is the first of several podcasts together as we explore the world of innovation and share your experiences on that theme. I think today we're going to kick off with a general overview of the importance of innovation processes in organisations. So tell me a bit more. What is an innovation process? How does it differ to an R&D process? And why is it so important?
Simone Arizzi
Thank you very much, Mark, for the question. It's a pleasure to be here with you today to talk about this very, very interesting and important topic, which is the one of innovation. I think, as we all know, innovation is a much used, sometimes I've used the word today in business, every company wants to be innovative, every company aspires to be more innovative, which essentially means, you know, creating value for a multitude of stakeholders. However, being innovative, being innovative is not easy. It's easier said than done. Because one thing we can say for sure, innovation outcomes do not just happen by chance, they need to be created, they need to be built. And it takes an effort, it takes a juror journey to be successful at the business of innovation. And so that's where having a sound innovation process come in, because a sound innovation process essentially helps you to what, what is almost invariably a very complex journey. And it typically helps you in two ways. One is to get there faster, right. So through a through an innovation process, you can achieve your goals, faster in a shorter amount of time. It also helps in the journey itself, in aligning as you go along the various stakeholders, which are typically in many cases, the business functions getting there. Let me give you an example. I've been working with a very large petrochemical company in Asia recently. And this company has a lot of KPIs and the US actually rather good processes in for example, managing R&D, which by the way, is different than the managing innovation. But what is happening in this company is that their processes are not connected to each other. Essentially, there are a lot of organisational silos. And where in this particular case, in align the unified innovation process can help is in getting the various parts to work together and getting the various teams to be aligned to pursue the same strategic objectives. That's one classic examples of how having an innovation process definitely is, is helpful.
Mark Blackwell
Absolutely, you're talking about silos, I cannot help but remember, one company I was helping with it in innovation transformation on the R&D organisation was a three hour drive away from the commercial organisation. So of course, there was very limited cross functional collaboration, and all of it and rather formal meetings, which really stifled that essential collaboration that you need in any good innovation process. And it was remarkable just how putting in some simple activities to drive cross functional collaboration and allow people to share their into their market back insights with the R&D organisations changes things quickly. So absolutely agree with you that
Simone Arizzi
Yeah, the concept you just mentioned, right? You know, these organisational silos. So it is indeed a big challenge when you want to innovate. And again, the process really helps, you know, to break the silos because innovation is complex is difficult, and in order to maximise your chances of delivering superior unique results, okay, you need to use all your functional capabilities and competencies to maximise your chances of success. Absolutely,
Mark Blackwell
Absolutely. So if you walked into a company that didn't have an innovation process, what might you expect to see?
Simone Arizzi
So let's be frank here. So actually, many companies, companies either do not have much of an innovation process at all, or whatever they have is certainly not what they called before. Sound the innovation process, right? And, and the truth of the matter is that they've been existing like this and sometimes achieving successes, you know, for quite a while. So why is innovation process important? It is important because it doesn't matter where a company is, it matters what a company can do more of, or better off with an innovation process. And that's where I think one should focus on, right, you know, it's taking the existing state of the company, in terms of processes as well in terms of capabilities. And, and understanding what the current state is, and then applying a an innovation process to make things work better. I gave you an example before, let me give you another example. Now, I recently talked with a CTO for a very large chemical company, who was telling me essentially the following the R&D teams that I have, think they are very good at innovation. And, and the reason that they think they're very good is because they have the building, they are sustaining a rather large r&d portfolio of projects. But what they didn't see this, the CEO CTO told me is that actually the projects in the portfolio, in reality, were making a rather marginal impact to the business results, right. And again, you know, where any innovation process can help is in ensuring that the portfolio that any company large or big is working on is able to deliver against some set business priorities, right, because in the case that I just quoted of the of this company, this project actually should not should not be worked on, right, you know, should be either substituted with, with ones which can deliver better value, or should should not be existing at all. Again, an innovation process can also be helpful in improving the quality of your portfolio so that you can deliver superior business results.
Mark Blackwell
Totally, yeah, I think you touched on something for which for me is particularly important. Underlying any good innovation process is a strong business strategy. And from that, a strong innovation strategy. And in order to do an innovation strategy, you need to be customer first and really understand the customer needs first before trying to ideate and imagine what the world really do care about. I remember trying to do an ideation session with an organisation that was embarking upon an innovation journey. But it became very clear early on that there lacked an innovation strategy in terms of what choices to where to play, and how to win, what to work on what not to, and actually market insight. And so we've tried to kick off the process development with ideation was challenging to say the least. And we ended up circling back and going into really understanding what the market firms because I think that's, that is where you need to kick the process off from
Simone Arizzi
Yeah, you mentioned Mark, a uniquely important towards, okay, in the context of an innovation process like strategy. I mean, it's straight I know you are, you are a founder and strong proponent of strategy, he is a key element of any sound, business, Journey business planning. Okay. And this also definitely holds true also about when you are when you are running. A nimble implementing an innovation process. Strategy is a core component of this.
Mark Blackwell
Another question that comes to mind is having a good innovation process? This is something for the world of corporations, or is it something should all companies be doing maybe startups as well?
Simone Arizi
Great question. It's, I strongly believe, and I've seen it in many cases, demonstrated by evidence that there is absolutely no correlation with the size of the company, okay, from a startup down to a multi app to a multibillion dollar corporation. And the relevance and importance of an innovation process. In other words, be it as in a small company, be it in a large company, and innovation process always helps. And I go back to some of the comments I shared with you before when you are trying to make choices along your innovation journey. When you are Trying to prioritise resources which you mentioned startup right they are certainly not as large as the ones of a large companies and innovation process there too can help when you are in the in trying to understand the insights and what you can do with them, you can be a large company, but you can also be a small company since still have value from the implementation of an innovation process.
Mark Blackwell
Many startups by definition are extremely tight on resource. And if you don't make sensible use of that resource and making the right decisions on innovation, you can quickly die. So
Simone Arizzi
yeah, I am I am currently working with actually a startup, okay, it's a it's in California, in the area of renewable energy. And the challenge that they have, okay, in this particular case, is a challenge around prioritisation prior, given their technology, prioritisation of markets, and priority prioritisation of, of technology options. So within what they're currently working on, right, you know, combining with specific technology option should they be focusing on for to create value in which market applications. And this is another area where having a good innovation process can help?
Mark Blackwell
You know, right on right on, I mean, I'm, I sometimes get a bit frustrated the process as a dirty word, and the process has seemed to be heavy and not agile. But I think it's really critical, in my experience, that a process does not have to be draining, but it can be a catalyst, an essential catalyst to make things happen, especially innovation. So given that, why might companies be reluctant to develop or even strengthen the innovation process that they have?
Simone Arizzi
I think actually, it's not that companies do not want to innovate, right? You know, Quite on the contrary, and as we said, before, company wants to innovate, it's not a problem that they do not have, they do not know how to do that. And not knowing how to do that makes it in many cases that they do not understand what is the value that an innovation process can bring to them. Because we need to recognise that it you know, so it's, this, there is an a big element of managing management of change here. Companies, as it happens to all of us humans, so they are, they're used to their own ways of doing things. And so coming up with before they can embrace the view that something new something sometimes fundamentally new for them, like having a process, an innovation process is indeed the hurdle. However, once they understand it, once they understand the value that they can bring, then in my experience, then then they actually they get, they embrace the pool, and they want to jump into the future through experiencing themselves. So what an innovation process can bring to them. But you're absolutely right. There is a hurdle to be overcome, which is, which is which has to do with the reluctance of change, that that is an element that that one needs to take into account in many organisations.
Mark Blackwell
Spot on. So some only I'm going to give you a bit of a challenge. So clearly, companies are different. But if you are trying to find some generic ideas, how would you start developing an innovation process in an organisation? What would what's the sort of the core things that need to be in place to get going from the start?
Simone Arizzi
Yeah, I think at the high level, there are essentially three elements to this. The first one I already mentioned, is strategy. Right? You know, it's developing understanding what your strategy your innovation strategy should be is key. In many, many cases in today's industrial realities and wars, this means how the and having an understanding of the market have an understanding of the customers, as well as looking at your internal capabilities to be able to deliver against those unmet needs. So that's one element is the strategic element. The second important element is it's not Not enough to have a strategy, you need to be able to execute it for success. And that's actually where many companies have challenges. Right? You know, they believe that only by having a strategy, it's halfway there. Not really, I mean, there is the execution is just as important as the strategy itself. And what I mean by that is, is understanding how do you need to bring the various organisations various functions that you have in your company, to work together to make to execute against certain goals, so to execute against your strategic plans? And, and there, then you have processes that, that, that have to do with? How do you manage a project itself? You have challenges that have to do with? How do you look at your portfolio of initiatives that you have? And how can you get better at that. And so that's the second element, it's the element of the execution of your strategy. There is a frequently underestimated element, which is a cultural element, I call it the people factor factor. And here, it's not only about having the right people, right people with the right capabilities that can execute a strategy. But it's also an in particular about being able to set Okay, in your organisation, or in your organization's if you if you're talking about larger companies, the right behaviours, the right mindsets, that are absolutely necessary for people to work together and succeed in the innovation journey.
Mark Blackwell
Very comprehensive, thank you very much, indeed. But I can still hear some people sort of ringing my ear, as if they're in the back of the room saying to me, yes, but this is a process, doesn't a process for innovation, destroy that critical creativity and risk taking that you need to do innovation? Well?
Simone Arizzi
No, definitely not. If you do it, right. I strongly believe actually, that innovation processes is there to facilitate your life not to make it harder, in the innovation process, will facilitate the creation of an environment where the innovation can thrive, and not vice versa. And by the way, I take this one as an opportunity to say that, you know, innovation is actually a, you cannot force innovation just to happen, right. But you can certainly create an environment and you can you can, you can work on creating the right conditions. So that innovation can thrive, and at the same time, inhibit some of the conditions or some of the behaviours that prevent innovations from happening. So back to the question, the process does not create does not destroy creativity at all, a process is there to help you manage and create the conditions so that your creativity can be increased and can thrive.
Mark Blackwell
Yeah, absolutely. You know, so that's the fundamental nature of an emergent property and innovation is an emergent property, that by creating the right conditions, you it will allow it to happen, but you can't force it to happen. So I totally agree with you. So, thanks for that. Simoni, you've been in in a short period of time covered a lot of ground. So, if anyone's interested in developing their innovation process, what should they do next?
Simone Arizzi
So, thank you, Mark. So, look, I in my company, we work with several other companies to improve their innovation capabilities. And that can take several new nuances right, depending on the need, we work on. For example, on developing we mentioned before on the developing a more powerful innovation strategy, we work on creation of a stronger higher value portfolio of innovation projects, we work on what needs to be done to enhance the behaviours or the behaviours in the organisation that can lead to better innovation results or all of the above. Right. So if someone is interested in in this topic, then I suggest date they can contact Arkaro and then through you and with you. We can certainly have more in depth discussion. hear and see what the next steps we can take together to advance faster and better in the innovation journey of whoever is interested.
Mark Blackwell
Absolutely agree with you, I think it's fair to do. Innovation is a is a cross functional activity. And it needs a cross functional team of consultants to help a company really accelerate their journey. So thank you for that. And we'd be really happy to work together with anyone who might be interested. Absolutely. Thank you for Tony. That was really good. I know that we've got plenty of other ideas for innovation in the foot in the future and some podcasts together. But for anyone who's listening to this podcast if there are any topics you'd like us to cover, please let us know and we'll do our best to cover them.
Simone Arizzi
Thank you very much. Mark. It was a pleasure and hope we can chat again on this channel soon.
Mark Blackwell
Goodbye. Goodbye.