Innovation counts for little without purpose and clear goals

Most organisations know that without innovation they’ll struggle. Yet fewer are focused on the why and what for.

Innovation culture consultant Gaia Grant. Picture: Bob Barker.

The mandate to innovate is well established in business culture, with most organisations aware that without a focus on innovation they’ll struggle to survive. Yet not as many seem to be focused on the why and what for of innovation.

Google’s former chief information officer Douglas Merrill suggested in a 2014 interview that many organisations innovate for innovation’s sake, rather than to meet an actual need. But innovation based on clear values, or purpose-driven innovation, can have surprising bottom-line results.

Colgate-Palmolive, for example, advertises its mission statement as: “We are committed to doing business with integrity and respect for all people and for the world around us.”

The company is ranked in the top five ethical companies and is a highly successful multinational with the most penetrating brand in the world.

Colgate-Palmolive’s commitment to focusing on people rather than simply on products has had another interesting effect. It also has high employee engagement through a respect for the company’s values and corporate social responsibility programs, such as free dental education in impoverished communities.

There is a clear link between company values and employee engagement. A Deloitte survey released this year found that nine out of 10 millennials believed the success of a business should be measured in terms of more than just its financial performance.

A 2013 study of 450 organisations by Bain & Co found companies that understood the need for strategic innovation had better employee engagement, higher productivity, more effective decision-making and increased growth.

Companies that focus on purpose and sustainability, not just on profit, also have increased engagement and outperform control groups on several financial measures across time — by almost 70 per cent, according to one study.

“Great companies work to make money, of course, but in their choices of how to do so … they invest in the future while being aware of the need to build people and society,” Harvard Business School professor Rosabeth Moss Kanter has said.

Several companies we have worked with have been aiming to bring this sense of purpose into their organisation, and ultimately into the way they innovate — and have remained highly profitable in the process.

A major food company in Europe is exploring ideas around more sustainable food preparation solutions for developing countries. In California’s Silicon Valley a tech company is developing exoskeletons to help paralysed people walk again.

On the other side, there are organisations that clearly favour product development and profit over purpose. We have worked with a soft-drink company trying to find innovative ways to sell more of its sugary product into schools, and a tobacco company trying to work out how to get around strict government advertising restrictions to sell more of its deadly products.

Every business needs to make a profit to survive as a commercial enterprise, but innovative thinking can make it possible to focus effectively on purpose and still make a profit. Perhaps it is time for businesses to start thinking about setting more sustainable and purpose-driven innovation goals.

Gaia Grant is an innovation culture consultant and co-author of The Innovation Race: How to Change a Culture to Change the Game.