Organizations seeking better business results from innovation often confront an apparent paradox: On the one hand, they can point to an impressive track record of innovations that contributed to their current market position. On the other hand, their people are unable to explain how, precisely, this innovation success was achieved. This incomplete picture of how innovation really happens makes it difficult to determine what’s working well, how to replicate it, or what could be improved.
The first step toward resolving this paradox requires recognition that, in most organizations, a great deal of innovation happens via informal mechanisms. Consider the case of an insurance company we worked with that had reached its top-tier market position, in part, by introducing a number of industry-shaping innovations over the years. One example they were particularly proud of was an early “mobile agent” app that enabled policy shoppers to interact via their phone with a sophisticated virtual agent powered by artificial intelligence.
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