With customers looking for more innovation from defence organisations, the gap between the need and desire to innovate and the capability to do so, has a way to go.
It goes beyond process and product. There’s a real requirement to demonstrate more innovation in our clients’ business models and service delivery as well. Staying ahead in the fast-changing eras of today and tomorrow means we are increasingly being asked to help our clients explore ways to shift culture, create a more intentional approach and enable the disruptive thinking that will deliver customer value.
Barriers to innovation in defence
Whilst technical innovation is at the heart of defence businesses, there’s now much more pressure to respond innovatively to the MOD’s need to “do more with less”, led by the trend away from single source provision. The requirement to collaborate more effectively with different internal functions, forge new, agile external partnerships and develop more creative ways to operate and deliver for the client has been a painful process for many defence businesses to address.
There’s a clear desire to respond to the changing customer and external landscape but it’s not always easy to translate into action. Internal structures, processes and, to some extent, mind-set, have remained the same. Reducing the internal friction involved in “doing things differently” has become a key aim for many businesses, perhaps understandably given long corporate memory for processes and relatively long tenure of those working within them.
Forces for change
We’re seeing a lot of evidence that the aspiration for innovation is changing, the MoD’s £800M Innovation Fund, being a case in point. This goes beyond enabling Britain to build on our excellent track record for defence products. Instead it’s a call to bring defence into the heart of technological advancements that have been led by the private sector. Mirroring defence businesses’ internal challenges, it recognises that to stay ahead, a culture of imagination, ingenuity and entrepreneurship is required to facilitate the ability to “be innovative by instinct”.
Increasing competition has also been a catalyst for innovation as businesses find themselves competing in different ways and with different entities in export as opposed to home markets. This is forcing companies to focus more heavily on ‘differentiation’ and is also driving a need to professionalise the business winning capabilities of our clients’ businesses. Further competition within home markets is expected over the longer term with our clients anticipating that governments may become increasingly more willing to buy from a broader range of global suppliers (rather than restricting themselves to sovereign industrial capability).
From Kiddy’s perspective, we are also seeing a greater demand for skills development to support the fostering of innovation, particularly around collaboration, influencing and creativity. A more flexible approach to partnering with other organisations in the supply chain, involving SMEs as part of mix, engaging successfully and productively with non-defence organisations are all becoming necessities in order to release and harness the innovation that is required to ‘win’.
The changing pace of operations have been transformative too. Customers are now demanding products that will be operationally beneficial quickly. Some SMEs are showing a tendency to bid on an imperfect solution, even with risk attached to it, but on the basis of a faster route to market. With big players focused on solutions that are tested and workable (and that factor in forecasted risk), they become the slower, more expensive (although may see themselves as the more reliable) supplier.
From the customer standpoint, again, innovation is more than the tech solution but how organisations choose to collaborate. Customers want partners to have as much stake in an outcome as they do, to be prepared in invest in innovative KPIs, seek out ways to create value and be prepared to differentiate from competitors. They want to work with people who value interaction, partnership and openness, who create a point of difference even through just by being more approachable.
Leadership and innovation
Truly developing an organisation that fosters innovative thinking needs clear direction from leadership. We need to nudge senior leaders who are operating within a comfort zone towards one of behavioural change. They need to get comfortable with making brave and more risky commercial decisions than before. This means a willingness to try things out, experiment, and learn from failure, a willingness to start small and then scale quickly.
Interestingly, we find that a high proportion of leaders in the Defence, Aerospace and Security sector also have a tendency to be 110% focused on dealing with the problems in front of them on any given day; given the predominance of engineering backgrounds in the sector, it’s not surprising that many leaders who have grown up through the ranks are primed to problem solve. Developing a longer term, strategic focus is therefore one of the biggest shifts we see being required of leaders tasked with navigating these businesses over the change horizon of next 10 years.
The leadership challenge is therefore to ask– how can we organise our business better to deliver against changing requirements? It means taking a step back to think about the long-game with regards to building teams able to deliver innovation and respond effectively to landscape shifts. Within this, leaders also need to address how they encourage diversity in style, approach and thinking across their enterprises.
Towards innovation
Organisations need to be explicit in terms of what innovation means – and not treat it as a slogan. This means:
- Having clarity on what an innovative organisation looks like in your context and selling this future vision across the business
- Supporting people who are trying to shift the business towards this vision. This takes resilience and effort when dealing with deeply entrenched, traditional ways of working
- Formally integrating innovation into the strategic management agenda of senior leaders. Make this how you run your business
- Creating conditions for dynamic innovation networks to emerge and flourish. This becomes part of how you work with others
We have found that building ‘trust’ across the business is really essential, when trying to foster a culture of innovation. People need to feel their ideas are valued, trust that it is safe to express them, and oversee the risk collectively with their managers. Success happens when you engage your people; they are relentlessly sold the vision of the new era, new ways of working, and supported to embed new behaviours.
Article submitted by Alex Terry, Principal Consultant at Kiddy & Partners. Prior to joining Kiddy, Alex worked for QinetiQ, the multinational defence technology company, where she provided consultancy support to a range of clients including the UK military, MoD, BAA and DfT.
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