Innovation is one of the most important issues for creditunions. It is the key to growth and critical for the execution oflong term strategies – created by listening to employees andmembers, collaborative thinking and trust. In discussions withcredit union clients, it is clear that the challenges ofrisk-averse cultures, continous learning and strengtheningleadership teams and boards are priority issues.

Two innovation articles among many have proven useful as datapoints in this discussion. An HBR article written in the depths ofthe Great Recession in 2009, Innovation in TurbulentTimes, describes the characteristics required for successfulcollaboration. It takes us through a fashion industry case studythat portrays the conversion of non-stop creativity into fruitfulbusiness outcomes. Also noteworthy is Accenture's 2012Innovation Survey of over 500 executives, published asWhy Low-Risk Innovation Is Costly.

HBR examined collaborations between successful pairs of fashionexecutives: one being “right-brain” creative and the other“left-brain” commercial. Continual innovation occurs in fashion asthe “brand” is constantly reinvented and products that “consumersdidn't know they needed” are sold.

When the creative director can constantly generate new ideas,imagining a holistic picture by seeing every innovation as acomponent to fit the whole, and the “left brain” brand managerprovides analytical decision-making, this produces a continualinnovation environment.

HBR identified characteristics common to these successful “rightbrain/left-brain” fashion industry duos. With some adjustment, wecan apply the attributes from HBR's research to collaborative teamsof any size:

• Be aware of strengths and weaknesses and realistically assesswhat each team member does well and where help is required;
• Draw on capabilities to the proper degree and at the righttimes, applying complementary cognitive skills and balancingworking styles and decision-making approaches among teammembers;
• Put the team's interests ahead of individual interests based ontrust and focus on mission;
• Utilize observations that spark idea transfer and insight basedon raw intelligence;
• Apply relevant knowledge and experience to challengesfaced;
• Include frequent and direct communication to create a culturewith stronger communication skills;
• Continuously ask why and why not, becoming comfortable withquestioning and challenging basic assumptions;
• Commit to the success of the business and the team.

Two-thirds of the executives polled in Accenture's InnovationSurvey see innovation as required for realizing their strategicgoals. More than half, however, felt their organizations have a“sluggish” innovation process and just 18% of CEOs believed thattheir strategic investments in innovation are paying off. This poortrack record is beginning to negatively influence other companiesfrom risk-taking in the future.

Two main factors have impacted the achievement of higherreturns: 1. A focus on product line extension and renovation (anapproach pursued by 64% of survey respondents), rather than abroader portfolio of bold, big ideas; and, 2. An over-emphasis onthe innovation process itself without a focus on bringing ideas tomarket with a strategic business model that focuses on the customerexperience.

Organizations that have a comprehensive, formal system in placefor innovation, however, do report better outcomes. CEOs cansupport systemic innovation by creating an innovation departmentand deploying a “chief innovation officer”. Shared “capabilityplatforms” for innovation operating across departments createeconomies of scale through software, and social networks. Insteadof just product innovation or line extension, business innovationbecomes a start to finish value chain of bold challenge and freedomwithin a framework that integrates elements of product, service,technology and a personalized approach to the customer. Over 85% ofthe executives surveyed said personalization was important to theirapproach.

Lateness to market was cited as a top reason for innovationfailure. A comprehensive approach emphasizes speed to market andflexibility. Ideas are tested fast, fail fast, and then the processis repeated; it is counterproductive to wait for perfection. Theorganization values the lessons from failure as they do fromsuccess, and they are applied in each new attempt.

As in the fashion industry example, creativity to generate ideasis balanced with analytics to limit unprofitable projects. A solefocus on budgets, resource allocations, and timelines can waste theinnovation investment. The power of Big Data and social mediaintegrate customer personalization into development processes tomitigate risk.

When the organization supports its innovators with acollaborative culture and comprehensive systemic approach, itreduces obstacles and sets the stage for innovation success.

Stuart R. Levine is chairman/CEO of Stuart Levine &Associates
Contact: (516) 465-0800 or stuartlevine.com