nnovation is not just about heavily funded research and development labs, armies of scientists and patent lists; rather, the concept of innovation must be broadened to include radical new thinking across the entire spectrum: processes, products, technologies, services, marketing strategies, customer experiences, sourcing schemes, cost structures, business models, management practices and industry architectures.
It is when we take a closer look at Latin American companies - both large and small - that we notice that they are really innovating in a broader sense. In fact, there is an abundance of innovation throughout the region.
Now, what do the development of a plasma engine that will take us to Mars, a low-cost and highly versatile oil pump, a new business model to produce, store and process basic grains without physical investment, the planet's first carbon-neutral coffee, or a new eco-efficient material and fashion products made from salmon skin have in common?
What they have in common are high doses of innovation with a first and last name: Ad Astra Rocket (Costa Rica), Sertecpec (Ecuador), Los Grobo (Argentina), Coopedota (Costa Rica) and ES Salmon Leather (Chile). Obviously these companies must be doing something right.
The most important challenge for management in this new century is innovation, which has always been important. We know companies in Latin America where a brilliant idea, a well-kept secret and a well-established patent have enabled decades of leadership and fabulous returns on investment. But such cases are and will become less and less frequent.
In a digitally interconnected world, the speed at which ideas are moving means that recent innovations will soon be surpassed. Customer expectations are also globalizing and becoming more sophisticated; this will rapidly increase as the new global, digitized and hyper-connected generations grow first as consumers and gradually take control of businesses, as they found their new companies, or begin to lead companies that others may have founded but which they will reinvent. Success and survival in this new reality means that companies need more than good ideas and the ability to execute them with excellence.
Developing a sustainable capacity for continuous innovation must necessarily be a process led at the highest level of the company. Without the complete involvement and full commitment of the organization's leaders, there is no chance that the company will acquire the capacity to innovate with the pace and consistency that the times demand.
Like Natura, Coopedota, Los Grobo, BAC Credomatic and Grupo Britt NV, we have found many other companies in Latin America that understand that ordinary employees and friends can eventually become extraordinary innovators. So over the years these companies have been successful in getting the whole organization on board with innovation through different mechanisms.
Looking at the progress of these pioneering companies, the reason these champions manage to innovate consistently and profitably, while others do not, is that they have approached the challenge of institutionalizing innovation in the same way they approached other enterprise capabilities, such as total quality management, customer service, lean manufacturing, enterprise resource planning or six sigma. They have made a considerable effort to integrate the DNA of innovation into everything they do, to be as good at innovation as they are at disciplined execution.
These innovation champions have demonstrated that developing a strong innovation capability in the organization requires a systematic effort from everyone, where the support of top-level executives, the existence of a support structure, motivated people trained in innovation techniques, the development of processes and tools for monitoring and guidance, and the strengthening of a culture and values aligned with innovation are fundamental for success.
Excerpt from the article "Champions of innovation in Latin America", published in the magazine INCAE Business Review.
