Nathan Fulwood, Strategy Director at CreateFuture, explores what it really takes to foster innovation in a meaningful way.

The idea that businesses must innovate to remain relevant has become widely accepted. But for many organisations - particularly for those in regulated sectors, turning this idea into reality is far from straightforward.

After all, real innovation requires a shift in mindset across an entire organisation, and it can often encounter resistance at every level. History has shown that recognising and implementing transformative ideas isn’t always easy—innovative breakthroughs, from the first powered flight to the development of cloud computing, have often faced scepticism and inertia before they gained any real traction.

So how can companies cultivate a culture of innovation in a way that leads to tangible, long-term success? Here are five key strategies to help your organisation stay ahead of the curve.

1. Upskilling programmes: Cultivating innovation from within

Start by investing in your most valuable asset: your people. Implementing comprehensive upskilling programmes can nurture an innovation-centric culture across the organisation. Consider initiatives like internal universities, agile training, or broad certification programmes.

While this approach tackles innovation challenges head-on, it’s important to strike a balance. Focus on empowering and developing your top talent rather than over-committing resources to bring everyone up to speed.

2. Innovation hubs: A dedicated space for experimentation

Innovation hubs or labs create a dedicated space for experimentation, apart from daily operations. Such environments not only attract top talent but also allow for the exploration of future-focused business problems with greater flexibility.

In a heavily regulated sector like FinTech, these ‘sandbox’ spaces help ensure innovation progresses safely. When your business relies on handling complex operations, the last thing you want is an experimental lab running in your live environment. As Warren Buffett aptly said, “It takes 20 years to build a reputation and five minutes to ruin it.”

Beyond maintaining a safe setting for innovation, consider how to channel these innovative outputs back into the main business. Prepare for some organisational resistance to change, and think of ways to integrate ideas effectively. Be ready—it may be a challenging process at first.

3. Start-up studios: Shaping the future, today

For a more direct approach, consider establishing a start-up studio. This involves creating several ventures within your corporate structure, each addressing different aspects of your value chain or exploring new business models.

This method can yield substantial benefits, but it’s essential to strike a balance. Avoid alienating your core team by involving them in the innovation process, and resist the urge to impose rigid corporate practices on these agile ventures.

4. Incubators and accelerators: Engaging with external innovation

Incubators and accelerators provide an avenue to collaborate with external start-ups, offering funding, mentorship, and resources. This approach can mitigate risks and bring in fresh ideas from outside your organisation. At CreateFuture, we offer these services to keep you on the right track—not only fostering innovation but also ensuring tangible results.

In the current financial climate, the challenge often lies in demonstrating concrete returns on investment, especially in the short term. Developing metrics that highlight the long-term value of these engagements is key, and communicating this effectively to stakeholders is essential.

5. Sense and scan capabilities: Staying ahead of emerging trends

Building robust sense and scan capabilities enables you to passively monitor the landscape for new trends and potential partners. The ongoing buzz around AI enablement, for example, is something many within multiple sectors are particularly interested in and are actively scanning for partnership opportunities in.

This approach is appealing for its low-risk nature, as it requires minimal upfront investment and allows you to engage selectively when opportunities arise. However, it may also make you feel somewhat less in control of your innovation agenda. It demands patience and the decisiveness to act when the right opportunity presents itself.

Developing your innovation portfolio

The most successful innovators don’t rely on just one approach; they diversify across multiple strategies. While technology giants like Google and Meta have the resources to pursue all five strategies simultaneously, most organisations should aim to focus on at least three.

One effective model is to apply the 70/20/10 investment rule. Once you’ve identified your three strongest innovation strategies, distribute your resources by investing 70%, 20%, and 10% accordingly.

Remember, innovation isn’t a one-off project—it’s an ongoing portfolio of initiatives. By diversifying your approach and keeping a long-term perspective, you can develop an innovation strategy that fosters sustainable growth and keeps your company leading the pack.

The ability to innovate effectively can determine whether you’re setting the pace or struggling to keep up. By thoughtfully applying these five strategies, you can create an innovation ecosystem that propels your organisation forward, turning today’s ideas into tomorrow’s transformative solutions.

Discover more about CreateFututure’s Innovation Health Check Workshop.