Three ways that any organisation can innovate

Many businesses see innovation as simply coming up with new products or tools, but for Reckitt’s Dr Angela Naef it is much more about mindset and culture

Angela Naef Reckitt chief R&D officer

Take a look through the roles on the executive boards of some of the world’s biggest companies and you’ll see many of the same titles. All have CEOs, most have CFOs, several have CMOs, but less common is the chief research and development officer. 

This is largely because many organisations don’t believe they need one. But having a C-level executive responsible for keeping the business and its employees at the cutting edge could be critical for business success.

That is why the consumer goods company Reckitt has Dr Angela Naef. A scientist by trade, Naef has a PhD in chemistry from the University of California, Davis, and has held director-level positions at manufacturing firms including The Dow Chemical Company and DuPont. She joined Reckitt, the company behind brands including Dettol, Durex and Nurofen, in September 2020, where she is responsible for overseeing new regulations and risks, leading a team of 3,500 people and, most importantly, driving innovation. 

“My role is centred on today – everything we have in the marketplace right now – but it’s also all about tomorrow,” she explains. “Where is the next thing coming from? What will the next regulatory change be? What’s the next consumer trend we need to see around corners for?”

Many businesses see innovation as ‘just’ product development, but Naef believes it is more important than that. In difficult macroeconomic conditions, a culture of innovation can be the difference between success and failure for organisations, regardless of industry or sector. Plus, there can be unexpected rewards in keeping a business and its workforce on its toes. 

Why does innovation matter in business?

At its core, innovation is about coming up with new process, ideas, services or products that can boost the bottom line. As Naef puts it: “Innovation is essentially about growth and all the different levers you can pull to generate growth,” says Naef. “Thinking about it in that way means it doesn’t matter whether you’re creating an internet-of-things solution or a retail service.”

Finding places to innovate, however, is hard. Research by the consultancy Boston Consulting Group shows that growth in what it terms ‘traditional markets’ plateaued in 2023, while newer markets, particularly those created by technology such as ecommerce, streaming media and smart energy solutions, are booming. If organisations cannot find ways to compete with, or participate in, these new markets, growth will be much harder to come by. 

According to BCG, the challenge is usually one of two things. The first is that decision-makers fail to get buy-in to invest in disruptive opportunities and therefore use what budget they have to make only incremental adjustments. The other is that they do invest, but the lack of a clear business case or sufficient knowledge means that they spend money on the wrong solutions. 

The key, says Naef, is not to get caught up in hype cycles and fall into the trap of investing in whatever technology is the newest or shiniest. “Innovation is about being creative to a problem that exists and driving value. It doesn’t always have to be new to the world.” 

Business leaders must identify new problems that their organisation can solve and seek out the technology that will genuinely help them do that. And then they must be brave enough to invest. In spite of macroeconomic challenges, BCG found that nearly 90% of the world’s most innovative companies plan to increase innovation spending this year. 

How leaders can embrace an innovation mindset

Creating a culture of innovation inside a business should not be difficult, but it does require a willingness to be humble and change. For Naef, there are three steps to achieving this. The first is putting the customer first. 

“At Reckitt, the consumer is at the heart of everything we do. They are the focus of all our critical disciplines and skills, and the thing in the middle that unites us all.” Many organisations claim to be ‘customer centric’ but it can be easy to fall into the trap of making tweaks and minor improvements to the product or service you already offer. Innovating means being able to predict what customers might want in the future and preparing to meet that need.

The second step is to become truly curious. “A growth mindset is a learning mindset,” Naef explains, warning that leaders must not allow ‘business as usual’ to blind them to new opportunities or ways of doing things. To develop that learning mindset, it is important to constantly ask questions and to be prepared to spend as much time working out what the right questions are as finding the answers. 

The third step is to build the right team. “It’s important to find smart, engaging, inspirational people everywhere you go and that’s what I look for in my leadership team,” says Naef. “I surround myself with leaders that are additive and complementary so that together we can do something that’s bigger than the sum of its parts.”

The role innovation plays in talent attraction and retention

If the competitive advantage offered by embracing innovation is not enough, there are other important reasons to put greater emphasis on innovation. One of these is talent retention, which is one of the biggest challenges currently facing businesses. 

At a time when pay rises or costly benefits may not be practicable or affordable for many companies, one key way to keep employees happy is through job satisfaction, for staff to feel like they are doing important work. While many involved directly in product innovation might be scientists, especially in a consumer goods firm, any member of staff who has spent time and effort honing their skills wants to have the opportunity to use them. The key to retention is offering up those opportunities. 

“It’s about having a really important problem to solve,” says Naef. “We solve those by appreciating and valuing what everyone brings to the table. Sales, marketing, supply chain and more – we take a very cross-functional approach where everybody has a role to play.” 

Allowing workers to challenge themselves and contribute to work that feels meaningful is, for Naef, the way to get the best out of them. “It makes work very personal,” she explains.

Three tips for embracing innovation in any organisation

For business leaders who feel up to the challenge, Naef has three pieces of advice when it comes to creating a culture of innovation.

Think like a scientist (and hire that way too)

When it comes to deciding how and what to innovate, Naef leans on her scientific training. “I have a hypothesis, a scientific method, based on a set of principles that apply to whatever problem we’re facing,” she says. “Then I put forward questions against that hypothesis and some will be validated and some will not. As long as I’m learning and the organisation is learning, it will continue to drive progress.” 

When it comes to bringing in new team members, Naef is looking for people who will contribute to this learning. “The spirit of creativity and curiosity is what I look for – what are the questions that they bring forward? The person who has all the answers usually isn’t very interesting.”

Stop thinking about failing

With the right team in place and a hypothesis to test, Naef’s next step is to reject – or at least reframe – the concept of failure. 

“I don’t think a lot about failing, there’s a fascination in business with ‘fail fast’ cultures, but I don’t think like that,” she says. “If you’re always learning with purpose then you’re constantly iterating. If you’re trying stuff and it doesn’t work, you’re moving forwards, not backwards. It’s thinking about failure in a more positive way.”

Aim for excellence

Shrugging off the concept of failure does not mean settling for mediocrity, however. “There is a point in every project when we need to make sure we’re winning more than we’re not,” she says. “You have to be excellent at what you do and you’ve got to know where your competitive advantage comes from.” 

This understanding comes from years of experience and expertise, but Naef believes it is just as much about mindset as it is about knowledge. “You have to be willing to say: ‘I believe I understand all these elements, but I am willing to experiment.’ Most of my teams don’t think they’re excellent but they are always striving to be excellent. It’s not about being perfect, it’s about giving yourself the opportunity to be confident and convicted but still humble and willing to learn.”