How managers can improve the context in which innovation occurs: a focus on organisations in the D.R.C.Read Now
Innovation is an important and widely practiced business activity, so it is helpful for managers to know what actions they can take to make it more efficient. Some actions work mainly at individual stages of the innovation process. Other actions, however, are effective throughout the innovation process, and favourably change the context in which innovation occurs. Some of these actions are shown in table 1 and will be examined in this blog post.
Table 1. Actions favourably changing the context in which innovation occurs
The blog post will pay particular attention to innovation in the Democratic Republic of the Congo (D.R.C.), using examples from the country and examining how conditions there change the actions that influence innovation. Some of the conditions which we will look at were identified as major constraints on D.R.C. business operations in a World Bank survey in 2013 . The conditions are resource constraints and high levels of political risk. We will also consider how rapid market growth changes the actions, because the D.R.C. economy has grown rapidly in recent years.
Motivating people to innovate
Managers can help innovation by motivating people to take part. One way they can do this is by encouraging change through their words, either informing people of the opportunity to innovate or directly encouraging them to innovate. For example, the interim governor of the city of Kinshasa, Clément Bafiba, urged in March 2019 the creation of agricultural value chains, to make products from the DRC more competitive and to reduce dependence on foreign food .
Another way of motivating people to innovate is by providing the right rewards to them. The rewards may be financial gain, improved skills, recognition, prestige, professional advancement, power, enjoyment of participation, and social benefits. An example is the prize for financial innovation launched by the Central Bank of the Congo in 2019 , which provides prize-winning innovators with financial and technical support for their project. Another example is the speech given by Benjamin Nzailu, the council president of the ONEC group of accountants in Kinshasa, which recognised the importance of the work done by young accountants to promote good governance .
In the D.R.C., companies report resource constraints as a frequent problem, and they may prefer motivation approaches which require fewer resources. Specifically, they may avoid offering financial rewards paid before an innovation is successful. Offering financial rewards dependent on an innovation’s performance may be one approach for working around resource constraints. Alternatively, rewards for innovation could be made dependent on general company performance, an approach which recognises that innovation may not succeed even if it is well done.
Focussing on customer or end-user requirements
Managers can help innovation by keeping the organisation’s innovation effort focussed on the requirements of the customers or end-users. One way managers can maintain focus is by including a clear statement of the requirements in the organisational goals, or by communicating who the customers are or what their requirements are. For example Congo Science Challenge held in June 2019 has as its stated aim to promote productive exchange of ideas of a scientific or public interest nature [5, 6, 7, 8].
The D.R.C. market is rapidly growing, so it is even more important to maintain customer focus, as new markets and opportunities can emerge quickly, and current markets can change quickly too. Managers may want to regularly brief their employees on market changes, and relay relevant new information as soon as they receive it.
Establishing connections between innovators and other people, groups, and organisations
Managers can also promote innovation by establishing formal and informal connections between innovators and other people, groups, and organisations. The connections allow ideas to be exchanged, increasing the range of ideas available for employees to recognise and develop innovative products and processes. The connections also help with the exploitation of opportunities by suitable partnerships and marketing. For example, in the D.R.C. there are forums and networks to promote innovation in health and agriculture (for example with the non-governmental organisation CLEJUPS ), in markets (for example the Grand Market of Congolese agriculture and craft ), in scientific ideas (for example Congo Science Challenge ), and in company cooperation and finance (for example Afrobytes and the Congo Business Network ).
The D.R.C. market is rapidly growing, so it is even more important for a company to establish connections with consumers, potential consumers, and other organisations. Connections help a company respond to the emergence of new markets and changes in existing ones. A manager may actively maintain current connections and establish new ones, and ensure that there are frequent and regular flows of information along them.
Companies in the D.R.C. report political risk as a constraint on their operations, so connections with politicians or politically-aware people may be important as sources of information about potential political changes. The companies will be better able to respond if they have early warning of potential changes. There may also be increased business opportunities available to politically well-connected companies. However, there may be disadvantages from direct connections with politicians, depending on the demands that the politicians make to the company. When faced with political risk, wide general connections may also be useful, to provide opportunities for business protection and maintenance in the event of adverse political outcomes.
Involving a wide variety of people in innovation
Managers can also promote innovation by involving a wide variety of people in it. People in a diverse group are likely to identify more opportunities for innovation, and have the skills and personal connections to develop products and processes in response to the opportunities. An example of encouraging a wide variety of people to innovate is the pair of conferences organised in the D.R.C. in 2019, to find ways to use new technologies for communications relating to an outbreak of the disease Ebola. The conferences were held in the west and east of the country, and invited participation from students studying medecine, journalism, communication, and computer science. Students could also enter themselves directly into the conferences through a website [13, 14, 15, 16].
As the D.R.C. domestic market is rapidly growing, involving many people in the innovation process has additional importance. The market growth will bring a large and quickly emerging set of commercial opportunities, and a large group of innovators would be more likely to have the skills and knowledge to respond to them than a small group.
Further, as D.R.C. companies are often concerned about resource constraints, involving a wide variety of employees in innovation has an extra advantage. With constrained resources, access to external sources of knowledge or skills may be unaffordable, and using expertise within the company can bypass the problem.
Making innovation teams function well
Managers can help innovation by ensuring that an innovating team works well. Managers can make teams work well by providing a clear aim, giving members clear roles, and ensuring that all members can contribute significantly to the team’s work. An example of an innovating team with clear roles is the team which introduced traffic robots in Kinshasa [17, 18]. In the team, the leader took on responsibility for organisation and project selection, while other people in the team were responsible for technological proposal and development.
Choosing a suitable structure between the management and innovators
Managers can also help promote innovation by ensuring that the organisational structures connecting the management and innovators are suitable. Managers often consider what control they should have over the innovators’ work, and whether the relation should be expressed in a formal relation. What’s suitable will depend on the organisation and the innovation. For example, the government of the D.R.C. chose a formal but decentralised relation with the organisations who are producing plans for development of the Inga 3 hydroelectric project in 2018 . The formal written relation provides evidence to the organisations that the government will exclusively and seriously consider their plans, incentivising them to invest in the planning stage with less risk, and helping the project to move forward. The decentralised relation allows the organisations to produce plans without detailed government constraints, which is advantageous because the technical expertise is with the organisations.
The concerns that D.R.C. companies have about political risk may alter their preferred contract structures when they are working for state entities. Companies may be exposed to default on contracts or invalidation of the letter or spirit of the contracts. They may therefore prefer highly formalised arrangements that specify a full set of remedies in the event of default, and a jurisdiction in which the claims are readily enforceable.
Setting measures and objectives for the innovation process and conditions
Managers can also help innovation by setting measures and objectives for the innovation process and conditions. Measures describe one or more parts of the process and conditions. The measures and objectives may relate to innovation inputs (such as investment in innovation, and connections with other organisations), innovation activities (such as the number of ideas generated, or the number of new products sold), and innovation outcomes (such as profit from new products). An example is the objective of satisfactory planning for innovation in the Inga 3 hydroelectric project, which was set by the D.R.C. government in 2018 . Other examples are the measures of development costs, development time, extent of technology introduction, and additional products made using the innovation (in the form of new copper production) in the Kamoa-Kakula mines, which were set by the company Ivanhoe Mines in 2019 [21, 22].
Rapid market growth in the D.R.C. increases the relevance of certain innovation measures and objectives. Getting detailed and timely market information, and then innovating quickly, are both important for performing well in a rapidly growing market, so measures and objectives that reflect these activities are highly relevant. For example, the time from first ideas to first sales of a product could be a suitable measure, and an objective could be to keep this time under a year.
The resource constraints that often concern companies in the D.R.C. also affect the choice of innovation measures and objectives. Operating within a tight budget, raising finance, and accessing resources are important when a company faces resource constraints, and its innovation measures and objectives may give extra emphasis to these activities.
Setting an innovation strategy that is suitable for the organisation
Managers can help also to promote innovation by setting a strategy for innovation that is suitable for the organisation. One way they can set a suitable strategy is by ensuring that the strategy is consistent with their organisation’s skills and interests, and is also consistent with market demands. For example, the international clothes retailer Etam chose a strategy where they created a new business in Kinshasa in 2019 that does the same activities as its businesses in other countries, and that is in a growing market .
The rapid market growth in the D.R.C. influences strategic planning for companies in the country. Future growth in the market alters demand for a company’s goods and services, affecting the company’s plans for development speed, type of good produced, and other aspects of its innovation process.
The resource constraints reported by many D.R.C companies should also affect their strategic planning. The constraints mean that they have limited ability to access resources, and so their ability to fund and support future operations, which should be reflected in their plans.
Political risks are a concern of D.R.C. companies, and their strategic planning should reflect the concern. Political events may affect the company, its partners, or its markets in various ways, and a company’s planning should consider potential outcomes and the best responses to make if they occur.
Another way that managers can set a suitable strategy is by balancing their organisation’s creativity with the capture of value from ideas. Creativity is the generation of new ideas that could address a problem or demand, while value capture is the act of getting social or private value from these ideas. An organisation can maximise the value that they get from their innovation by ensuring that they have both a good level of creativity and a good rate of value capture from them. An example of a balanced innovation process is the process run by Filip Kabeya, the president of the Fondation Lumumba Lab, a non-profit organisation providing training and development support for digital technology in the D.R.C. He has introduced numerous organisational innovations, including the Fondation Lumumba Lab itself , a meeting space for innovators and entrepreneurs [25, 26], a mobile programming workshop for women , a bimonthly conference on digital innovation , a group of computer programmers offering free training , a developer group , and other groups and events relating to digital technology . He also uses the innovations to deliver social and private value, with 3,000 children and many adults trained in digital technology in 2018 .
To summarise, there are a number of actions that a manager can take to increase efficiency throughout an innovation process. These are motivating people to innovate, focussing on customer or end-user requirements, establishing connections between innovators and other people, groups, and organisations, involving a wide variety of people in innovation, making innovation teams function well, choosing a suitable structure between the management and innovators, setting measures and objectives for the innovation process, and setting an innovation strategy that is suitable for the organisation. Managers should also consider factors in the D.R.C. which influence the way that the actions are applied. There are many examples of Congolese organisations that are already implementing these actions, and there will be plenty of opportunities to use them in the future.
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...World Bank Enterprise Surveys, 2013. Democratic Republic of the Congo. Available at https://microdata.worldbank.org/index.php/catalog/2026/study-description, and downloaded in May 2015. The pseudo-code is “table m1a”.
7/7/2020 07:39:10 pm
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The blog and site are written by James Waters. He is a British economist.