Enterprise Innovation: A Key to Untapped Business Growth

"I'm tired of all the negative news. I'm tired of hearing about how bad things are. We always complain about things that are outside of our control. Well, you can't do anything about that," said Mark Gumz, CEO of Olympus Corporation of the Americas, during our recent interview.

I couldn't agree more. So what should we be doing, Mark?

"You should be focusing on things you can change. You've got human capital. You should be investing in helping them come up with better ways to do things. The status quo is the greatest inhibitor to growth. Enterprise innovation is something that's within our control as an industry and as a nation."

Gumz is so fired up about this you'd think he's discovered the key to untapped hoards of riches and prosperity. Well, maybe he has. Hoards of America's top executives seem to think so.

According to a Harris Interactive survey of Fortune 1000 executives, 94 percent said enterprise innovation is key to driving business growth and profitability, while 85 percent said it's important for attracting and keeping talent, brand prestige, and product innovation. That, to me, sounds like a huge opportunity.

In case you were wondering, the survey defines enterprise innovation as "Transformative business processes, practices, organizational planning and models that enable a business of any size to operate more effectively, profitably, and/or competitively."

Ironically, only about a third of those surveyed said their company actually promotes enterprise innovation through funding, education, or brainstorming. And more than half reported that their company has no team, process, or system for fostering enterprise innovation. Sad, but true.

So why the big gap? Most executives site pressure to achieve short-term goals and quick results as the biggest barrier to enterprise innovation at their companies. Somehow, CEOs have to figure out how to bridge that gap since, according to the survey, 92 percent of respondents agreed that the chief executive plays a critical role in creating a culture that fosters enterprise innovation.

During our interview, I challenged the enthusiastic Gumz to provide BNET readers with a couple of compelling examples of enterprise innovation at Olympus. As you can see, he didn't disappoint:

We have a program where we hire people right out of college, send them to a boot camp, then place them in four six-month assignments with a mentor to help them acclimate from the academic world to the business world. Since we're making a big investment in them and we want them to be successful. We call it our Fellow Program.

Well, we have a category of medical devices used for retrieval of foreign material in the esophagus - for when children, or even adults, swallow something that gets stuck. That product category had been mostly overlooked, so we gave it to a fellow and said, "you own it, develop a business plan and do something with it." Two years later, it's a $6 million business.

That may not be a lot in a multibillion dollar company, but let me tell you, the return on investment is huge. And what if you could grow revenues like that by tapping into unexplored areas in all your low-performing product categories? Well, you bring these young people in and they don't think they can't, they do.

When we first introduced the Fellows program in 2004, most of our managers stood on the sidelines. They didn't get it. Now we have people standing in line for Fellows.

Now, here's an example of how companies can look at their business and determine how to bring more value to their customers. You know, the operating room is the most expensive room in the hospital, except for the emergency room. Well, we actually know a lot about how to operate more efficiently.

We're currently applying for FDA approval for clinical digital pathology, the ability to send a clinical slide over the Internet. During a surgical procedure, a surgeon could take a biopsy and send it to a pathologist anywhere in the world to get a second opinion - do I take out more or not? That will ultimately be a huge cost saver. Ultimately, enterprise innovation has to come down to return on investment.

If you stop and think about all the cost in our health care system, if every company practiced enterprise innovation and helped customers lower their costs, I think that would be huge. I bet you if I sat down with the CEO of any company, I think we could find ways to be more effective, lower costs, increase profits, and return more to shareholders and reinvest so we create more jobs.

Have you had any interesting run-ins with enterprise innovation at your company? Tell us your story.

Update 11/18/10 8:52 am PST: modified paragraph six of Mark Gumz quote regarding "FDA approval"
Image CC 2.0 via Flickr user ElectronicFrontierFoundation