Innovation through Four15
What is innovation culture?
Innovation culture is the work environment that leaders pursue in order to support unorthodox thinking as well as its application. Organisations that promote a culture of innovation normally support the belief that innovation is not the province of top leadership but can come from anyone within the organisation.
It assess employees based on metrics such as competitive differentiation and value creation, instead of traditional metrics like revenue generation and on-time-delivery. In simple terms, a culture of innovation is an environment that supports creative thinking and advances efforts to extract economic and social value from knowledge, and, in doing so, generates new or improved products, services or processes.
When researching into Four15, we found that their innovation culture is quite simple as they portray the Mexican culture in everything they do. When asked what their innovation culture is, the response was "We live to innovate, we love the Mexican culture".
Four15 aims to come up with effective innovative ideas every month that will live on throughout the brands existence, for example, when the restaurant opened, they encouraged their consumers to have a tequila shot either before or after their meal by giving them a free tequila shot. This idea was innovative and it kept up to the Mexican culture of the brand. Four15 encourages all employees to come up with new ideas that will benefit the brand and help make it stronger, by doing this they ensure that employees are always interested in uplifting the brand.
Four15 believes that the power of a strong culture will definitely drive the business to success. The restaurant differs from its competitors because of the personalities of their employees as well as their style of customer service, this creates a distinctive experience for its customers, as customers are welcomed into a full Mexican theme when they enter the restaurant. Four15 strongly believes that a well-defined and supported culture makes decision making easier and quicker as it helps all stakeholders develop a shared understanding of what needs to be done, when they have to been done and how to successfully execute the plan.
Drivers of innovation
A continuous flow of innovation is essential for an organisation for it to remain and become a market leader. The drivers of innovation clash depending on the context of the situation, goals and values of the organisation.
The dominant drivers of innovation are:
Economic Drivers: “The study of how societies create new forms of production, products, and business models to expand wealth and quality of life.” The major drivers of economic growth are Adaptive efficiency and Productive efficiency.
Financial Drivers: Can be defined as the construction and familiarization of new financial instruments and technologies as well as institutions and markets. It involves product, institutional and process innovation. Its main drivers are Regulations and Technology.
Social Drivers: A social innovation is a novel solution to a social problem that is more effective, efficient, sustainable, or just than current solutions. The value created accrues primarily to society rather than to private individuals. The main drivers consist of exchanging ideas and values, the shifts in roles and relationships and integration of private capital with public and philanthropic support.
The main driver of innovation for Four15 is to “Keep Things Fresh”. They believe that keeping things simple but also exciting works best for them. They pay close attention to keeping the right leaders that will foster creativity in the employees they lead. Four15 also relies on their team to drive innovation in the business, as they believe that a group of people has more skills than just an individual. They focus on enhancing effective team dynamics to ensure that innovation is always running smoothly. A social driver for Four15 is depending on feedback from their customers as this is also what drives their innovation. Customers are able to develop new ideas and solutions to improve the brand.
Four15 does not have an innovation process that they’re aware about however, my colleague and I suggested a process that they could use in the future. An innovation process is crucial as it gives companies an opportunity to reinvent themselves to offer unique value to their clients and to manage innovation. There are three steps in the innovation process:
Step 1: The Search Step – in this step you look for new ideas to offer more value to your existing customers. This step requires a solid understanding of the industry and your target client segment.
Step 2: The Incubation step – is all about testing and growing ideas. An idea may look promising on paper but it does not mean that it will deliver the value that you expect. This step requires a trial and error approach. The aim of this step is to test value to find out in the real world if customers are willing to pay for a certain value that you are offering.
Step 3: Execute – this step is all about growing the identified value of a specific idea.
Innovation value chain
The innovation value chain is a three-phase process that includes idea development, idea generation and the diffusion of developed concepts.
Managers are required to execute six critical tasks:
Internal Sourcing
Cross-unit sourcing
External sourcing
Selection
Development
Companywide spread of the idea
These six steps can be divided into three phases where the focus shifts progressively.
Phase 1: Generate ideas Phase 2: Convert ideas Phase 3: Diffuse products
Across all the phases, managers must perform six critical tasks — internal sourcing, cross-unit sourcing, external sourcing, selection, development, and companywide spread of the idea. Each is a link in the chain.
The problem lies within companies often failing because they do not recognise that innovation is a chain that requires strength at every link to succeed
The innovation value chain can also assist managers to notice that a perceived innovation strength can turn out to be a weakness. Targeting only the strongest links in the innovation value chain may lead to debilitating the weakest parts of the chain, causing it to compromise the innovation capabilities in general.
Four15’s innovation value chain
Idea generation – Internal sourcing is when each team (waiters, managers, etc) at Four15 develop different innovation ideas within their team and then they collaborate with the other teams in order to develop a better idea, otherwise known as cross-unit sourcing, once this is accomplished, ideas are taken from customers (feedback and opinions) in order to better the original idea created within the brand which is known as external sourcing.
Idea conversion – selection of the ideas generated in the first step is important as the screening and funding of Four15 need to be good. But, no matter how well screened or funded, ideas will still be developed into revenue-generating products, services, and processes.
Idea diffusion - ideas that have been sourced, funded, and developed still need to receive buy in—and not just from customers. Four15 must get the relevant constituencies within the organization to support and spread the new products, businesses, and practices across desirable geographic locations, channels, and customer groups.
Stakeholders
Stakeholders are defined as any group or individual who can affect or is affected by the achievement of the organization’s objectives.
Innovation requires input and buy-in from both management as well as external and internal stakeholders. Innovation encourages engagement with multiple stakeholders beyond shareholders. Innovation is seen as key to find new solutions. Therefore, stakeholder engagement is imperative as a new solution to create innovations for sustainability in business practice.
Stakeholders of Four15 could be groups like students, consumers, accountants, investors, suppliers and manufacturers, basically anyone with a vested interest in the business. These groups of people will act as collaborative partners in making the innovation a success.
Barriers and Enablers
Barriers are known as an obstacle that prevents an innovation from taking place, for example, not enough funding, whilst an enabler enhances the possibility of the innovation taking place, for example, enough resources.
Barriers:
Leadership: The biggest barrier to innovation is the leader/ manager not being open to new ideas. Also, leaders who shoot down and discourage new ideas before comprehensively considering the idea, leads to demotivated employees and silencing of new ideas. The leadership at Four15 is a barrier as communication is very solemnly done with employees. There is more of an autocratic leadership style which therefore lessens the space for innovation at Four15.
Time and resources: Not being allocated enough time to actively engage with innovation, employees focus rather on their regular work than to spend time coming up with new ideas. At Four15 employees are focused more on keeping up with the culture (the theme of the restaurant) and therefore lack the time to focus on innovation.
Four15 identifies the unavailability of products in South Africa that are essential to run a Mexican Burrito Bar as a barrier for innovation.
Enablers:
Customer insight: A key enabler of innovation is to understand your target market and prioritising local consumers. Four15 rely on feedback from consumers and therefore when their customer gets the bill, they are required to give their feedback about the brand.
People and culture: Companies need to adopt a culture and mind-set that are willing to tailor products to customers' needs. Four15 is based on a Mexican culture, however they bring some South African culture into the brand in order for their customers to relate and to satisfy their needs.
Research and development: Companies must strike a careful balance between local relevance and global scale. Four15 have done sufficient research in keeping up with the Mexican culture but adapting it to South Africa, thus creating a great enabler for innovation.
Four15 is a unique restaurant in South Africa and therefore developing ideas for innovation is a lot easier for them than other restaurants.
References
The Ingenesist Project. (2017). A Definition for Innovation Economics - The Ingenesist Project. [online] Available at: http://www.ingenesist.com/a-definition-for-innovation-economics/ [Accessed 21 Mar. 2017].
Stanford Graduate School of Business. (2017). Defining Social Innovation. [online] Available at: https://www.gsb.stanford.edu/faculty-research/centers-initiatives/csi/defining-social-innovation [Accessed 21 Mar. 2017].
Lexicon.ft.com. (2017). Financial Innovation Definition from Financial Times Lexicon. [online] Available at: http://lexicon.ft.com/Term?term=financial-innovation [Accessed 21 Mar. 2017].
Harvard Business Review. (2017). The Innovation Value Chain. [online] Available at: https://hbr.org/2007/06/the-innovation-value-chain [Accessed 21 Mar. 2017].
SearchCIO. (2017). What is innovation culture? - Definition from WhatIs.com. [online] Available at: http://searchcio.techtarget.com/definition/innovation-culture [Accessed 21 Mar. 2017].
