For the past two decades, much has been made of “open innovation,” the concept of actively working outside the organisation's four walls to spark new ideas. Yet even though the business case for innovation has never been stronger, companies today still don’t innovate enough, and they derive limited value from their creativity. In a world where change is the only constant, how can enterprises nurture and embed a futurist culture into their way of working to create impactful innovations?

It's tempting to focus on the current market conditions, but organisations that look forward consistently perform better. A study cited in the Harvard Business Review found that firms with a long-term perspective significantly outperform short-term-minded firms after crises, increasing their market cap by 58%. Another study found that “future-prepared companies outperformed the average company with 33% higher profitability and 200% higher growth.”

Companies that succeed are those that adopt an agile, iterative approach to innovation. In a continually changing world, we crave simplicity, yet the future is complex. The best way to navigate this complexity and uncertainty is through prototyping new futures. By combining innovation with future thinking, businesses can accelerate their organisation's innovation and move from 'what now' to 'what's next'.

There’s no magic formula for adopting an innovative futures mindset, but five ingredients can put organisations on the right path.

1. Make it diverse

If looking into the future were easy, everyone would do it. To truly begin discovering new opportunities, there must be a willingness to celebrate diversity in backgrounds, beliefs, and ideas.

According to McKinsey, companies in the top-quartile for their executive team’s ethnic/cultural diversity were 33% more likely to have industry-leading profitability and 27% more likely to have superior value creation.

Companies must be willing to explore, uncover, and probe many different futures – including ones that seem irrelevant, unlikely, or wrong. Diversity in teams and thinking allows businesses to deal with the uncertainty of looking ahead. Leaders should ask: What different perspectives are included?

2. Make it participatory

An innovator's role is not to come up with the final answer. Instead, it is to facilitate participation, inclusivity, and collaboration. Breaking internal silos and facilitating co-creation with broader ecosystems are vital for defining futures.

McKinsey found that "highly inclusive organisations generate 1.4 times more revenue and are 120% more capable of meeting financial targets. Inclusive organisations are also 1.8 times more likely to be change-ready and 1.7 times more likely to be innovation leaders in their market."

When companies democratise creativity and decision making, they create futures that are not limited to the minds of a few but to the imagination of many. A participatory innovation process increases the likelihood that the futures have broader relevance. Leaders should ask: Whose future needs are being addressed?

3. Make it tangible

Tangible prototypes are a catalyst for change. Through combining technology and design, prototypes can exemplify complex topics, create shared understanding, provide a clear direction, and spark informed discussions.

Organisations should embrace visionary and concrete prototyping to avoid the common pitfalls of misguided innovation. More than 40% of start-ups die because no one wanted what they built, and large corporations invest millions in ‘innovation initiatives’ that end up forgotten by year-end.

Few have the desire or time to read a 200-page report. However, just like a sci-fi film, a tangible prototype provides multimodal experiences that are easier to understand, relate to, and evaluate. Leaders should ask: How do we make the future concrete, relatable and relevant?

4. Make it continuous

The most disruptive innovations are not sudden epiphanies, but rather a discovery amid a continuous innovation process. Businesses need a collaborative culture, an open mindset and a high level of trust, to create a safe space for vulnerable, early ideas to flourish. Embrace iterative processes. Be willing to experiment and have fun. Acknowledge dependencies but dare to go rogue.

We can all agree that most innovations fail. But those that succeed are worth fighting for, as they can genuinely drive radical change. Leaders should ask: How do we get a commitment to iterative processes?

5. Make it matter

Technology forces us to continually adapt to an accelerating world. In this vortex of change, our own (and our customers') search for meaning has never been greater. Innovations are expected to be sustainable and provide a smooth customer experience through speedy, convenient service. Yet convenience should be weighed against broader (and potentially unintended) implications, and whether the innovation delivers meaning.

A Harvard EY Beacon Institute survey found that “companies with a strong sense of purpose are able to transform and innovate better.” A separate study found that 53% of executives at companies with a strong sense of purpose said they successfully drive innovation and transformation efforts, compared to only 19% who reported success at companies that had not thought about purpose. Leaders should ask: How can we create positive value for people, planet, and profit? 

Mixing the Five Ingredients

When we look ahead, change is the only constant. But from a crisis arises creativity: novel ideas and new mental models. To generate the most value from innovation and future thinking, companies must remember to make it diverse, participatory, tangible, continuous, and meaningful. Creating value by marrying innovation and future thinking is not as easy as flipping a switch, but mixing those five ingredients empowers companies to shift their thinking from wondering ‘what now?' to imagining 'what’s next’.