Developing structures to foster innovation
“The innovation mix across your business will place different demands on the business in terms of the resources required and the processes to support the different initiatives.”
Very few businesses can be good at all three innovation types and those that are successful at getting the mix and delivery right achieve this by respecting the very different requirements of each and having strategies and operational processes to support each.
The key considerations when looking at this are:
1) What processes do we have/require to support the innovation strategy and mix?
The innovation value chain is, at its heart, a fairly simple process. Frequently over-complicated by the nature of any given business and rarely aligned to the true strategy, goals and portfolio mix within the business (even where these exist!).
There are 5 really key components from which additional complexity may branch. Semantics, terminology and nuances aside, having these steps in place will provide the underlying process to help steer your internal processes;
i) Capture ideas
A culture of contribution is essential to the effectiveness of the innovation process, yet processes or tools to enable this are often neglected or poorly implemented. Commitment is required across the innovation process end-to-end. Idea capture and the adoption of idea management solutions and services are becoming more prevalent. Gartner, in their 2011 Hype Cycle for Emerging Technologies, saw this as about 2-5 years away from true mainstream adoption, with key technologies now becoming increasingly prevalent. Idea management systems are making the idea capture process more social and collaborative within organisations, enabling them to gather more ideas and include more people in the idea generation process.
ii) Evaluation and selection
Selecting which ideas to progress can be very complex. Evaluation criteria vary significantly by organisation, by complexity of the ideas and by the type of ideas being considered. Transformational innovation by its very nature would typically involve more upfront time and effort in terms of the evaluation and selection phase than, for example, core incremental change ideas. Idea management systems through their collaborative platforms are being used to help with the initial screening of ideas, with the organisational crowd able to vote on the ideas they most like.
The process for idea evaluation should be defined by the size and complexity of the innovation under review and its positioning within the innovation mix. Review boards should be in place that are cross-functional and objective, are fully appraised of the underlying strategy and empowered to make decisions and back up those decisions with budget, resource and commitment.
The decisions made in this stage are potentially very costly to the business if incorrect and time and process should be dedicated to ensure a high proportion of decisions made at this stage are informed and backed by the business as a whole.
iii) Proof of concept or pilot
By this stage there is considerable sunk cost for the business in terms of time, potentially cost and also opportunity cost. It is sometimes counterintuitive to think that before anything is built or done that there is already a significant sunk cost. However, failure to invest time up until this stage will result in greater risk and cost later in the process.
At this stage caution and control are the name of the game. Having processes and procedures in place to allow for proof of concept development or piloting of the proposed solutions help to mitigate risk, test hypotheses and help to give confidence in the idea’s validity and applicability prior to further investment.
iv) Launch and implement
Launch and implementation is a project rather than an event. The roll-out of a new innovation should be communicated and explained to the organisation, it should be celebrated to recognise the success and those involved, especially where goals have been met around delivery on-time, on budget etc. Celebrating and recognising success will drive a culture focused on this and innovation will become more virtuous within the overall organisational culture.
v) Nurture and measure
The roll-out of innovative new products or services can often be seen as the climax of the innovation program. However, it is important that launch is not a stand-alone event. Significant investment has now been made and it is critical that the new innovations are a success. Rarely will the first launch be perfect, evolution, evaluation and nurture are therefore critical. Phase 1 should be a listen and learn phase, ensuring that there are mechanisms for feedback from end-users and mechanisms for evaluating this feedback are essential. Phase 2 will be evolving and learning to enhance the new innovations and frequently incremental innovation to build on what was delivered will persist for many months or more after the first release. The investment should not stop as the project is delivered.
The business case and other decisions made during the evaluation phase should also by now be starting to be validated. It is important that the mechanisms and tools are in place to measure the business impact at each stage of the process and tracking should be on-going throughout.
In the next of the series we look at what is needed to support these processes.