Innovation is the lifeblood of business growth. Innovation management is also a process; a means of getting the right product to the right people at the right time.
Yet all too often innovation management doesn’t work well. It can be uncoordinated, out of sequence, either cutting corners or over-engineered. Innovation initiatives often start with generating broad ideas out of context. Heavyweight processes bring the deadweight of bureaucracy. Agility is stifled by too much control. In short, innovation management is often too complicated.
Innovation management should really be very simple. In fact, I think it is so simple that it can be described in a blog post, it doesn’t need a book.
It has three main parts. The first is WHERE DO WE WANT TO GO?
Innovation targets and priorities should cascade from strategy, aligned with the corporate direction and should be a key part of helping the company arrive at its desired objective. Ideally, each project can be identified with an explicit part of the strategy.
Many companies are, of course, exploring radical alternatives for the future, often in segregated parts of the organisation that work to different success criteria, leading to organizational ambidexterity. It’s fine to pursue these options, even if the initiatives being explored deviate from the current strategy, as it should be an explicit part of that strategy to build new areas of business.
The next part is WHAT DO WE NEED TO GET THERE?
Innovation structures need to span the traditional hierarchy of R&D, Marketing etc. The organisation and governance should allocate clear responsibility and avoid the temptation of consultative democracy with one person, one vote.
Much of the innovation that changes the game can be traced back to government investment in fundamental science. With some exceptions, this is not an industrial responsibility. However, every company should assess the extent to which it needs to invest in its own science and technology, resulting in IP to underpin future business; whilst resisting the temptation to build technology for technology’s sake.
It’s also important to build capability in the areas essential for delivery of the innovation strategy. This could be new technology, manufacturing infrastructure, new skills, geographic expansion. The new capability is likely to be internal, but can also be complemented by strategic alliances and open innovation.
It is fundamental to understand the consumer and customer. This doesn’t just mean answers to a “what would you like” list of options. It needs a fundamental understanding of needs, beliefs, habits, desires, often based on ethnography. This is the stimulus for insights, a level of deep understanding which then stimulates the generation of novel ideas.
Whilst ideas in isolation are worthless, great ideas provide the core of future competitive advantage. All too often though, innovation starts with a call for ideas, often in crowdsourced competitions. Generating ideas out of context is like driving without a destination. It’s manoeuvre, signal, mirror. The context of strategy, technology, capability and customer aligns the ideas into the sweet spot of desirability, feasibility and viability.
Idea generation should then be nurtured and stimulated using diverse methods, inputs and people. Network to find chance collisions. Avoid the comfortable option of the same people around the same table facing the same challenge – you’ll get the same result.
The final part is LET’S GO.
Ideas and projects should be prioritised in an innovation portfolio. This should have both strategic and operational components. The innovation portfolio should ensure alignment to strategy and optimal allocation of resource.
Metrics are inextricably linked to the portfolio; they should not be overly complicated, and should focus on guiding decisions and output.
A simple, light-touch stage-gate system should be in place, with the process there to serve the projects and not the other way around.
The “LET’S GO” phase of innovation management should ensure real excellence in execution, a strong focus on quality and performance; and be in continual touch with users to validate the product or service.
Following first launch, whether that is a “soft” version or full-scale, feedback and learning mechanisms should be in place to gather key information. You can then optimise and update rapidly.
There are, of course, other ways to structure innovation management, but they don’t need to be complicated. In fact, it’s so simple I even have room for a summary:
Where do we want to go?
- Align innovation with strategy, including both exploitative and explorative options.
What do we need to get there?
- Invest in technology and capability.
- Truly understand the customer to generate insights.
- Nurture idea generation in context.
- Use the portfolio to align with strategy and optimise resource allocation.
- Use output metrics that guide decisions.
- Ensure the stage-gate system is light touch.
- Implement excellence in execution.
- Learn from first launch to optimise.
As Einstein said, “things should be made as simple as possible, but no simpler”. Innovation management is the same – simple, isn’t it?
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Kevin McFarthing runs the Innovation Fixer consultancy, helping companies to improve the output and efficiency of their innovation, and to implement Open Innovation. He spent 17 years with Reckitt Benckiser in innovation leadership positions and also has experience in life sciences. Follow @InnovationFixer