When I talk with the business leaders and heads of strategy across organizations, the common challenge that they seem to face is to translate ideas into business profits. This very dilemma led me to delve deep on this topic. And, I noticed that there exists a ‘generic’ outlook regarding innovation, which is- Innovation is everybody’s business.
My point of view is – Yes ONLY for those doing incremental innovations such as cost-effective production, cheaper logistics, continuous improvement etc. While, ‘Break-through innovations’ CAN’T be everyone’s business.
Organizations, right at the outset, need to have complete clarity about the path they wish to take regarding innovation.
Remember “Innovation is a full-time job”. It simply can’t be done on a part-time basis. Also, skills needed for ‘Innovation’ are different from those required to run a core business or even for that matter a company’s existing product development department. Hence, if your manager has dual responsibilities of running your development lab and building innovation, means this is a sure sign of a failure! For path- breaking innovations to be a reality, you need to have an ‘Innovation’ leader with a dedicated taskforce and allotted finances.
Another significant element of succeeding with Innovation is effective handling of “Innovation killers”.
Here are some of the ‘innovation killers’ I've observed, that dramatically reduce return on investment (ROI) on innovation. Read on and checkout if your organization hosts any of them-
'We welcome all new ideas' - This is one of the suicidal innovation approaches. Leadership should clearly inform ‘what not to do’ as once constraints or boundaries are placed, the team knows what innovations to focus on i.e. innovations are more strategic and happen not ‘by chance’.
"What is the NPV?" - Asking for a NPV information or for that matter any financial metric at the time of onset of the innovation project is again self-immolation. Instead the acceptance could be based on customer needs, trends etc.
"We are confident since we have lot of quantifiable industry data" - Industry reports are great to understand market landscape but customer needs have to be understood and documented only after spending quality time in the market to conduct the market research that helps to identify the unmet customer needs and key business model levers.
"Our brand and technology are better'- Instead ask ‘What is the unmet customer problem?” Secondly, do your brand and technology allow you to satisfy your customer’s problem better? If the answer is not an unequivocal yes, then go back to the drawing board.
"This will never work" - Typically teams in most organizations teams can be split into four main categories:
Innovation enthusiast: these are people who dislike maintaining status quo. They always like to take risks and seek new heights.
2C Profile-ist: This comprises majority people who are comfortable with status quo. However, with coaching and convincing (2C) will tend to be supportive and accept moderate changes.
Followers: This group doesn’t have any specific opinion. They simply tend to follow the majority route per se.
Nay sayers: These people constantly pose discouraging comments and excuses at every instant a new idea is presented. In an economic era where continuous improvement and innovation are lifeline for businesses, such ‘Nay sayers’ might turn out to be more dreadful than an under-performer.
Below are some methods I've successfully employed to effectively handle Innovation killers–
- Demonstrate the damage they cause.
- Stop excuses and limit destructive criticism.
- Work hard to build an organizational culture that supports innovation.
- Get buy-in and ownership from business unit managers.
- Always have a widely understood systems-wide business process.
- Tie ‘Innovation’ to ‘Company strategy’.
- Spend enough resources on training and coaching Innovation teams.
- Create an ‘Idea management system’: if necessary, use external experts to evaluate ‘Innovative concepts’ before allotting dollars. Set effective idea acceptance criteria and metrics in advance.
You can no longer expect to lead the pack in your industry simply with incremental continuous improvement efforts. Instead, you need to raise the bar and develop a business process that draws’ Continuous rapid innovation’.
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