The Basis of Your Innovation Program – Five Key Points
There have been written been articles on how to organize innovation within the corporate environment of larger companies. However, still few companies actually manage to successfully launch and maintain their ROI; the Return on Innovation.
Five key points that should be at the basis of your innovation program:
1. Commitment from the top
Now this may sound obvious, but by commitment I do not mean having a green light on your innovation program. Launching new businesses means eating your own business before someone else does. Thus, it will get challenging and the corporate antibodies will probably try to kill your new ideas. The top management needs to not only fully support the innovation activities, but also embrace the program and take responsibility to make it successful. You will need their help to break down the internal barriers if needed (which it will!).
2. Have a separate entity in which you run the innovation program
The easiest way of killing new ideas is by applying traditional KPI’s. Hence, you need to find a way to set up a different set of KPI’s that fit your innovation strategy and ambition. To ensure you are not bothered with the ‘old’ ones, having your innovation program sit in a separate entity with its own KPIs and a direct budget from the board makes a huge difference. This not only shows your organization takes innovation seriously but also provides you with the needed autonomy to develop those potential new ideas.
3. Make sure there’s a formalized process in place, with a focus on results
Innovation is often seen as creativity and generating new ideas. I’ve encountered many companies that struggled what to do with these ideas. You need a formalized process in place to ensure you select the ideas that are the most potential and provide a clear understanding on the next steps to the people developing it. Traditional models like Coopers Stage Gate work well for some, others use other approaches. What matters is that you guide your ideas through a pre-determined funnel that is flexible enough to explore different directions of new ideas but at the same time is rigid enough to steer and pull the plug if needed, all with a clear end result in mind.
4. Find the right external partners; you won’t be able to do it all alone
As markets are changing so rapidly, it is simply not possible to keep track of and be an expert in everything that’s happening. Chesbrough described it back in 2003 as open innovation, whereas using external sources nowadays gets more significant than ever. It’s all about finding and co-creating with the right parties; think startups, universities, thought leaders and last but not least your (potential) clients!
5. It’s all about the people, not so much the ideas
This is maybe the most important one. Most companies I talk to focus on the so called ‘idea management’. My experience is that the person behind the idea is far more important than the idea itself. You can have the most brilliant idea, but with an average idea owner or team, it won’t even be close as successful as an average idea with a great, passionate team. Perseverance and passion of the idea owner / developer is key to get your new ideas developed and commercialized. Intrinsic motivation and belief in an idea is key. Generating loads of ideas as a goal is not.
On a final note, remember this: R.O.I. (return on innovation) = Creativity x Governance x Perseverance, whereas 20% go equally divided between the first two and 80% of your efforts fall in the latter category!
image credit: cedardoc.com
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