The Innovation Eco System

Published by Grahame Cox on

Innovation is a risky business. Depending on whose numbers you believe, up to 90% of innovations fail. Improving your chance of innovation success isn’t easy and there is no one simple fix. However, experience suggests there is an ecosystem of activities/conditions that will improve success rates but you need to pay careful attention to every element of that eco-system: one weak link can send your idea into innovation oblivion.

Here’s an outline of my 10 point innovation ecosystem:-

  1. Get the Board on Board. These are the people who make available and protect the resources you need to keep your innovation programme alive when short-term priorities come knocking at teh corporate door. Is innovation mentioned in the corporate strategy? If the board isn’t supporting your efforts, you are probably best to stop now.
  2. Manage the Roadblocks. Unfortunately, in every organisation, there are people who for some reason or another are not big fans of what you are doing. Some think they should be running innovation, rather than you, some think innovating is a waste of corporate resource, time and effort. Whatever their reasons, these people can seriously derail your innovation efforts if you aren’t careful. Great innovators are also master ‘politicians’: they understand who these people are, and put time and effort into winning over the detractors and removing these roadblocks. The more encouraging news is that there are probably many more people who are local champions for what you do. Get to understand who they are too: harness their enthusisasm to help drive projects through the organisation and manage those ‘roadblocks’.
  3. Make sure you have an Innovation Strategy. Your innovation strategy needs to be aligned to, and contribute to, corporate goals? Your startegy should set out where you are going to innovate, where the profitable opportunity areas are? Also, are you looking for breakthrough, disruptive, game-changing innovations or smaller scale extensions to existing capability? What are the payback criteria your innovations have to deliver? How will you judge whetehr an idea is a success or a faliure? Does the organisation support developing new capability, or want you to use existing skills? Ideally, all of this is wrapped up in a signed off innovation strategy that neatly directs your ideation efforts and, once you have your ideas, allows you to sort the great from the good.
  4. Set out an innovation process. This doesn’t have to consist of a large manual, piles of documents and a complex stage-gate process…. but it might. Your innovation process simply needs to reflect ‘how we get things done around here’: it sets out who needs to be involved, when; it is clear about the sign off procedures and the criteria to be used for that sign off. At its ‘leanest’, your process can consist of very little. If your organisation gives you the freedom to do what you want, without the need for any sign-off of resources, marketing spend, development time etc., then great. On the other hand, teh business expects a detailed view of the opportunity area you have identified, a full business plan with detailed financial plans outlining investment, revenue, payback, costs………… then your process needs to reflect that. It might sound painful but I’ve worked on too many projects where we have gone a long way through development only for someone to bring the project team to a halt because the right people haven’t been consulted/involved/engaged at the right time.
  5. Focus on solving BIG problems. In my humble opinion, every successful innovation has solved a problem. However, its not as simple as solving any problem. To deliver a great innovation you need to solve a problem that’s big enough for the people who have that problem to be bothered enough to go through teh hassle of replacing a product or service they currently buy or use with yours. In today’s world, where we all have access to so many choices, most consumers manage this complexity by simplifying their choices to a relatively small portfolio of habitual purchases/services. Breaking into that ‘habit’ isn’t easy. Then not only does this have to be a big problem, it also has to be a problem you are best placed to solve. The last thing you want to do is spend your company’s time, effort and money establishing a new market/product group for someone with bigger, better resources and capabilities to steal that away from you.
  6. Go beyond the ideation session. Don’t get me wrong, ideation sessions are a great place to generate ideas. I have run, and still run, plenty. But they aren’t your only option. If you want to extend the quantity and diversity of ideas that solve your BIG problem, then amongst the other options you can choose are things like open innovation (there’s a whole world of ‘ideas people’ out there, spread actross the globe, who are happy to suggest solutions), innovation competitions (I recently worked with a group of university students to develop a solution for a client. Their ideas were insane…… but ingeneous, way beyond anything we created in the earlier ideation session) or even the good old, much maligned, suggestions box (Properly managed, this can be another source of great ideas). Think far and wide. Remember, you only need one fantastic idea. As the great Linus Pauling said: “The best way to have a good idea is to have lots of ideas’. He then went on to point out: ‘Most of them will be wrong, and what you have to learn is which ones to throw away.’ So, first focus on the quantity of ideas and then, using the criteria in your innovation strategy (along with a dose of experience and intuition), select the best to take forward.
  7. Refine your ideas. Rarely will that first idea be the best it can be. Create a system to test out your ideas, learn from the test, refine and retest. Launching ideas is an expensive business. Spending time getting it right, I call it ‘polishing’ your ideas, will payback manyfold in the future.
  8. Build the Right Team. Plenty of research shows that having a diverse team, will increase the range of ideas you’ll generate to solve the problem. Then, when it comes down to steering your idea through the development process, you’ll need a range of different skills in your project team. You may need different skills, different team membrs, at different stages of development and launch. Make sure you have the right people with the right skills.
  9. Launch it Well. Handing your idea over to someone who has no experience in taking new products to market risks putting all of your effort to date in jeapordy. Marketing new products is VERY different to marekting existing products – which in my book means that some members of your marketing department will be the wrong people to hand your product over to. Existing products and services have a known and understood relationship with their customers, there are lots of ‘knowns’ when it comes to marekting existing products and services…….. generally speaking, with a new idea, you are dealing with high degreees of uncertainty. Even if you have extensivly tested your new idea, life in the real world rarely mimics exactly those ‘lab conditions’. Marketing innovations requires you to be nimble in your marektign execution, adjusting launch plans and tactics as new data becomes available. Launching new products and services also demands different sales skills. So, in the same way, handing your idea over to some of the sales team could well result in failure. Make sure your sales team have the necessary skills too.
  10. Balance you innovation portfolio. Yes, you can ‘bet the farm’ and place all of your innovation eggs in one basket. I’ve worked with entrepreneurs where this is the case and its scary! Also, I haven’t met many larger companies who are keen on that level of risk. So, I suggest its a good idea to balance you portfiolio of ideas: some big bets and some smaller bets. There’s some great research that shows that, in general, firms spend 70% of their innovation efforts on ‘close to home’ innovation – and in the long-run, that delivers 10% of their total returns from innovation. On the other hand, these same firms spend 10% of their innovation time and effort on ‘breakthrough’ innovation – but that delivers 70% of long-term value. ‘Then focus on the bigger stuff’ I hear the bullish amongst you cry! If your business is happy with that, go ahead. I have found a balanced portfolio tends to get you further and keeps the ‘Board on Board’.

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