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Volume 3.4 Table Of Contents
- Don’t keep innovation locked in a room
- Trend Watch: Innovation a top strategic priority despite problems with results
- Digging Deeper: Are you fostering innovation throughout your organization?
- Ask the Business Performance Expert:
Don’t keep innovation locked in a room
Recently, an executive told me about a special “innovation room” that his company built. The room is intended to inspire employees to generate ideas that can eventually be turned into new products. This raises two questions in my mind. 1) What unintentional messages are sent to those who don’t have access to this room? 2) Isn’t it equally as important for every employee to be innovative regardless of his/her position and function in the organization?
The initiative that I’ve described isn’t unique. According to a recently released survey (see “Trend Watch” below), increasing innovation is a major strategic priority for many companies across industries. Yet according to the survey, almost half of the executives are unhappy with the results they’re getting. One reason these efforts may be falling flat is the conflicted message that selective initiatives send to the organization.
I’ve found that when even the best practices for fostering innovation are confined to a specific group or function, your organization can run into what I call “strategic gridlock” - persistent problems that can cause progress to grind to a halt. The media is filled with case studies of companies whose employees develop great product/service ideas as a result of selective innovation initiatives. They are then inadvertently pitted against their peers in other areas of the company, who are rewarded in a variety of ways for maintaining the status quo. The result has been excessive conflict, reversed decisions, low morale, excessive turnover, and ultimately a persistent lack of innovation and loss of competitive advantage in the marketplace.
The most powerful way to avoid this pitfall and accelerate progress is for leadership to set the example by approaching your own job in a consistently innovative manner. This includes three foundational steps:
- Develop and communicate consistent definitions and measurements of “innovation” for the company.
- Customize the definition so that every employee across your organization can approach his/her own job in a way that measurably contributes to that same objective.
- Align this objective with people, systems, and processes so that all of the messages are consistent, and efforts in one part of the organization are not cancelled out by other parts of the organization.
Bottom line: In order for innovation efforts to succeed, they can’t be locked in a room used by selected parts of your company. When you view innovation as a business philosophy, value, and ongoing way of doing business, it will become part of the DNA of your entire organization. Not only will you achieve maximum return on your investment, but more importantly, you will achieve a sustainable competitive advantage in the marketplace.
Trend Watch: Innovation a top strategic priority despite problems with results
Spending on innovation has increased dramatically for the second half of 2006. The persistent problem is that these programs fail almost as often as they succeed. How can you get more of the results you want?
According to a survey released on July 19, 2006 by The Boston Consulting Group, innovation is the number one strategic priority at 40 percent of the companies they surveyed (versus only 19 percent in 2005). Seventy two percent of companies worldwide will increase spending on innovation initiatives in 2006, and 41 percent will increase spending significantly. The study was based upon responses from more than 1,000 senior executives from 63 countries and all major industries. Researchers also found that many businesses were having difficulty measuring innovation. The three metrics that these executives used were: time to market, new product sales, and return on investment.
What does this mean for you? If, like the leaders in this survey, you’re dissatisfied with the results of your company’s innovation efforts, the problem may not be what people are doing. Rather, the issue may be how you are evaluating success. For example, while the above metrics may work as company objectives, they are still too broad and far-reaching to measure whether innovation is occurring on a regular and meaningful basis. In fact, using these metrics alone could make you decide to change course just at the point where your organization is really making progress. This often leads to a roller coaster ride of new initiatives and what many people cynically refer to as “flavor of the month” programs. How do you avoid this roadblock?
I’ve found that just as when you’re taking a trip, defining metrics based upon milestones and checkpoints is incredibly helpful as an indicator of progress. A milestone is a major point for evaluating events and determining not only “are we on track” but “are we on the right track?” given our organization’s constantly changing reality. A checkpoint, on the other hand, is a smaller step along the way to a milestone that is determined by your own level of risk tolerance.
Bottom line: Setting a series of metrics at significant points along the way to your innovation objectives increases your ability to accurately measure if what “should” be happening is indeed what “is” happening. You can then make incremental adjustments that minimize the need for potentially unnecessary and time-consuming overhauls, and maximize the likelihood of achieving your objectives.
Digging Deeper: Are you fostering innovation throughout your organization?
Use this brief questionnaire
as a starting point to see what you’re already
doing well and where there could be room for improvement.
On a sliding scale (1=low through
5=high), rank the extent to which you agree with
each statement:
- We have clearly defined innovation objectives, based upon our company’s vision mission and values.
- We check for common but mistaken assumptions we may have made about our objectives, and the underlying organizational issues that are standing in the way of achieving the results we want.
- We check for aspects of our culture (values, beliefs and practices) that both advance and block innovation.
- We develop strategies and plans for innovation, and align them with people, processes and systems throughout the organization.
- Using a variety of channels, we establish ongoing two-way communication with employees, customers, alliance partners, outsource providers, suppliers and other external stakeholders to share our objectives as well as to gain their perspectives.
- We develop metrics for milestones and checkpoints in order to regularly assess progress and make adjustments along the way.
Interpretation:
- 25 - 30: Congratulations! Your organization is well on its way to achieving sustainable innovation.
- 20 - 24: With just a few adjustments, your organization is within reach of your innovation objectives.
- 15 - 19: Caution: your innovation objectives may be in jeopardy. Use this questionnaire as a starting point for taking early control of problems that could be building in your organization.
- Below 14: “Gridlock” could be seriously interfering with achieving your innovation objectives. Use this questionnaire as a starting point for addressing persistent problems and moving forward.
To discuss these and other questions you can use to evaluate the effectiveness of your strategy, contact Pam Harper at (201) 612-1228 or contact us.
Ask the Business Performance Expert:
Q: How can
I get my “non-creative” functions
(such as finance and procurement) to innovate
more?
A: The place to start is to determine
whether they share the same innovation objectives
that you have. Remember, every individual and
function throughout the organization can approach
their job in a way that supports innovation objectives.
For example, based upon a consistent objective,
individuals in procurement may evaluate and eliminate
non-essential steps in their business processes.
Or, they may develop a new business process that
supports the innovation objective. Also keep in
mind that the more each individual and department
is rewarded in ways that are meaningful to them
for adopting innovative approaches to their job
and business function, the more likely they are
to sustain this behavior over the long haul.
Quote: “Reality is merely an illusion, albeit a very persistent one.”
-- Albert Einstein (1879-1955) Physicist and Philosopher