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The Little Book of Innovation – Chapter 4

WHAT DOES IT TAKE TO MAKE INNOVATION WORK IN BUSINESS?

Implementing innovation into a business, negotiating real & perceived obstacles in the way can seem a daunting task, but with careful planning & persistence your reward will bring long-term profits.

Top Ten Tips for Success

1. Where to start: Leadership & Ambition

Most business leaders tend to recognise need for innovation & know where they want to be, but how to get there? R&D language is often alien in the boardroom, leading to frustration & miscommunication. In our experience organisations that succeed invariably have three key things in common:

> Strong Leadership & a clearly articulated & ambitious vision – creating the need for an innovative culture

> Company KPI’s that incentivise innovation

> A seat at the boardroom table

2. The “LEAN” Innovation Audit

Measure your innovation capability versus your competition & your customer expectation. Set out the following metrics to audit your capabilities & support delivery of your vision:

> Innovation strategy

> Creativity & idea management

> Portfolio management

> NPD implementation success rate

> People structure, performance capability of Innovation teams

> Service innovation

>Process innovation

> Technology

3. Organisational Design: does your structure reflect your ambition?

The correct structure to reflect ambition is vital, key innovation studies have shown the following edicts support innovation delivery:

> If innovation is vital, give it a seat at the table

> Align senior team behind the structure

> As leader, make it part of board agendas

> Invest in your team: the right people drive the right results

4. The burning platform: What is the cost of not innovating?

It’s easy to ignore things we don’t understand or things that seem impossible. Build a business culture that allows ‘risk without retribution’. The boardroom need to understand the potential positives, reward this & equally the cost of not innovating

Examples of innovation impacting established market leaders:

> Barnum’s Circus to Cirque du Soleil – Innovated business model

> Microsoft XBOX to Nintendo Wii – Innovated consumer legacy barriers

> Nokia to Apple – Innovated by making the competition irrelevant

> Electrolux to Dyson – Innovated with patentable invention

> Robinsons to Innocent – Innovated with brand & product creating new market space

The above companies have two things in common:

They significantly outperform their competition & the market

They have well developed innovation management systems & cultures

5. The LEAN virtuous circle

The Virtuous circle is common sense; do it well & your innovations will see returns:

> Engage your customers continuously;  listen carefully

> Identify insight: ones you can act on promptly, others for the future

> Can you meet customer’s needs better than the competition? Can you create new needs?

> Create the plan – overlay technology – overlay plan enablers – deliver

> Get it right & you will increase frequency – brand trust – relevance – PROFIT

> Use additional profit to invest in further consumer insight

6. The ‘HOW TO GUIDE’

The process is key: don’t underestimate how impactful a good process can be or the destruction a dysfunctional one can cause. Successes will build the belief, behaviour & momentum when implementing innovation into a business. Whether gated NPD, continuous improvement or portfolio management systems, the principles remain the same.

> Customer voice at the heart of the process

> Created & socialised cross functionally

> Flexible to business needs – capable of evolving

> Measurable & accountable – key KPI’s

> Improves ROI on innovation

> Well trained & sponsored within the enterprise

7. People Power

Building capability into the team with training & development is the quickest way to accelerate change; you can achieve this by creating:

> Innovation advocates & sponsors

> Training & development tools

LEAN Innovation = Less cost + higher return

People make this happen. The toolkit tells them how. The quicker you build competence & capability, the quicker you get results.

8. Balancing the Plan

A good plan consists of projects & activities that align to business strategy. Beware of those that look at the innovation plan as ‘blue-sky’, with little relevance to the day to day.

Ensure you manage the NPD portfolio across short, medium & long-term projects, rank them using the key metrics the business plan demands.

Balance is key, it is important to feel & understand the ‘pulse’ of the business: too ambitious can scare the; not ambitious enough, no one gets excited. Managing the ‘tone’ is key.

9. Measure Progress Celebrate Success

KPIs can make or break the strategy implementation; they need to support the broader business objectives not just the expected commercial reward. Equally important is staying true to brand trust & quality. The following should be answerable:

> What is the total cost of R&D?

> What are the gross & net benefits?

> How many products/ services did we launch?

> What was the success rate at 3/6/12 month windows/intervals?

> Pipeline portfolio NPV (net present value) YoY increase

> Pipeline length – horizon

> New services – new markets entered: penetration, frequency, repeat rates

> Socialise the success of the plan to the stakeholders; reward success

10. CHALLENGE – LEARN – PERSIST

Two great questions to ask of your activity at regular intervals are:

>Are we doing the right project?

>Are we doing the project right?

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