Innovation – Why, What & How

Last week I completed a certification to become a senior innovation practitioner using the Innovation360 Group framework. The gruelling 3 day course where participants from all over the world were present, including the former Global Innovation Practice Manager at McKinsey was an intense mental workout. Anyway the certificate is now in hand and hopefully I will now be able to lead and manage innovation projects more competently.

Innovation, is in my opinion, one of the most overused and misunderstood words in the business lexicon and this post aims to debunk some of these myths and explain in a straight forward way what innovation is with the help of the Innovation360 Framework.

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Why Innovate?

The demand for innovation in an organisation comes down to the fundamental strategic questions any board or executive team needs to answer. Are we looking to aggressively drive market share, profitability or both and what is the trade off between the two?

In many organisations following the Total Quality Management (TQM), Six Sigma and Lean Manufacturing movements of the 1980s innovation around driving increased profit has and will continue to be a focus. The Agile Software Development and Open Innovation movements of the 2000s however combined with the effects of increasing globalisation, automation and digitalization have opened the eyes of management teams to the possibilities of driving aggressive market growth through their innovation initiatives.

What I see in most organisations today is a need for both. For some “profitable growth” has become a management mantra and it is possible if you have a defined and managed innovation process.

The next why question companies need to address is are they are they going to pursue incremental or radical innovations and the answer generally, but not always, is both depending on a 3 horizon approach which was first identified by McKinsey and was built upon in terms of innovation management by Magnus Penker in his paper for the 2016 Drucker Forum.

Finally you will need to assess your approach to innovation. Are you a Need Seeker, going out and truly understanding your customer in the field and devising innovative answers to their everyday problems. Are you a Market Reader who scans the market for best practice and develops innovative solutions quicker and better than the competition or are you driven by advances in technology which feeds your radical innovation agenda.

What to Innovate?

One of the most misunderstood areas of innovation is what to innovate. With all of the movements mentioned above the one area that gets so much attention is product innovation and of course this is important but when you look at the organisations that have brought us truly innovative solutions over the last 20 years including Spotify, Skype, AirBnB and Uber it is their use of other forms of innovation that make them truly special. The Innovation360 Framework identifies 7 areas of innovation to focus on

  • Product
  • Process
  • Organizational
  • Management
  • Production
  • Business Model
  • Service

How to Innovate?

When you have answered the strategic questions of “why” you are innovating and the operational questions of “what” areas to focus innovation on, you actually need to do it and that is where developing your skills in “how” to innovate is crucial.

The leadership style of any innovation project is essential to get right from the beginning. This depends on the type of innovation you are focusing on and which horizon you are working within.

Screen Shot 2016-07-05 at 09.58.07Along with leadership style the diversity of thought within your team is crucial to any innovation effort. This is where the work of Tom Kelly from the worlds leading design firm IDEO comes in very useful. His 1o Faces of Innovation identifies 1o personas which bring different capabilities to a team and can be used in all innovation efforts. They are broken down into Learning, Organisational and Building personas. I challenge you to look into Toms work and identify what personas you have taken on in the past and are playing today in your companies innovation efforts

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Crucial in “how” to innovate are the capabilities needed to succeed. The reason why I like the Innovation360 approach so much is it brings together all the latest thinking on innovation management and takes a data driven approach. It identifies 67 different innovation capabilities and gives you chance to map out your organization’s innovation footprint in a tangible and data driven way. If you are curious go ahead and give it a test. Innovation360 offer a free innovation assessment and report as part of their mission to help over 1 million entrepreneurs build a better world.

It also gives you the chance to continuously measure the innovation capability your organisation is building over time. Like any organiazational competence it takes time to develop and there are various stages to go through until you are a master of the art.

One area I would like to build into the Innovation360 approach is the area of culture. Different approaches to innovation I have observed either take the “soft” organisational, functional and industry culture approach or the “hard” data driven academic approach. I believe it will ultimately be a combination of the two approaches that succeeds but without data to build upon in todays world I believe you have nothing.

Finally key to the “how” of innovation is the process that you follow to find, select, develop and commercialise ideas.

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Whilst some risk averse commentators see innovation initiatives as a series of high risk gambles I would argue that with the right innovation process and governance model in place your innovation efforts become just another organisational process which can be managed like any other. Question is how many of you have a defined and documented innovation process in place?

Of course after you have worked out the Why, What and How of Innovation there is then the tricky execution questions of Where, When and Who but that is a post for another day. I hope this post has helped you frame some of your ideas and thoughts around innovation. Good luck with your own initiatives and I will leave you with one final piece of advice. Perfection comes from imperfection – Dare to fail and you will succeed.

 

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