RAISE CORPORATE INNOVATION CAPABILITY IN ’06
The business press is filled with articles on the need for US businesses to: embrace the "creative economy", step up their innovative effectiveness or fade fast. As many firms go through their 2006 strategic planning exercises, how many "small and medium enterprises" (SME) will make – improving their "innovation management" (IM) – a priority objective? How should a SME even begin to think about raising their innovative capacity from an accidental, reactive art aimed at incremental improvements to a more proactive, predictable, profitable process that produces bigger advantages?
Global 2000 corporations have been aggressively investing in the new, evolving solutions for IM with the general goal of making IM a core business process similar to ones for financial and human resource management. But, the new wave of IM "solutions" have yet to appear on radar screens at most SMEs.
Given that most SMEs don’t have the resources of the bigs, what are some simple, cheap first steps for starting an IM journey? Here are a few thoughts followed by some brief explanations:
- Agree on a definition for "innovation management."
- Quickly measure for free how effectively the firm is currently and consciously innovating.
- Start changing the culture to support an innovation attitude and more activity by refocusing on one or more, good, past objectives that are still not achieved.
- Start doing some on-going study on the subject of IM that has evolved light years beyond the ingenuity that founded most companies in mature industries. Today’s IM thinking isn’t our Grandfather’s.
DEFINING "INNOVATION MANAGEMENT" AND CURRENT CAPABILITY STATUS
Here is a most succinct definition – of many, no doubt – for "innovation": "the profitable implementation of strategic creativity." Of the four elements in this definition, let’s start with strategic intent or focus; e.g., for what right customers in what right niches would we like to uncover new needs that we could address at a cost that is less than what the customer will value and pay? It will then take creativity to first see unmet or next level needs for target customers and then to design new solutions for those needs. Next, comes the ability to implement successfully which will include getting enough employees to buy in to the plan to make it work. Profitability is a by-product of doing the first three elements very well in an integrated fashion.
How well and often do we execute the above definition of "innovation"? Do we have a shared process that allows most every employee to help make innovation happen on a regular, repeatable basis? Try taking one of the free innovation assessment tests on the web. One site with a steady stream of "creative economy" fare including an assessment test is Business Week’s "innovation" site at: http://www.businessweek.com/innovate/index.html. Consider printing their test and having different management team members score the company on an independent and anonymous basis, then have the results summarized for a discussion.
Before taking one or more innovation assessment tests, consider compiling a list of past objectives that the company attempted to do – both successful and not – that involved some degree of innovation whether it was "incremental, next-level or radical." This list will help to focus management’s thinking for taking the test and then discussing what innovation capacity gaps the company has.
INITIAL CHANGES TO CONSIDER
If you google "innovation management" for both "the web" and "images", it is easy to be overwhelmed with the material about and graphic depictions for the IM processes. You may note, however, that none of these processes or IM tools and methods will work if a company does not first have a culture that supports innovation. For anyone to be innovative, a company must increase the "enablers" and decrease the "inhibiting factors", which are usually two sides of the same coin. For more on a climate for innovation see the article at this link: http://www.thinking.net/Creativity/creativity.html.
Innovation requires, for example, extra time, talent and treasure beyond the lean-n-mean daily hustle. If management thinks that they can’t afford to budget some resources for innovation, then think about what the long-term cost of not innovating will be. For good strategic idea generation and deeper learning about an opportunity area, try a little training about "pushing the wheel of learning" and how to make "good, fast, cheap mistakes to fail forward" towards some envisioned solution. For more on the wheel of learning and good mistakes see exhibit 24 at http://www.merrifield.com/exhibits/Make_Lots_of_Good_Cheap_Mistakes.pdf (plus all of the documents under the "innovation management" tab on the home page). To identify and defuse rutted groupthink, managers have to ask themselves and others "What makes me/you/us think that; what are our underlying assumptions and facts? Are they dated or superficial? That’s OK, how should we revise them for a forward-looking reality."
A more holistic approach to changing the company culture is to think what consistent changes can be made in the following factors listed from most important to less important: (For more on why these factors fit together see exhibit 16 at http://www.merrifield.com/exhibits/Kinetic_Chain_Ex_16.pdf.
- Leadership behavior and example.
- Strategic resource allocations.
- Systems that support, track, and publicly praise innovative efforts and good mistakes.
- Educating all employees about: the economic importance of innovation to all stakeholders; as well as, how to use the wheel of learning and make good mistakes.
- A few new metrics that are tracked to see how innovative efforts are progressing and how productivity and profitability per employee are growing as a result
- An overall gainsharing incentive program that will affect all employees as team-effort innovation yields better profitability per employee.
And, a final change to consider is the commitment to start noticing and reading more on the new emerging science of IM. The references and footnotes in this article alone will steer you to more than you want to initially know.
The days of making lots of reactive adaptations and adopting industry best practices to stay in the game are over. We must continue to make those types of "sustaining innovations", AND we need the corporate capability to see and make more "next level" and occasional "breakthrough or disruptive" innovations. Strategy as usual will not be effective unless we have innovative capability at the individual and departmental level of our business. The tip of the IM iceberg are the methods and tools you can read about, but the hidden 90% of being good at innovation has to do with guiding the culture of the company to one that supports IM. Start your IM journey with some simple steps right now.
Merrifield Consulting Group, Inc., Article 1.13
D. Bruce Merrifield, Jr.