All business leaders will claim that innovation of process, products and services is of paramount strategic importance to their organizations. Yet accomplishing systematic large-scale innovation practices remains elusive and confounding for most. Evidence suggests that corporate process and structure are not the keys to unlocking the faucet to the innovation pipeline. Only 28 percent of the senior executives in a recent McKinsey survey1 said that they are more likely to focus on the risks of innovation than on the opportunities, but only 38 percent said that they actively learn from innovation failures and encourage the organization to do so as well. Even more alarmingly, only 23 percent of the employees believe that their organizations encourage them to learn from failure. Regardless of the challenges innovation poses, business growth is tied directly to maintaining competitive differentiation and that requires innovation to avoid stagnation. This article takes a hard look at what is really required to succeed in business innovation and provides a roadmap for business leaders to consider implementing in their own organizations.
Innovation and Failure Go Hand-in-hand
Unless we are spending a weekend at the casinos in Las Vegas, our tolerance for placing risky bets is very low. Unfortunately, when it comes to producing improvements to any aspect of our business, risk comes into play. More often than not, so-called “improvements” initially backfire and must be sent back to the drawing board. The truth is, when it comes to innovation, we are forced to kiss a lot of frogs and accept failure of ideas as part of the innovation process.
The following five-step innovation roadmap should help.
1. Focus on the People: Identify An Innovation Team and Empower Champions
For the innovation effort to catch fire within the business, it must be championed from the top layers of the organization and actively promoted throughout the ranks. The top executives must be firmly behind the initiative, but paying lip service to promote innovation is not enough.
The executive leadership team must work on developing a group of innovation leaders that will help carry out the vision for the effort. These agents of change control power centers within the organization and possess the capacity to generate and use influence in the transformation process towards a culture of innovation. Executives must build a coalition to lead the charge, looking beyond the traditional hierarchy and building a team from a variety of departments and roles – ensuring that power center members have been identified and included.
In forming an “innovation coalition”, start by doing the following:
- Identify the true leaders in your organization
- Ask for an emotional commitment from these key people
- Assess your team’s strengths and weaknesses
- Ensure that the selected coalition represents a cross-functional team with varying view points from creative, analytical, driver and operation SME archetypes
- Work on team building within the coalition
- Develop a learning program to provide key skills and support for this transformation team
2. Define a Vision: Promote Innovation As a Key Part of Strategy
To guide the innovation effort, the innovation coalition must develop a map for the transformation — inclusive of a clear vision that spells out the ultimate role innovation will play in the future of the organization.
It is important for the group to be able to clearly articulate the innovation imperative, otherwise it will be very difficult to create the future vision and underlying reasons for the innovation effort. The message must be developed, honed and delivered well in order to get everyone in the company on board with the vision. The coalition leading the innovation effort must link innovation’s importance to the business strategy and treat it as a strategic imperative that must be operationalized by all executives, middle managers and workers throughout the business.
3. It Takes a Village: Implement Innovation Communities
The coalition must also set about the task of designing innovation communities of interest within the organization, then helping to select the right people to be involved in each team.
Employees that work together as teams and teams that connect as communities of interest can help accomplish far more toward innovation than individual contributors would ever produce. It is interesting to note that when working as a group, individual strengths such as creativity are marginalized. Academic research published in 2006 indicated that differences in individual creativity and intelligence matter far less for innovation than connections and networks—for example, networked employees can realize their innovations and make them catch on more quickly.2
The structure of innovation communities can be tailored to address strategic key outcomes addressed in the organization’s strategy, or more closely aligned to specific core business processes or functions. The innovation coalition members should be cross-pollinated into the different innovation communities formed. As with the formation of the innovation coalition, ensure that members for the various communities represent a cross-functional disciplines and vary in terms of seniority so that different points of view are expressed.
Goals, objectives and target timelines should be established for each community. Reporting metrics should also be defined so that progress can be monitored to detect where the process is working well or breaking down. Technical infrastructure may be required to support online forums such as wiki-boards.
4. Celebrate Success: Get Wins Under Your Belt and Promote Them
Instituting innovation is a process, and it’s easy for an organization to get discouraged if employees are seeing little benefit early on. It’s therefore important to break the process down into stages and motivate employees to reach milestones along the way. An iterative Prepare-Plan-Transition-Implement-Reward model is ideal to break the innovation process into manageable steps that allow progress to be shown sooner. Using this approach facilitates planning and implementing “chunks” of work related to the organization’s innovation transformations that have purposefully been broken down into a short time frames with clearly visible results.
To keep momentum going, look for sure-fire projects (low-hanging fruit) that can be successfully carried out, and preferably, pick projects that are inexpensive to implement. Finally, clearly reward those who are meeting the initial goals and celebrate those successful innovations.
5. Performance Centricity: Work Towards Building an Innovation Culture
Lastly, work on changing the culture of the organization over time. In the article, A Fish Rots From the Head, it was asserted that organizations possessing a performance-centric culture tend to perform better financially. To build a performance-centric culture, organizational leaders must instill an acceptance for healthy levels of risk taking and an appreciation for learning, development and diversity of opinion. These factors fuel innovation and help propel stronger long-term financial performance.
1 – How companies approach innovation: A McKinsey Global Survey,” mckinseyquarterly.com, October 2007.
2 – Lee Fleming and Matt Marx, “Managing Creativity in Small Worlds,” California Management Review, 2006, Volume 48, Number 4, pp. 6–27.