No matter the urgency, the 4IR and the future is in the transcendence of technology, through people. Creativity, Imagination, Intuition, Emotions and Ethics will define and differentiate the world’s greatest businesses.
Innovation is through your people, your culture and through an understanding of how people change and adapt.
As a result, no matter what, introducing innovation management needs to happen gradually. Firstly, you can’t boil the ocean and secondly, remember the “frog sticks around, when you turn up the heat incrementally”.
People and your culture change gradually and so yes, it’s an Agile approach to Innovation Management that works best….
It starts at the top, because without the support of management, it’s doomed to failure. It’ll lack understanding of the nuances, the budget required, support at the interfaces and speed of decision making.
Many companies start out in an immature stage. Typically with a disconnect between strategy and operations, poor data integrity, minimal standard processes and the constant use of gut-feel to make the decisions.
Management needs to agree on the future vision and aspire to build:
- Strategically aligned portfolio
- Data lead and therefore unbiased resource allocation
- A view of the full lifecycle of a product from idea to the end-of-life
- Real-time information
- Enterprise-wide tools
- Information ownership
Clear expectations need setting: what good performance and bad performance will look like, together with the objectives and purpose, in other words — what should be achieved and why.
Operational rules need establishing, together with an understanding again, these will constantly be broken as the culture shifts over time:
- Re-align responsibilities and reporting lines
- The removing of limits on R&D, Product Management and what might be
- Framework conditions, such as budgets and important stakeholders.
Step-2: Assess The Current As-Is and Define The To-Be
The gap between the current state (As-Is) and the future state (To-Be) helps identify the gap and what it takes to bridge that gap.
At the start the main question to be answered therefore is “What is the innovation vision: what do we want to achieve that positively impact the corporate strategy?
From this, there must be clarity at all levels, because otherwise there will be no common goal and it will not be possible to pull everyone together. If this answer is clear and well-defined, other strategic questions are able to be answered:
- Do we want to be a leader or an excellent follower? Or do we stand for merely cost leadership?
- What is our type of innovation, be it products, processes, business models, services, etc
- What is the desired degree of innovation and how much risk do we want to take?
- How far do we want to innovate outside of our core business? New revenue models?
Step-3: Where Do We Look To Innovate?
To stay competitive, organizations need to find new and relevant ways that they can solve their customers’ problems and make their lives better.
But to many, innovation can feel like an empty bucket, with all the best ideas taken. It can be difficult to come up with new ideas that are economically viable, that your team can implement and also hit the mark with what your customers will find valuable. Part of the challenges can be lack of ideas, as a result of looking at innovation in too narrow of a scope, focusing primarily on the product or service alone to find differentiation.
Fortunately, there are many unexplored paths for us to consider…
Profit Model: Look at new ways to price your offering and collect revenues.
Network Effect: Innovate in ways by connecting with others to collaborate and share resources.
Processes: Innovate in work procedures and operations to create a dramatic change in how things get done.
Product Performance: Innovate new features, abilities or qualities into the product itself.
Product System: Creating a product ecosystem that supports a community of products through interoperability.
Service: This is all about the customer journey, how service elevates the product and service to enhance value.
Channel: Innovate in new ways of delivering your product or service to your customers to add more value.
Brand: Crafting a strategic message and feel to represent your offering that evokes a more emotional attachment.
Customer Engagement: Devising unique and personal ways to create a memorable tailored experience for each customer.
Step 4: Starting The Search For Ideas
There are many ways to search for ideas in the above examples:
- The culture of finding ideas can be made a permanent feature of your company. By enabling your people to submit new ideas at any time either through your innovation platform or a product manager.
- Project initiatives can be launched, whereby employees, customers and suppliers are invited to contribute their ideas to specific topics.
- Creativity workshops, where a variety of ideas can be collected in short bursts.
- Or you can apply a series of thought provoking innovation methods, including customer visits, cross-industry and extended value chain workshops etc
Step 5: The Innovation Management Process
The innovation management process necessitates the use of certain management tools that assist in bringing the ecosystem onto a common platform and getting them to move towards a common goal.
Innovation management is a continuous closed process and cycles between the following stages:
Ideas Evaluation: In this stage, ideas are evaluated for their contribution to the planned business model/product and corporate strategy. A wide array of ideas need to be considered, however it is essential to maintain balance in the ideation process so that not too many stray ideas overpower the core purpose.
Product Conceptualization: In this stage, concepts are developed based on the accepted ideas. Other important criteria like investment required, time to payback and longer-term returns are evaluated.
Plan Demonstration: Once a concept is formulated, an all-encompassing plan is developed and demonstrated to the customer/end-user.
Customer/End-User Validation. Once the customers or end-users interact with the demonstrated plan, it becomes possible to ascertain how much value the product will deliver to the customer. This validation is vital for continuous improvement of the planned product.
Product Development: The earmarked investment is utilized on planned lines in order to build the product, or to commercialize the already developed product.
The CSFs of Innovation Management
When it comes to innovation management, there’s a point to be made about there being no best practices, given standardization represents the standardization of thinking!
However, this doesn’t mean there wouldn’t be certain principles that are more likely to work than others when striving towards greatness in innovation management.
If you decide to focus on becoming better each day and constantly improving all of the aspects related to innovation, you’ll eventually get great results without a doubt. It’s the compound interest for constant improvement that matters the most as the greatest results are achieved in the long run. You may not see much of a progress in a month, but even 1% weekly improvement will truly make a difference in a year or two.
Creating value for your customers
Whatever you decide to focus on, ask yourself and your team: “Is this really creating more value for our customers?”
How you do it depends on the situation as there are different ways to achieve this. It is, however, inevitable for you to know your customers will to be able to acknowledge and respond to their needs.
If you’re not familiar with what your customers want and are willing to pay for, you need to begin somewhere, which means that you may have to do more market research and service design compared to those, who know the market like the back of their hands.
But all this being said, customers frequently focus on their short-term needs, rather than looking at the big picture.
To see what works in practice, it’s smarter to prefer testing instead of listening to every single request of your customer. People tend to say one thing and do the opposite. Therefore, actually testing your assumptions will give you more reliable information about the behavior of your customers.
Implementing the MVP / Lean approach
Instead of planning a new business model for years, a Lean Startup Model is a technique that emphasizes the speed and urgency in idea search and execution and is designed to address market risk fast.
Build-Measure-Learn Feedback Loops is the core component of the Lean Startup Model for building and testing new ideas at blinding speed. Based on the feedback, you’re able to identify what can be done better and whether to pivot to the new or preserve existing.
Allocate the right resources
As there will be numerous ideas, it’s vital for the enterprise to find the right areas of focus and allocate resources to support the strategy. Evaluating assets (both human and financial) and utilizing them where they have the most potential.
Depending on the organization’s nature, its maturity and the industry it operates in, the so-called Google’s golden rule, the 70–20–10 model, can work as a solid framework for allocating your innovation resources. Google spends 70% of their time on core initiatives, such as the development of their search engine and AdWords advertising platform, 20% on adjacent businesses, such as Google Earth and the rest 10% on transformational initiatives that focus on creating something completely new.
The Innovation Culture
The most important element that constitutes a culture of innovation is the openness to other people’s ideas and the willingness to share their own. This means that all ideas are equally welcome and none of them are disregarded without merit. Enhance trust and openness by making sure people are allowed to see failure as an opportunity to learn.
It’s a general misconception that your team should consist of just visionary innovators. The most valuable team players aren’t necessarily the ones who are the most innovative, but the ones who are smart and able to get things done.
Everyone in the organization has ideas, but even the greatest ideas don’t really matter if they are not put in practice. When building a world-class team, consider gathering a team of people with cross-functional skill sets, as different skills make the team stronger. Make sure your team consists of people who are not only good at creating new ideas, but also capable of advancing, refining and executing them. It is, in the end, the execution that matters, not the idea.
In a world of ever changing consumer demands, now is the time to adapt and innovate as a culture and to bring new products and services to your customers.