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Innovation Needs
By now it's considered a no-brainer that every business needs to become more innovative. Looking at any annual report and many marketing taglines it's clear that senior executives have bought into the concept of innovation - at least as a marketing buzzword if nothing else. One could say that talking about innovation has officially "jumped the shark". So, we are all in violent agreement about innovating, the question now is - how to do it and the most effective methods. We believe there are three major approaches:
If it ain't broke
Growing up in the south we learned the lesson that if something "ain't" broke, you don't fix it. In other words, you allow things that are working well to continue to operate. Many organizations believe their innovation abilities aren't broken - they just aren't focused. So, rather than partner with external firms to gain more internal skills and capabilities, many firms decide to DIY - Do It Yourself. The challenge with this approach is that by definition the program is led by someone from within the organization, who wants to grow and advance within that company. This means he or she is unlikely to set stretch goals for innovation or question the status quo. Additionally, your internal team may lack the skills, knowledge and temperament to run and manage an innovation program. Without a doubt you'll find innovative people in your organization, but just as a collection of animals doesn't make a zoo, a few innovative people without tools, techniques and strong leadership won't make you more innovative. The biggest challenge with a completely internal focus is that few people are ever assigned to an innovation effort, and they have little or no control over the rest of the organization and how they participate in innovation. Typically the innovation team will conduct a few exercises and will meet with initial interest, but will be unable to take the ideas through an entire innovation process. After several months of activity but little result, the team will find it harder and harder to identify opportunities and attract participants. A DIY approach can be successful, but the pressures of the "day job" and existing corporate culture will create enormous hurdles. Building out an internal
capability
We believe it's important for innovation to become an internal, ongoing capability. This means that the culture and the people understand the importance of innovation and have the tools and training to effectively accomplish those goals. This is predicated on a management focus on innovation, and setting clear goals and directions for innovation and communicating that frequently and effectively. Partnering with one or more consulting and/or software firms to build innovation capabilities, processes and programs may be necessary, with the eventual goal that the innovation team owns the necessary insights and talents to run the innovation program internally. While hiring a consultant and building out an internal capability is expensive, this approach demonstrates a commitment to innovation and communicates the expectation that the firm, once up to speed on the developed process, can generate and manage ideas internally. This approach provides the benefit of building up an internal capability leveraging experts, with the incentive that the team needs to learn and transition the work from the consultants onto an internal innovation team. Renting an innovative brain
However, some firms simply can't find the time or commit the resources to become more innovative internally. These firms recognize the importance of innovation but are unwilling to sink the investment into training, programs, processes and capabilities, and so they leverage firms that are experts at innovation and idea management. There is a long history of firms using third parties for public relations, ad campaigns and other programs, and in some instances marketing communication and product development firms are offering what amounts to an ongoing, outsourced innovation capability. Given the costs involved and the location of the knowledge in this model, most of the innovation work becomes project driven. There's little incentive to create innovation as a capability, and each product or service group will choose when to engage with a third party consultant - and may choose different consultants to work with. This makes an integrated innovation program exceptionally difficult and allows little possibility to pool resources or scale the efforts. Pros and Cons
First, let's dispense with the DIY model. Very few firms can innovate effectively independently unless innovation is core to their DNA and their operating model. Other than the notable firms (3M, Apple, Google, etc) most firms can't do this by themselves. Over the last ten years these firms have eliminated every divergent thinker in the goal to become more efficient and to reduce costs. So, the consideration for most firms is: build or rent. Building innovation muscles
If your goal is to learn to innovate and build an innovation-oriented culture and capability, then partnering with a third party for training and process development is probably the best approach. It's important to consider the resources you are willing to invest, since any fulltime, ongoing innovation program can easily consume four or five full time equivalents. Additionally, you should ask yourself if this innovation program is meant to solve some near term goals or if the program is meant to be deployed for the long run. Building and developing the program could easily take more than a year of fits and starts, and will require dedicated resources. However, if you can change your culture and build out a sustainable innovation program you will recognize substantial benefits: first mover advantage, disrupting other adjacent markets, introducing new products and services and forcing competitors to keep up with you. Renting the capability
Your team may also make the opposite choice - to outsource innovation on a project by project basis to third party innovation, product development and design firms. This approach requires much less up front investment and leverages the expertise these firms can bring to the table. However, the approach is much more expensive and is fraught with a number of concerns, including the biases that any consultant brings to a project, the depth of knowledge about the industry and the challenge or opportunity and the alignment to core corporate strategy. Conclusion
Whether you build the skills internally or hire the skills when and as you need them, the time for an increased focus on innovation is now. Do you believe that innovation happens only periodically and as an extension to existing products or services? Then you should probably outsource your innovation to a product management or design firm. Does your firm desire to differentiate and capture new market opportunities? Then you will want a more systemic innovation capability. Note that the only real difference between the two approaches is a time commitment by your teams. A full time internal team will require more resources, but an external partner will also need to tap into your best people, and will eventually have to insert the concept for a new product or service back into product or service development processes in your business. So the real question is: systemic or periodic? |
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Innovation Engine
What many firms fail to realize is that they have a significant amount of innovation capability inside their organizations - they just need to provide an avenue for that capability to manifest itself. Creating a culture that embraces innovation and rewards those who innovate is probably the most important aspect of making a firm more innovative. Interestingly, we believe the two most important aspects to creating that expectation and culture are training and rewards - usually functions and concepts driven more by human resources than by product or service managers. Establishing the atmosphere
One of my favorite stories along these lines is about an artist who was telling his daughter about his job - teaching adults how to draw. His daughter was curious - why did adults need to be taught how to draw? Had they forgotten? In her mind, everyone knew how to draw - perhaps some better than others but it was a skill that everyone possessed. Innovation is analogous. Everyone has ideas - but they aren't always sure how to capitalize on them, and aren't sure about the expectations of the organization. This is where good innovation training can come in. Having ideas is just one step in a process - learning to interact and lead others in an innovation program, understanding how to capture and evaluate ideas is also important. Training and education people within your organization on the importance and process for innovation gives them tools and techniques, and emphasizes the importance of innovation as well. Show me the money!
OK, so we encourage people to have ideas, and train them on the techniques and processes to innovate or lead others to innovate. How can we demonstrate not just "how" to innovate but demonstrate we intend to reward those who innovate? Well, we can change how people are evaluated, how they are compensated and how they are recognized. Giving people innovative tools and techniques is a great first step. Following up by demonstrating the potential outcomes they can achieve through innovation will direct their attention and effort toward innovation. How does HR interact with
Innovation?
Training, recruiting, rewards, compensation and evaluation. These are items that traditionally fall directly in Human Resources. Yet they are all exceptionally important for innovation to succeed. Your firm has the basic ingredients - good people with great ideas. Then you need to provide tools, techniques and mechanisms to help those great ideas get recorded and evaluated. Finally, you need to demonstrate to your teams that you will compensate and reward people who actively engage in the kinds of innovation processes that you need. Clearly human resources should play an important and vital role in any innovation program. Bottom Up and Top Down
Working on defining an innovation culture through training and changes in compensation and evaluation create support for innovation from the bottom up - people want to innovate, and now they will have the training, processes and compensation necessary to help them innovate. This approach also requires and reinforces a "top down" model, since changes to compensation and evaluation have to be approved by senior management. In this manner you can create the environment for sustainable innovation. |
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PDMA International
The PDMA holds an international conference each year, and the focus of the event has a strong focus on innovation. This year's event is scheduled for September 13 - 15 in Orlando. OVO is chairing a track in this program on the skills and capabilities necessary for innovation. At this year's PDMA International conference, you'll have a chance to interact with leading innovation thinkers in the "Guru" studio and learn practical tools and processes for innovation. See more about the event here, and if you decide to attend, use this code SP08IC to get a 20% discount. I hope we'll see you in September in Orlando! Frost & Sullivan Growth and Innovation
Conference
I've had the opportunity to participate in this event. I'd highly recommend it, since there is a lot of opportunity for interaction and exchange, and many of the attendees are fairly senior in their roles and experience. Frost&Sullivan does a good job with this conference and encouraging interaction between the attendees. Business Innovation Factory Event
We've attended this event for several years and find it inspiring and encouraging for innovators. The Business Innovation Factory sponsors a story telling conference and brings in innovation practitioners from a wide array of companies to talk about their experiences. A small, intimate program focused on lessons learned and the experiences of starting or running innovation programs. Business Innovation Conference
A new conference focused on innovation is kicking off this fall in Chicago. The Business Innovation Conference September 8-10 in Wheaton Illinois (just outside of Chicago) features a lot of innovation talent from the Chicago area. OVO will have a speaking engagement at the event. Those in the midwest especially are encouraged to come - the speaker list and topics look very interesting. Innovation Immersion
This longstanding conference was originally organized by Joyce Wycoff, who is still part of the advisory committee. The Innovation Immersion conference is scheduled for October 20-22 in Phoenix, Arizona. Here's the link to this great conference. |
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If you'd like to discuss how OVO can work
with you
to improve your innovation strategies, ideation
sessions, innovation processes or software,
contact us today at our website
or
(919) 844-5644 x789.
Sincerely,
Jeffrey Phillips
OVO
email:
jphillips@ovoinnovation.com
phone:
919-844-5644 x789
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