The only thing more slippery than how to define “innovation” is explaining how you might manage it.
But if you start from the premise that there is no shortage of ideas, only good execution, you’re able to redefine innovation as just another process. The job becomes developing a plan for what to do next. That’s manageable.
Innovation management is how companies take ideas from inside and outside the organization, vet them, prioritize them as projects, and assign resources to deliver them to market. (And it’s an essential pillar to getting things done.)
The object is simple: Get more consistent results. Management tools, processes and portfolio mixes may vary, but they’re all levers managers can use to keep the innovation engine on track.
The market shows growing appreciation for a portfolio approach to innovation, with some big and small bets sharing resources and attention, said hosts of a recent webinar sponsored by Innovation Management, a 14-year-old Swedish organization with a worldwide membership list. Another trend is the merging of culture and engineering responsibilities growing around chief innovation officers at larger corporations.
Moderator Patrick Tickle, the chief product officer at Austin-based Planview, spoke with his colleagues, solution evangelist Carrie Nauyalis and product manager Carina Hatfield, as they identified six helpful ways companies can adjust their approach to coming up with and delivering on new business ideas.
Each can improve conditions, expanding the likelihood that innovation efforts will be successful. Taken together, they can help a lot.
Culture and leadership
This is increasingly addressed in business, and with good reason: It’s central to the long term health of new ideas in organizations. It can be particularly critical to examine its impact in companies that favor incremental advancements, where failure is a career-killer, and where big ideas are met with raised eyebrows.
A trite answer here is to encourage executives that “it’s OK to fail.” That feels thin, and isn’t prescriptive.
Instead, manage expectations by couching new efforts as research and development projects in search of breakthroughs and lessons. Set strategic goals for the company, and keep the efforts aligned with those goals. The efforts can be anything, such as creating services out of relationships around products, altering the way you bill clients, process innovations that help the company beat competitors to market, or traditional product innovations.
A helpful starting point is a cultural assessment. It should be anonymous, and can be collected by someone internally who has a reputation for telling the truth — and who’ll do that when they report to company leaders. The next step is having leadership who is willing to face and address that feedback to move forward.
Culture stems from the way we do work, and the way we celebrate the work of our peers. And that comes from the top down.
People don’t think of planning as innovative. But it is the most important step in the execution phase of innovation. A named person and resources assigned to a project ensures people are working on it.
To be successful in an environment with as many variables and as much uncertainty as innovation, planning also must be continuous.
Key to this is understanding capacity across the organization, so that as new ideas surface, they can be measured against projects already in the pipeline. This is a departure from most business planning, which takes place annually or quarterly, followed by project management, measurement against plan and readjustment. By continuously measuring in-flight ideas and their collective impact for the organization, managers can get a sense of whether new ideas are worth pursuing later, or trying now.
By grasping capacity, managers know if they should delay or kill another idea. And that, the panel said, can be a powerful competitive differentiator.
Some of the recent research over at stage-gate.com shows that the problem with innovation is not coming up with good ideas. Most companies have an idea-to-launch process in place. What makes a difference is understanding a single project in the context of the overall portfolio.
The questions to ask are: Does the company have the right goals, the right strategic mix of projects, understand the risk value of the entire portfolio of projects, and the competitive advantage of each individual initiative?
The most successful companies follow time-honored farm advice: Don’t put all your eggs in one basket. And by having a portfolio, you improve visibility and transparency of what is working.
That in itself can change the conversation about success: With the right approach in place, the discussion shifts from “how innovative are my products?” to a much more mature “how do my projects run as part of my organization? Are they strategic, aligned with my goals, and progressing through an effective structure?”
As a manager, which conversation would you rather have?
Business value and strategic alignment
If you and your team are busy, are you doing the things you meant to do? Or are you spending most of your time on unplanned work, like checking email? Like our personal tasks, the energy that naturally lives around new ideas can create a lot of activity devoted to work that doesn’t add a lot of value.
Change the conversation. When investments get approved, make sure you understand the value of that investment. What’s it worth on a pro-forma basis? If taking a new product to market in a certain timeframe can be quantified as a net present value of $5 million, communicate that to all the people who touch that project and its adjacent projects.
Then they know how to prioritize their daily work to reflect an item’s strategic value.
“Agile” development in innovation projects
Shorter cycle times mean faster feedback. When several projects are running simultaneously, that time adds up — it means delivering more projects in the same amount of time.
Software developers are very familiar with agile development, which allows them to get early versions of their product out to early adopters, earning money sooner as they learn from early users, and improving later versions for more conservative late adopters.
But other product organizations are slower to adopt these practices for a variety of very good reasons, many having to do with the different customer relationships and expectations among industries. Instead, these organizations stick to stage-gate or waterfall program management life cycles that de-risk complicated projects before too much is spent developing them.
Even so, being able to iterate within a gate can speed up time-to-market greatly. Planning and decision-making can be considered on top of that, and tradeoffs informed by capacity constraints can be brought to bear.
Agile principles can be a bridge to iterate within the context of stage gate, the panel suggested.
If social media is considered at all in innovation, it’s usually on the ideation end — through open innovation or crowdsourcing. But big dividends can come from social collaboration throughout later stages of the development process, even if it’s just across silos or geographies within the organization.
— James Janega