Volume II, Issue 3 September 4, 2018
How do you involve all units within your organization and partners & networks to assist with driving innovation from idea to market?
For Successful Innovation in the Long Term, Find Ways to Integrate New Initiatives with Existing Systems
Companies need innovation because they all need new products, new business models and new value propositions – which offer novel opportunities for growth as well as some unanticipated challenges. Innovation does require change and because of that innovation initiatives are similar to change initiatives within a company.
At the same time, if any company is going to remain a company (i.e., remain largely intact for some number of years), there are long-standing systems and relationships it has to maintain in a stable manner. Internally, the executives and employees and the company culture they form can’t be completely changed and overturned every time a new business concept might be pursued. Externally, there are partners and suppliers whose skills, resources and good will are often needed to be available in a predictable and steady manner. This need to balance between the new and the old means that, while change is inevitable, repeated revolutionary upheaval is impractical and unsustainable.
Diverse innovation team. IXL Center, Sao Paulo, Brazil.
Align Innovative Initiatives with the Existing Organization and Existing Partnerships
The way to strike this balance between change and continuity is to effectively integrate innovation with already existing business processes internally as well as with external partners (while attempting to make changes to existing systems only when they become a consistent impediment to innovation). That means paying attention to communication between innovation leaders with all company stakeholders at the beginning, middle and end stages of nurturing an innovation from an idea to a fully-fledged business concept. Without this clear process of finding buy-in across the value chain, innovation initiatives often devolve into a battle between process leaders within an organization, resulting in dissention, chaos and inaction. With it, you can leverage the energy and efficiency of existing systems and cultures to lift innovation initiatives.
The three stages we will look at are innovation processes and procedures that occur at upstream, midstream, and downstream stages of innovation development. As an example of integrating these stages with existing systems, you might think of aligning innovation initiatives with these different parts of the organization:
1) Innovation insights with marketing and strategy
2) Innovation resource allocation and manufacturing arrangements with strategy and financial planning
3) Commercial launch of the innovation with sales
At this stage you want to encourage as many ideas as possible (as we suggested in the last newsletter concerning an innovation pipeline). To ensure that all sorts of stakeholders buy into an innovation initiative, you need to solicit ideas from all parts of your value chain – from the most conservative to the most audacious teams and organizations whom you’ll need to work with. In addition to getting buy-in to your project, you will also maximize your efforts by leveraging existing systems. All of these sources of ideas and resources potentially all have something to contribute to your efforts. In addition, by welcoming and valuing their input, you may encourage them to think even more creatively and contribute to the ideation process.
Communication is key to coordinating efforts at every stage. At this early point, leaders should articulate how different stakeholders will contribute to the overall innovation effort. This has the added value of demonstrating leadership commitment. And if innovation leaders hope that all stakeholders will truly share all their insights – including those that might challenge the innovation initiative itself – leadership must support healthy debates. People should know that it’s not impolite to challenge others’ ideas; instead, it should be considered to be the best way for all to improve ideas and to contribute to success.
Innovation Portfolio as a generic pipeline process. Created by Alice Chung, Senior Manager at Genentech Business Operation.
Once the innovation initiative gets started beyond the early ideation stage, it needs to coordinate with strategy and planning and seriously factor in future uncertainty and potential risks. Those running the innovation initiative should go out of their way to understand priorities, concerns and address challenges of all stakeholders, especially those in the more traditional or conservative parts of the value chain because they may get cold feet once the challenges of the initiative become clear. (In that case, get them excited about all the new opportunities they may encounter, too!)
Because innovation requires internal and external stakeholders to do something new, it’s probably wise to over-communicate to partners and networks. Because they are often significantly removed from the centers of decision-making in the central group running the innovation initiative, they can easily feel left out or shunned if the details of the innovation initiative become murky. To stop these awkward moments before they happen, innovation leaders should request a “point person” for every contributing group or significant team. That person can both meet regularly with other group leaders to share information and have the responsibility to be responsive to questions from outside.
Toward the end of the innovation process clear triage points of innovation initiatives should help to focus efforts and resources. Priorities should be determined and initiatives should be assigned to different tracks: high, medium and low priority tracks with appropriate funding and personnel allocations. This should also be the time to determine which innovation projects should be definitively shut down.
One factor that can keep these various business functions coordinated and confident that they’re pursuing the right path is innovation metrics. While we will discuss this issue in more detail in a subsequent newsletter, it’s important to recognize that establishing metrics are crucial because the big payoff of innovation is usually in the future and its processes (involving creativity and emerging intellectual property) can often be less tangible than the incremental improvement made by conventional R&D. Metrics help teams understand where to direct their efforts; metrics also help disparate teams communicate across the value chain because they allow the work of individual teams to be understood more easily by outsiders.
It’s one thing, of course, to create processes to ensure buy-in within an innovation process. It’s another to make sure that those processes are truly valuable. How do you find the big bold ideas that matter in the market and to your company? Answering that question will be the topic of the next edition of The Innovator.
We’d like to thank Alice Chung for her contribution to this edition of The Innovator.
ABOUT THE AUTHORS
Mark Rennella is a writer, editor and teacher who uses a historical perspective to examine and unpack today’s complex business trends. He has authored popular Harvard Business School cases on a variety of topics as well as a book on leadership, Entrepreneurs, Managers and Leaders, co-written with Nitin Nohria and Anthony Mayo (Palgrave Macmillan, 2009). Mark’s many books, articles, business case studies, and collaborative writing endeavors have garnered him critical praise from historians, academicians, and business leaders alike. In 2001, Mark earned a PhD in American History at Brandeis University.
Dr. Hitendra Patel is the Managing Director of the IXL Center and Chair of the Innovation and Growth Program at the Hult International Business School. He has coached new emerging leaders and managers of new and fast growth businesses.Hitendra was a senior leader and co-founder of Monitor Group’s Innovation Practice and was responsible for Asia and Latin America. Prior to Monitor, he was a senior manager at Arthur D. Little. As a management consultant, he has made lasting impact with all types of companies by helping them identify new engines for growth and develop their own capacity to innovate.