Happy Holidays from IXL CENTER
IXL Center opens new office in Singapore
IXL Center is scaling innovation in Singapore.
IXL Center is delighted to announce a new office in Singapore at Raffles Place, 20 Malacca Street, Level 14. A big thank you to all our friends in the Lion City, particularly at Singapore Management University, Infineon, UOB and the Institute of Policy Studies.
Contact IXL Center office in Singapore: singapore@ixl-center.com
Volume II, Issue 5 November 20, 2018
A wise man once said, “Every basic story that people tell to make sense of the world has already been told.” Another wise man responded, “That may be true, but what happens to those stories when the world changes?”
IXL Center partners: Ronald Jonash and Hitendra Patel
Choosing the right story to understand the economic world today is especially important when we try to find the best solution to this persistent question in innovation practice: “What innovation processes and tools are key to institutionalize innovation across all parts of your organizations?” The first and unavoidable step to answering this question is: Leadership must make a very visible commitment to innovation and ensure that all innovation efforts are connected to clear business and/or strategic goals.
This truth about innovation will never change for business. Nevertheless, over and over, companies mistakenly skip this necessary step to successful innovation. Why? Executives today are so often distracted by the accelerating marketplace that they can confuse speed with strategy. Because of this, they tell themselves (consciously or sub-consciously) the wrong story about the world: because speed is essential, tools like crowdsourcing or artificial intelligence will solve my company’s strategic problems.[1] This is a nice story, but it’s totally false. It is true that being speedy is important in today’s economy; in fact, one might add that the ability to innovate or change quickly is becoming table stakes for any company playing in the global marketplace. But being speedy means nothing without having a strategic direction in mind.[2]
“On average it takes 4 years for a company to benefit from the ideas that it has invested in” – Dr. Hitendra Patel.
So if we proceed without the fairy tale that speedy tools are a substitute for innovation strategy, we can make better decisions about the processes and tools we need to make that strategy real across all parts of an organization. In today’s economy, this usually means deftly attaching machine processing power (i.e., increasing speed and scope) to strategic thinking (i.e., direction). So, once we’re clear about strategic direction, it would be helpful to keep the next two steps in mind.
1) Gather, Categorize and Share Initial Insights. The first step in this process is generally referred to today as “crowdsourcing.” There are many ways to gather ideas, from in-person case competitions to online systems that connect disparate teams. With all of our online tools and connections, gathering ideas is not a problem. The real problem that arises is the challenge of organizing or “curating” the ideas into meaningful categories. This can be done on a large scale with, for example, natural language processing. These categories can then be more easily aligned with business priorities.
In addition, tagging ideas and innovation with language processing capabilities can be helpful in creating taxonomies that can be used for innovation in the long-term. In addition, taxonomies can allow companies to incorporate data from other sources easily to further inform and enhance findings developed from their own crowdsourcing. Tagging also can perform an important internal function as a means of advertising or sharing ideas that might otherwise remain unnoticed in companies. This is especially helpful for organizations with offices spread throughout the globe.[3]
2) Funnel Ideas into Nuanced Categories of Innovation Efforts. There a many specific tools and approaches, but what is important is that multiple complementary approaches be used. That is because innovation initiatives can (and often do) develop unexpectedly and are targeted towards a business landscape that can often be in flux. Opportunities and emergencies can arise at any moment and priorities can change. Keeping that need for flexibility in mind, there are some reliable questions you can use to understand and prioritize all your innovation efforts:
Innovation can make money for you in big ways and small. These are all net positives for your company, but you should try prioritizing opportunities by estimating where the biggest bang for your buck may lie – and what that “bang” is. These could range from greatest investment to revenue ratio to increase in market share to simply pure revenues.
What’s the big opportunity? Innovation Management tool – Business Opportunity Map (IMBOK)
While there is a lot of planning and a lot of complexity that goes into choosing the processes and tools of an effective innovation program, one should always remember that the final business concept does not have to be complex at all. Innovation can lead to groundbreaking revenue generation with a simple new product that just hasn’t occurred to anybody or to an attractive, easy-to-use service that finds new ways to generate revenues. Disciplining the use of tools with a clear strategic vision will help illuminate opportunities that are complex and simple, big and small – all of which contribute to the growth of your company.
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[1] Recently, Thomas Davenport observed that because “the hype surrounding artificial intelligence has been especially powerful, […] some organizations have been seduced by it.” See Thomas Davenport and Rajeev Ronanki, “Artificial Intelligence for the Real World,” Harvard Business Review vol 96. 1 (2018): 108-116.
[2] For an enlightening discussion about executives being distracted by the latest technological “shiny objects,” look for our Game Changers innovation podcast with GIMI board member and CEO of IdeaScale, Rob Hoehn, that will be published in December.
[3] These points are also derived from my conversation with Rob Hoehn that will be shared in our upcoming Game Changers podcast.
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ABOUT THE AUTHORS
Mark Rennella. Senior Editor at IXL Center
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. Managing Director of IXL Center
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.
Volume II, Issue 4 October 17, 2018
In previous editions of this The Innovator newsletter, we’ve noted that maintaining energy and productivity around innovation often requires a balance between opposing forces – forces that both spur creativity and can cause friction (with both internal and external stakeholders). The same applies to today’s question, “How do you find the big bold ideas that matter in the market and to my company?” The main balance in this domain of innovation is focusing on a significant unmet need or problem while at the same time being open to unexpected new opportunities or changes of course.
Some people might react with skepticism to this question: “If we knew what the big opportunity was, we’d already be insanely rich.” In answer to this, we would certainly confess that we don’t have a crystal ball to predict the future; however, we do have an approach that will increase your chances to find that big idea. This goes hand in hand with having a well-functioning innovation portfolio, which is the mechanism to keep a wealth of ideas flowing so that the market sees that your company is consistently finding new ways to meet unmet needs. In this newsletter, we’re going to drill down into that innovation portfolio and look more closely about how a few ideas – or sometimes just one idea – comes to fruition.[1]
To find big ideas requires following these steps:
1) Have a clear goal, which is the unmet need or problem
2) Have a method – some repeatable method – that will simultaneously
3) Test the categories of suggestions and determine what should be done with them
The first and by far the most important step in this process is having a clear goal. We might better understand why this is important if we recall this criticism of Aaron Burr in the recent musical Hamilton: “If you stand for nothing, Burr, what will you fall for?” Essentially, having a clear goal to work towards gives participants in an innovation process parameters and reference points concerning what is germane to satisfying a customer need. Those parameters allow insights to accrete instead of becoming dispersed and incoherent. For example, if the goal for a yogurt company was a vague mandate “to increase sales,” then just about any and everything related to the existing company’s efforts might be included in that goal. Better salespeople? (Sure.) Bigger containers? (It might work.) Lower prices? (Why not?) But if the goal is more specific, like “how can we increase and broaden the ways consumers think about to using yogurt,” then the insights connected to that goal have far more potential to be related and to grow into something like a meaningful idea.
In accomplishing the second step in this process, we don’t advocate any one method over another: it depends on your company and its culture. Whatever the method, you need people or systems (or some combination) that have responsibility for gathering and assessing ideas. A couple of brief examples may help visualize this step.
People-oriented example. A company may task large cross sections to be on the lookout for new ideas and emerging or disruptive trends in the business environment. Teams or individuals are then in place who are specifically accountable for sourcing and managing emerging trends in their fields of endeavor. Eventually, these teams or individuals assess these insights and decide whether or not they should be terminated, undergo more testing, or should enter the pipeline of new offerings or product development.
Systems-oriented example. To start generating insights, you can hold workshops and ideation events, invite online submissions and talk to customers. In processing these new insights, you should cross-reference them with existing and past efforts. By doing this you can avoid reinventing the wheel by eliminating “new” insights that have already been assessed. You can also find current innovation efforts that might be given an extra boost of energy by a connection to a new insight.
The final step is to test your categories (or “bundles of insights”) and come to one of four conclusions about them:
1) The category will not satisfy the unmet need.
2) The category will satisfy the unmet need (maybe with some minor modifications). This is the foundation of the big idea.
3) Testing of this category might yield insights into another way to satisfy the unmet need.
4) Testing of this category reveals a new unmet need – which requires beginning this process again.
This approach represents an efficient way of processing insights. While relatively simple and straightforward, the process is made robust and coherent by being consistently measured by its ability to satisfy a specified unmet need. Meeting that need in a way that leverages different parts of the value chain will likely yield a big bold idea. Almost equally important is to be on the lookout for surprises and new insights that can lead to the discovery of a second unmet need, which was found (somewhat ironically) because of the focus on the first. This brings us back to the first step of the process and the beginning of another potential blockbuster.
We all know that big bold ideas don’t come easy and that innovation (especially for internal stakeholders) is more a marathon than a sprint. Outside stakeholders may marvel at the speed and quantity of business concepts emerging from your company, but insiders know that those new entries into the market represent a fraction the overall effort and insights that their company was investigating and testing over a long period of time. Helping employees to run that innovation marathon is a big challenge. One answer to that challenge is the appointment of a Chief Innovation Officer. Examining the pros and cons of having a CIO is the subject of next month’s newsletter.
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[1] We should take one moment here to explain what is meant by the word “idea” in an innovation process. An idea that is worthy of the name in an innovation process usually comes towards the end of that innovation process because it deals with the interlocking parts of the value chain that have to work together to create an innovation that’s successful because it is hard to imitate. Smaller insights or incremental improvements within a link of that value chain are better understood as the younger cousins of a fully-fledged idea: suggestions, insights and hunches. We often call them “idea fragments.” For instance, an R&D researcher at a food processing company might have a hunch that making a richer version of an already existing brand of yogurt might satisfy a segment of their customer base. This incremental step may indeed increase the loyalty of existing customers and perhaps attract a few new ones, but it doesn’t represent the creation of a new business concept that grows from new set of interlocking links on a value chain. In the example above, competitors could imitate the creamier version of this yogurt relatively easily.
[2] Categories could represent groupings of idea fragments that meet an unmet need. If an unmet need for yogurt consumers was finding more ways to integrate the health benefits of yogurt with other foods, the categories of suggestions could range from seeking ways to partner with other food companies and restaurants to educating consumers on how to use yogurt in a variety of foods and meals. Because the categories are related to a goal, they can sometimes be combined in a final idea.
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ABOUT THE AUTHORS
Mark Rennella. Senior Editor at IXL Center
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. Managing Director of IXL Center
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.
Volume II, Issue 3 September 4, 2018
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
Upstream Stage
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.
Midstream Stage
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.
Downstream Stage
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.
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ABOUT THE AUTHORS
Mark Rennella. Senior Editor at IXL Center
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. Managing Director of IXL Center
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.