Getting Out of Your Way to Innovate

Bureaucratic inertia and management faithlessness aside, making your pitch to innovate involves knowing not only consumer needs yet also management needs. Maybe upper management doesn’t know what you do, so send them a short email weekly (2-3 sentences total) to tell them what you’re up to. By opening up a communication channel you can find out what upper management needs. Upper management is supposed to be driven by the company’s strategic plan, so plug onto the strategic plan, and innovate accordingly. If done diplomatically, communication channels can reduce bureaucratic inertia throughout the organization.

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Innovation Metrics Revisited

Since we last spoke about metrics in 2009, metrics have remained the critical factor in measuring innovation success. Metrics are used as key performance indicators–how much bang are you getting for your buck? Overall, everyone should assess the percent of sales revenue generated from new products commercialized within the last five years. Other metrics that measure milestone in the innovation process include number of ideas generated, number of ideation sessions, number of patents filed and issued, benckmarking innovation costs and efficiency versus competitors, and product costs versus product margins.

Companies need a structured, repeatable, and sustainable innovation process that is flexible and adaptable to the needs of the market audience.

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Risk Taking in Innovation

Dear Upper Management,

We want to create new products for our company, yet have been blocked by numerous resources. We would like to understand better the reasons why our proposals are shut down with inadequate explanations by management. In addition, funding for new product development and consumer focus work has been cut to a bare minimum. At the risk of sharing career-ending insights, the upper management of this company appears to be risk averse. While the market share of our product sales is declining now is the time to innovate new products.

Our shareholders would also be pleased.

Sincerely,

Your R&D and Marketing Departments

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Properties of Innovation Leaders

Somebody within the organization needs to initiate the innovation process. What are the characteristics of innovation leaders? They are often different, operate differently, and go about things differently than most others in the organization. Typically they are adaptive and serves as a catalysts to change others’ perspectives in the organization. Such innovation leaders tend to have people skills (“emotional IQ”), communication skills, and are masters at building consensus among stakeholders within the organization.

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Your Innovation Culture

What innovation strategy and tactics best suits your company culture? Not all such strategies and attendant tactics will conform to your culture.

Who are your innovation players? Getting the right team members involves some legwork, as some high profile staff persons and “HIPOs” may not be the appropriate drivers, and some other staff persons may have hidden talents not readily perceived by management.

Do your employees really understand your customers’ needs? Yes, needs along the lines of existing product sales or services may be easy to identify, yet you may be able to take advantage of unmet customer needs that are closely allied with your existing sales efforts. These opportunities will provide additional sales to your existing customer base and perhaps bring in new customers.

Once you develop a new innovation strategy and process, how will you measure success and reward the key innovators in your organization? This depends on your culture and employee expectation(s).

Stepwise development and integration of new innovation processes can be expected to grow your company.

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Create Ideas, Innovate to Commercialize

Innovation is the application of creative ideas. One can create a new ingredient yet we need to deliver the ingredient in a vehicle acceptable to the end user, typically consumers.

Brainstorming creat ideas and possibilities. The complexity is how to commercialize that idea, and that is where innovation comes in.

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Creating an Innovation Culture

Most organizations, including companies, need to hand-pick individuals whose overall skill set complement each other and who can act as a team to drive innovation through the rest of the organization. Individuals drawn from marketing, finance, and the development side, these internal and external innovation drivers need to identify hurdles and create the right incentives to get new products to market launch. What has been found is that it is not the amount of money thrown at an opportunity yet the proper alignment of internal and external resources to effectively direct the product to market. By maintaining good relationships with the rest of the organization, the innovation team can work with the key pressure point people within the organization to overcome inertial hurdles.

By plugging into the long-term strategy of the organization, providing a perception of transparency of working progress of the innovation team, the ability to characterize the insights to consumer needs properly, not getting punished for taking educated risks, and mitigating upside and downside risks are critical to integrating the innovation team’s work in the organization.

The tactics for launching such an innovation team is getting commitment from candidates for the team, buy-in from senior management, creating clear tasks and goals for the team, clarify communication with senior leadership, and establish milestones for pregress towards the ultimate goal(s).

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Developing a Network for Your Innovation Environment

An innovation network exists inside and outside your organization. Inside, certain individuals will characteristically have the traits necessary to form strong innovation teams. Outside your organization, the function is called open innovation, sourcing innvotive ideas, intellectual property, products, services, and processess to augment and leverage your internal resources.

To outsource your innovation efforts, your organization could seek resources in areas that complement your product or service portfolios. Opening a web portal for vendors to solicit your business whereby you decide your needs.

Mapping your innovation environment is the first step. Determine the products and/or services you need that complement those in your organization. As part of your map, look at the scope of the work in which your organization has been involved and develop a tragectory of where your organization is going. Then populate the map with potential vendors and partners your organization needs. Rank the partners and vendors based on your priorities. Once the innovation environmental map is developed and several in-sourcing and outsourcing tasks have been accomplished, evaluate their value in terms of performance, mutual benefit, complementary and respective core competencies, and respective needs and expectations.

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Theodore Forstmann

All industries have innovative pioneers, and the financial industry had one with Theodore Forstmann, who recently passed away at the age of 71. Theodore Forstmann, with others, pioneered leveraged buyouts (LBOs), which is responsible for not only leveraging new companies, but also leveraging and enabling dormant human capital already within organizations.

Mr. Forstmann is associated with the following quote: “The entrepreneur, as a creator of the new and a destroyer of the old, is constantly in conflict with convention. He inhabits a world where belief precedes results, and where the best possibilities are usually invisible to others. His world is dominated by denial, rejection, difficulty, and doubt. And although as an innovator, he is unceasingly imitated when successful, he always remains an outsider to the ‘establishment.'”

If organizations have such individuals within their ranks, perhaps they will make productive members of innovation teams.

reference: WSJ, editorial page, Nov. 22, 2011

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Barriers to Innovation

What are hurdles to creating disruptive innovation in your organization? Many organizations, including companies, do not set aside time and other resources to enable innovation.

First, some focus is needed to exert direction and space provided so staff (employees and external consultants) will not be overwhelmed. Second, marketing your wares to existing customers is a no-brainer, but getting new repeat customers is the key to growth and organizational sustainability. So look at what product and services your organization provides, couple your product with a service (or vice versa) to existing and new customers to get repeat business. Even adding some educational piece to your new offerring may interest these customers into providing your organization actionable ideas. Capturing the ideas that staff generate is critical to successfully innovating new technology for your customers.

Whether innovation resources reside as a stand-alone department in your organization, in the human resources or strategic planning department presents the first step to getting focus and applying resources to getting new repeat customers.

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