By: Andy Bruce
How do you turn innovation from a marketing concept into something tangible with an impact on the bottom line? There is of course no simple answer, and to succeed a different way of thinking and working is required
Innovation may be the hottest topic in business today, but whilst everybody talks about it and agrees that it is important, there is no one general roadmap to success. So how do you turn innovation from a marketing concept into something tangible with an impact on the bottom line? There is of course no simple answer, and to succeed a different way of thinking and working is required – one that combines analytic and creative thinking, and that focuses as much on implementation as it does on ideation.
Practical innovation is therefore a key concern for many businesses. Increasing global competition over the last five years has brought growing pressures. Western businesses can’t make their products cheaper than the so-called BRICK countries Brazil, Russia, India, China, and Korea; so what can they do to differentiate themselves from the flood of companies targeting their markets from overseas? The developing countries are hungry, eager, and internet-enabled and pose a major threat, but these expanding markets also present many opportunities for expansion for companies willing to think differently and innovate. Companies in every country and all industry sectors must innovate to survive let alone thrive.
But for innovation to be more than a buzzword it has to be deeply embedded into a business’s structure. It was experiences with Nokia and Coca-Cola in particular, that led me to develop a model for integrated innovation management. Whilst these market leaders are not necessarily seen as the most creative companies, both have taken a sustainable approach to innovation involving every member of staff actively seeking out new opportunities and new and better ways of doing things.
As you seek to implement your approach to innovation, one caveat here is important: don’t expect every attempt at innovation to succeed. Most of the top global companies have had notable failures – think of Coke and their UK launch of Dasani, or Dyson’s attempt to move into washing machines. They’re not necessarily failures of innovation. Nine times out of ten, the reason innovation ideas fail is because those involved haven’t thought through the potential pitfalls and ‘what could go wrong’. Often the likely reasons for the failure aren’t difficult to spot – a consumer focus group could do it – but, historically the people in charge of innovation are enthusiastic positive thinkers and don’t want to look at the negative side.
I’m going to talk about the six “Ps” that companies that innovate successfully tend to get right: Planning, Pipeline, Process, Platform, People, and Performance. All are elements of an integrated framework – like a chain, it’s only as strong as the weakest link.
Planning reflects the fact that innovation needs to start with strategy. Over the next few years, what are the high-growth or high-revenue areas the CEO wants the company to focus on? What are the success factors something new will need to take into account? For a fizzy drink supplier, for example, an obvious strategic driver would be the trend toward healthy drinking. Planning therefore provides a context or focus for innovation activities, enable ideas to be generated that address critical business issues.
It isn’t, of course, enough just to have an idea. A pipeline reflects the fact that ideas must be captured, organised, screened, prioritised and managed. Unfortunately this is often done by who shouts the loudest or which senior manager has a pet idea. That’s not how you want to choose. Without a structured pipeline, people become disillusioned as they watch the organisation follow the wrong ideas.
Process is about managing creative ideas through to implementation – what is often called project management in other areas of business. Everybody likes to have a good idea, but somebody has to take it from the generic concept through to successful implementation. This includes everything from assessing the idea’s feasibility and creating a detailed business case, to developing, piloting, and implementing it – and, after rollout, helping to feed back good experience into further future ideas, or lessons on how not to do it.
Platform refers to web-based software that tracks an idea from its time in the pipeline to assessing its value post-implementation. It is not just a task and resource-planning tool; it gives senior managers visibility, control and confidence over the entire innovation portfolio. The software also ensures that all teams follow a common approach based on best practice, and provides the status reports needed at the regular review meetings.
An effective innovation framework also needs the commitment of key stakeholders: people. Senior managers need to be open to new ideas, as innovation thrives only in a supportive culture. There needs to be a champion who drives every idea through to completion, and an Executive sponsor who allocates the necessary budget, time, and resources, and motivates the team. And at all levels of the organisation people are effective the eyes and ears of the business, constantly scanning for market trends and competitor activity.
I like to cite Nokia, as a leader in the area of innovation. Mike Butler, then Managing Director of the Nokia UK Product Creation Centre, set only two ground rules for the 18 people who took part in an innovation workshop: “no ideas around time travel or tele-transportation, have fun” – he then walked out leaving the team to get on with it. Out of that initial workshop came ideas that now, ten years later, are helping convert Nokia from simple mobile handsets to complex lifestyle communications devices. Current new services such as making credit card payments via mobile phones and downloading music or games onto phones were ideas on the table in that workshop ten years ago.
The final P, drives all of this. The critical success factor for integrating and introducing innovation is how you monitor performance – defining the key innovation performance indicators, agreeing who sits in the monthly review meeting and focusing the agenda on innovation. Too often, today’s managers are too fixated by the company’s profit and loss statements, the information that impresses actual or prospective shareholders. But financial reports tend to focus on past performance, which I liken to trying to drive a car by looking in the rear-view mirror. Whilst keeping an eye on the current financials is important, future success depends on getting your plan for innovation right and implementing it effectively in order to keep your organisation that one step ahead.
Innovation needs champions, people who will drive through the problems and set backs, convince sceptics of the need to do new things and make a good idea produce results. Perhaps you are that champion: perhaps just for your team or division of your company, or perhaps for the entire organisation as the Chief Innovation Officer. If so you have an exciting time ahead. Remember, once a great idea is recorded it can never die; but there’s a lot to get right before you can be sure that it will fly.
Andy Bruce is widely respected as an authority in innovation management – covering the creative and innovation process from ideas to implementation. In his role as Director of Project-Leaders he has worked with corporate and public sector clients over the last fifteen years to help improve performance and profitability through the introduction of what he refers to as an Integrated Innovation Framework.