By: Colin Lough
Innovation: We all have seen the biggest, most successful companies talk about it and share their success stories. We have read about it in the latest business journals and magazines. We all want it in our organization but the right recipe with the right ingredients is often elusive. In this article we will share different views and discuss key ingredients required to create, execute, and innovate in your organization.
Innovation presents one of the greatest challenges facing many organizations today. As business leaders, we must ultimately deliver business benefits. To this end we ask the question: “How do we support innovation strategy in a way that best sets our organization up for success and growth?”
According to the Harvard Business Review, 84% of global executives believe innovation is “extremely important”, but only 6% are satisfied with their innovation performance. (Newton, R. (2015, July 14). How to Co-Lead a team.)
Establishing high-performing innovation capabilities requires the understanding of key enablers and the ability tackle common pitfalls, but first we must look at what innovation really is.
By formal definition, innovation is expressed as “the act or process of introducing new ideas, devices, or methods”.(Merriam-Webster. 2016)
Innovation is not a singular entity that can be managed. It is a mix of complex capabilities that often push the edge of what we consider to be effective management and decision making disciplines. Creativity, invention, and ideation are the most recognizable components of innovation. But innovation is not realized until that wonderfully creative idea is executed and its benefits are realized. Most simply put, it can be explained as follows:
Innovation = Creativity + Execution of the right ideas + Delivery of business value
Business guru, Peter Drucker reinforces this critical mix of creativity and exaction in the following ideas:
- “Creativity is only one part of successful innovation.”
- “There are a lot of ‘idea people’ but a scarcity of ‘innovators.'”
- “Organizations need people who can take a good idea and convert it into reality.”
We must recognize the importance of the creative “front-end” of innovation while establishing a dependable bridge that takes ideas into a structure portfolio, program, and project delivery environment. This critical tie to execution ensures innovation is truly realized by providing targeted value to the organization.
Innovation is a resource allocation problem, not an idea problem.
While innovation is best recognized in the application of products or services, it can also be applied to processes as well as business model evolution. Examples includes Toyota’s assembly line and Dell selling custom PCs direct to customers. However, to best execute and deliver on game-changing ideas, we must first understand the keys to their success.
In reviewing key enablers to innovation, we can identify a number of recurring themes:
- Innovation culture and creativity – Innovation is directly proportional to the mindset and support of senior management. Fostering the best ideas and creative teams needed to excel at innovation requires executive sponsorship and supportive leadership who are willing to protect and enable their teams as well as drive the creation of an innovative culture.
- Resource optimization – Innovation is a resource allocation problem, not an idea problem. It is easy to assume that companies who fail at innovation fail to come up with the best ideas; but many of them had wonderful ideas that were simply undercut or stifled with limited support or funding. Innovation strategy must align with the organization strategy. It must clearly address a specific problem, question, or need within the organization and align in a way that best directs and guides the organization.
- Innovation framework – The proper processes, mechanisms, and organizational structures need to be in place for innovation to be successful. This includes having the right incentives in place to reward for employees, and establishing an open environment with the right teams and tools for success. Innovation is supported by effective collaboration and decision-making throughout an ideas lifecycle as it progresses from elaboration, selection, execution, and delivery of targeted benefits.
In essence, the key enablers for innovation success can all be summarized as relating to people, strategy, and execution.
On the opposite end of the spectrum, there are seemingly countless reasons causing organizations to stumble with innovation. Many of those reasons stem from simply failing to fully stay true to the key enablers. However, a few other common pitfalls are apparent. In many organizations, nearly all current management models are actually stacked against innovation rather than in support of it. The question of “how is the business performing” is so instinctive and so pervasive that it often creates a vacuum around uncertain performance data from these new or experimental projects in a way that can constrict them to the point of failure.
In many organizations, nearly all current management models are actually stacked against innovation rather than in support of it.
Along the same lines is a lack of common understanding around organizational risk. It is imperative for management to understand how much risk the organization is willing to take on. Without protection or empowerment to explore greener (and riskier) pastures, employees feel they need to take personal risks or become mavericks to innovate, which could potentially come at the expense of their own career. So along with inadequate enablement of the right people, strategy, and processes, major pitfalls can also arise in the form of overly-constrictive management practices and failure to define or accept the appropriate level of risk.
Supporting the innovation environment
After defining innovation, understanding the key enablers, and examining some of the most common pitfalls, we now have a clearer picture of how portfolio management, program management, project management, and organization change management methodologies must align in a way that supports rather than hinders innovation. If innovation is to be fostered in conventional organizations, we must recognize that the role and practices of management require innovation as well. However, the value added from portfolio, program, and project leadership is undeniable, and innovative teams realize the greatest benefits from the following:
People leadership with a culture of support and trust – We must enable a work environment of openness built on trust, where every member of the team feels free to express their views and opinions without fear of ridicule or reprisal. It is this diversity of people and ideas that truly drives the most innovative organizations. We must set the context, guide the process, clearly communicate decisions and actions, shield creative teams, appreciate distinctiveness in people and their thinking, and welcome change. Furthermore, we must also ensure that objectives are clearly defined, quantifiable, and measurable. It is not enough to simply decide to innovate as an organization; we must push for an honest understanding of where the organization currently stands and what the end-goal of innovation is going to bring.
- Collaboration – Portfolios, programs, and projects are implemented by people. Therefore, the ability to collaborate and work effectively together is critical. We must focus on the most important issues and juggle priorities quickly and effectively. Innovation success comes from continual scanning of the business climate and understanding of priorities and concerns of others.
- Planning – Without intuitive planning, no one knows what to do and when to have it finished. Given that innovation requires execution to succeed, this is where Portfolio Directors, Program Managers and Project Managers can create enormous value. Organizational portfolios and complex program and projects require rigorous planning, tracking, and collaboration, and the proper tools and reporting can help these endeavors succeed without risking innovation. There are a different tools to choose from depending on the size of your portfolio, program, or project – some have even been created to support innovation-specific project delivery.
- Risk Management – It is imperative that we define and understand the true level of risk our organization is willing to take on. Thomas Edison once said, “If I find 10,000 ways something won’t work, I am not discouraged; every wrong attempt discarded is often a step forward.” By determining the true level of accepted and understood risk, we are best positioned to give our teams enough creative flexibility and security that they need to experiment without fear of punishment or reprimand for potential failures along the way.
In supporting innovation, we see that culture, leadership, collaboration, planning, and risk management are the primary areas of value-added support.
Innovation executes our new inventions and creative ideas. It requires alignment with organization strategy, executive sponsorship, resources, and an integrate framework of processes. Major pitfalls include failing to ensure proper support in any of these areas, management structures that inhibit the flow of creative ideas, and lack of understanding and visibility of organizational risk. Though there are a number of other hats we must wear in the world of business, those who execute tactfully in the areas of leadership, collaboration, planning, and risk management will enable their organization and teams to perform at the highest level with the best chance of success. While “ideation” might be the most recognizable and glamorous part of innovation, ideas go nowhere without execution – this is what makes execution essential and ultimately leads to successful innovation.
By Colin Lough
About the author
Colin Lough is a Program and Change Management Consultant in Silicon Valley, the heart of innovation & leading technology companies. He has worked on initiatives focusing on time-to-market within financial services, energy and hi-tech sectors. Colin’s advisory experience covers a broad range of services: delivery excellence, change management, portfolio optimization, and IT transformation.