1. Eight powerful ways to generate great ideas

    September 10, 2016 by ahmed

     

    Originally posted on Innovation Resource by Robert B. Tucker

    For most of my professional life, I’ve studied the creative habits of highly successful innovators and the organizations they lead. Turns out there’s wide variance in how these individuals achieve greatness. A common trait emerges in how they approach idea generation. Virtually every one of them at some point devised a conscious process to stimulate the input, throughput and output of ideas on a constant basis. They use a series of routines, habits, and techniques to keep their “idea factories” operating at peak performance levels day in and day out.

    Check out their methods below to generate a breakthrough process of your own:

    1. Identify what gets your creative juices flowing. As an innovation speaker and coach, I’m in front of clients and audiences on a weekly basis. I use these occasions to do quick surveys, and whenever possible in-depth interviews to supplement the more quantitative research we also do. For example: my recent research indicates that the typical manager today needs three to four times as many ideas as did their counterpart a decade ago. Another finding: fifteen to twenty percent of us hatch our best ideas in the middle of the night. For others, taking a shower or driving is another frequent idea-stimulant. Suggestion: If there’s a time of day when you do your best thinking, plan for it. Make it part of your routine. If there’s a particular spot in your home or office that gets your creative juices flowing —be it the kitchen table or the bathtub or an obscure conference room– set aside time to sit quietly in that space, alone and free of noise and distraction.

    2. Inspect your idea factory frequently. What does your “things to do” list reveal about the types of ideas you’re working on just now? Are most of them tactical– pick up the dry cleaning, process the payroll, do the budget, etc. — or are there also some big picture ideas on your radar as well? If your big ideas list is nonexistent, it may be time to identify larger goals and projects. How about your “bucket list” – places you want to see before you “kick the bucket.” And goals for where you want to be one year, three years, and ten years out. Suggestion: start paying closer attention to all your ideas, regardless of category. And regularly inspect, prioritize, sort, eliminate and retool your idea productivity.

    3. Download ideas the moment they occur. Silicon Valley marketing guru Regis McKenna told me about his personal process for generating ideas. Whether attending board meetings, relaxing with his family, or conversing with colleagues, he takes along a moleskin idea notebook and jots down ideas as they occur. “You’re sitting there in that meeting, and something is said that relates to something else you’re working on, and boom – you get an idea. I’m always in this mode of looking for better ways of doing things.” Innovators like McKenna are always alert – always ready to capture ideas. They pounce. They’re like vacuum cleaners. Suggestion: If you ever find yourself muttering: “I don’t need to write down that idea, I’ll remember it” take stock. It could indicate you’re not serious about taking action. Innovators know that ideation (coming up with ideas) without implementation is mere hallucination. The human mind is a great mechanism for hatching ideas. But it’s a lousy place for storing them. Download immediately.

    4. Study the personal best practices of the innovators around you. Eleanor Roosevelt once commented that “small minds talk about people, and average minds talk about events. Great minds discuss ideas.” If you’re lucky to have even one person in your life that loves to discuss ideas, you are blessed. Because the greats know that the people in our lives can often be the catalysts to think bigger. There’s got to be humility mixed with courage and persistence. Wayne Silby, founder of Thee Calvert Group, and originator of the financial services industry’s first social investment fund, once told me: “I spend a lot of my time making sure people recognize that I come up with ideas, that some of them are good. And most of them are bad. What we have to do together as a management team is to sort out the good ones from the bad ones.”

    5. Manage your mental environment. Harvard professor Teresa Amabile is famous for her studies of creativity in the workplace. Her research shows that people are most likely to have new ideas on days when they feel happy, and that emotional upset is a creativity killer. “Of all the events that engage people at work,” reports Amabile, “the single most important driver by far is not bonuses or rewards, but simply feelings that ‘I’m making progress’ in the projects I’m working on.” When we’re around negative people, or dealing with situations fraught with negative emotion, creativity is blocked. So take charge of your creative environment. Avoid negative people as much as possible, or meet with them later in the day. Regroup from such encounters and make an effort to be with people in your life that stimulate your Opportunity Mindset.

    6. Pay attention to the happy accidents in your life. One way to hatch brilliant ideas is simply to pay more attention to serendipitous events in your life. When researcher Jeannette Garcia made a mixing error in her IBM lab in San Jose, California, she returned to find a hard white plastic that has incredible new properties. Garcia had inadvertently discovered a new family of advanced materials. These polymers are light and strong and can be easily reformed to make products recyclable, so they have great commercial promise. A surprisingly large number of inventions are the result of “happy accidents” including: Velcro, Nutrasweet, Viagra, Scotchgaard, FedEx, Silly Putty, and many others. What about the happy accidents in your life? For example: You chat with an Uber driver about a project you’re working on, and voila, the conversation shifts your perspective. You happen upon data that shows surprisingly strong sales of a particular product your company sells: that too is a happy accident. But if we’re not paying attention and open to new possibilities, we can get so busy working our “things to do today” lists that we overlook the serendipitous opportunities.

    7. Look for ideas by wandering around, asking questions. In the mid-1980s, I interviewed the legendary Bill Gore, founder of W.L. Gore and Associates, and consistently one of the most innovative companies in the world. Bill told me about his favorite method of generating ideas. “I walk through the plant and I see a piece of equipment that’s being built in the shop,” Gore explained. “I inquire about how it’s designed. And I scratch my head and say, ‘You know, it would be so much easier, so much better if it could be done this way instead of that way. Why don’t we do it that way?’” Gore’s habit of “managing by walking around” and asking questions might seem heavy-handed. But his team loved him for it. He took an interest in their work and wasn’t afraid to challenge their approach.

    8. Take a Doug Day. Doug Greene was the founder of New Hope Natural Media, a pioneer in the natural and organic foods industry and one of the fastest growing companies in America. Here’s how Doug described his favorite method of generating ideas to me in an interview: “Once a month I schedule what I refer to as a Doug Day. I create a block of time where I have absolutely nothing to do: no appointments. I’ll go to a different environment. I’ll sit and draw or whatever my first instincts are to do. I think about my team. I think about my level of passion and what’s going on with my energy level. I think about opportunities. And I have to say that if I hadn’t taken those Doug Days since I started the company, I wouldn’t have had nearly the success that we’ve enjoyed, and I wouldn’t have had the quality of life.” Imagine how refreshed and rejuvenated you would feel, and how many ideas you might come up with, if you allowed yourself to take a Doug Day.


  2. Seven fundamentals of a winning innovation team

    August 19, 2016 by ahmed

     

    Originally posted on The Innovation Resource by Robert Tucker

    Sooner or later, you’re going to be asked to lead an innovation team. This will be your time to shine, if you’re up to the challenge. The distinguishing aspect of leading a special purpose team is that you’re not in control, you can only influence behavior. You’re tasked with figuring out how to do something new, so you and your mates are going on a learning journey. So what you do in the formative stages will greatly impact the team’s chances of success. Follow these seven suggestions to guide your success:

    1. Keep team size small, even for big projects. In Silicon Valley, the “pizza rule” has taken hold. If you can’t feed a team with two pizzas, your team is too big. Lots of research supports this notion. Once a group gets beyond five to seven people, productivity and effectiveness begin to decline. Communication becomes cumbersome. Managing becomes a pain. Players begin to disengage, and introverts withdraw. When it comes to team size, less is more.

    2. Pay attention to group chemistry and emotions. Researchers at Carnegie Mellon point to three factors that make a team highly functioning. 1) Members contributed equally to the team’s discussions, rather than letting one or two people dominate; 2) Members were better at reading complex emotional states; and 3) Teams with more women outperform teams with more men. The emotional component – how we feel when we are engaged with a team – truly matters but is all too often never discussed. Pay attention to how the people you’re inviting onto your team relate to others. Assess human factors like trust, empathy, ability to resolve conflict, and seek and offer forgiveness. Acknowledge people’s selfless behavior and achievements. Always give credit to your team rather than take credit yourself, and practice empathy at all times.

    3. Calculate people’s Teamwork Factor. Will Wright, developer of The Sims, Spore and other best-selling computer games, analyzes what he calls a person’s teamwork factor. “There is a matter of, how good is this person times their teamwork factor,” Wright told interviewer Adam Bryant. “You can have a great person who doesn’t really work well on the team, and they’re a net loss. You can have somebody who is not that great but they are really very good glue, and [they] could be a net gain.” Team members Wright considers “glue,” share information effectively, motivate and improve morale, and help out when somebody gets stuck. Be aware of not only the needed skill sets, but who works well together and who does not.

    4. Don’t go overboard with diversity. Can too much diversity be a detriment to team chemistry? Researchers at Wharton think so. Too much diversity of “mental models” can be a drag on forward progress, say professors Klein and Lim. If members of a team have a “shared, organized understanding and mental representation of knowledge” about the nature of the challenge, it can enhance coordination and effectiveness when the task at hand is complex, unpredictable, urgent and novel. The researchers concluded that team member who share common models can save time because they share a common body of knowledge.

    5. Establish a group process. Nancy Tennant, who led an amazingly successful innovation initiative at Whirlpool some years ago, once told me about joining an ad hoc governmental team tasked with solving a very big problem. “They brought a group of people together from all over the world to help them brainstorm. They spent a lot of money, put us in a room and said ‘think hard.’ But we didn’t know each other. We didn’t have a group process. And we just couldn’t do it.” A group without a process is like a ship without a rudder. It will have a harder time innovating. Establish team rules at the outset. Address how you’ll treat each other, how you’ll respect each other, and articulate how much of time each member is committing to the team. Effective teams establish clear goals and rules at the outset, and hold each other accountable.

    6. Pay attention to what is going on outside the team. Since your dedicated team is charged with getting something new accomplished, it is natural to think of it as the “innovation team.” But doing so leads those not part of the team wondering how the project will effect them, and whether they support or oppose the team’s challenge. You must be careful to begin building buy-in for your efforts from the very beginning. Day to day managers see innovation teams as a threat or a special case that should be ignored. Teams appointed by the CEO can be seen as the ‘CEO’s pet project’ leaving a chance for them to be condemned or subtly derailed. Team leaders and members must spend as much time working in the external environment as working in their team. Be sure to build trust and open communication with the rest of the organization.

    7. Pay attention to the 3Rs of innovation: Result, Reputation, and Residuals. What motivates people over the long haul is not money, but intrinsic rewards. Harvard’s Teresa Amabile’s research shows that feelings of accomplishment, that we are making progress, doing important work are the biggest motivators. As the team leader, keep the three Rs in mind: 1) Result. If you hit your target, you’ll have another accomplishment on your track record; 2) Reputation: your status in the organization rises. Senior management will be delighted. Colleagues will talk you up, praise your contribution, and invite you to join future projects. 3) Residuals: the lasting payout of participating in a successful collaborative team is that you get to see your “product” being used by customers, both internal and external. You know you’ve made a difference, solved a problem, or created an opportunity for the organization, your team, and most of all yourself.


  3. How the latest Baldrige award winners manage for innovation

    June 3, 2016 by ahmed

     

    Originally posted Blogrige by Christine Schaefer

    The Baldrige Excellence Framework (which includes the Criteria for Performance Excellence) fosters an approach to innovation that is systematic and integrated throughout an organization. Innovation, as defined in the glossary of the 2015–2016 Baldrige framework booklet, means “making meaningful change to improve products, processes, or organizational effectiveness and create new value for stakeholders. Innovation involves adopting an idea, process, technology, product, or business model that is either new or new to its proposed application.”

    This contrasts with a popular conception of innovation focused more narrowly on new products made possible by technological advancements. While it certainly includes “breakthrough” product changes as innovations, the Baldrige definition also encompasses discontinuous changes in any of an organization’s key processes and even in its structure or business model.

    Underlining the importance of such significant changes in products, processes, and/or the business model that yield a discontinuous change in results and contribute to an organization’s long-term success, managing for innovation is one of the core values of the Baldrige framework.

    Successful organizational innovation, according to the Baldrige glossary, “is a multistep process of development and knowledge sharing, a decision to implement, implementation, evaluation, and learning.” Given this definition, it follows that the Baldrige Criteria for Performance Excellence ask an organization to define its innovation process (“How do you manage for innovation”), making the question an overall requirement in the “Operations” category (i.e., the key question for item 6.1c).

    So how do high-performing organizations respond to this question? In other words, what do good-to-excellent innovation processes look like? Consider the responses of the four organizations that most recently earned the prestigious Baldrige Award. The 2015 award recipients (honored at an April 2016 ceremony) are Charleston Area Medical Center Health System (a large health care organization), Charter School of San Diego (a K-12 education organization that is part of the county’s public school system), Mid-America Transplant (a nonprofit), and MidwayUSA (a small business and two-time Baldrige Award recipient). These Baldrige Award-winning organizations offer exemplary innovation processes for learning and inspiration from four different sectors.

    Baldrige Program Director Emeritus Harry Hertz observes in his Spring 2016 “Insights on the Road to Performance Excellence” column that the 2015 Baldrige Award recipients “have demonstrated a new level of maturity and commitment to fostering innovation.” Hertz’s column is based on his attendance at multiple presentations of the four organizations at the Baldrige Program’s annual Quest for Excellence® Conference in April.

    Hertz attributes the organizations’ success with innovation to their “leaders’ setting the environment and establishing formal innovation processes” so that “innovation has become truly embedded in the very core of how these organizations operate.” He also notes that “all four organizations clearly demonstrate the key ingredients for innovation: a supportive environment and intelligent risk taking.”

    Fortunately, for those interested in learning from national role models identified through the Baldrige Award, application summaries for all award recipients are publicly available on the Baldrige Program’s website (on the data-rich award recipient page). Drawing from those posted documents, following are descriptions of the innovation processes of the 2015 recipients.

    Charleston Area Medical Center (CAMC) Health System

    CAMC Health System describes and depicts its Innovation Management System at 6.1c in its Baldrige Award application. The process begins with three key sources for innovation: strategic opportunities identified during the Strategic Planning Process, ideas that come from internal performance reviews, and unanticipated sources.

    “Once analysis is completed and we determine through the use of intelligent risk criteria … that the strategic opportunity should be pursued,” states the organization, “we develop the implementation plan, seek approval from the appropriate decision-making group … , staff, and pilot the innovation” and “make financial and other resources available to pursue these opportunities through adjustments to budgets.”

    The organization then monitors progress and either scales up and fully deploys innovations that meet key success measures or discontinues those that don’t meet targets as part of the ongoing review process in order to support higher-level opportunities. CAMC Health System depicts this innovation process in a flow chart (below).

    CAMC-Health-System-Innovation-Management-Process

    Charter School of San Diego (CSSD)

    According to its Baldrige Award application, CSSD’s innovation management process begins with determining strategic opportunities to pursue through consideration of internal and external success factors: “Once an idea or opportunity is received through the listening methods, senior leaders determine alignment to the vision, mission, and values; strategic initiatives, and the core competency,” states the organization. “A champion is identified based on his/her capability and capacity. Research is conducted and data [are] gathered through the [Process Design and Improvement System] PDIS. Senior leaders consider the data to determine if financial and other resources should be made available to support the idea or opportunity. Specific measures are identified to test the viability of the process.”

    CSSD relies on effective financial management to make financial and other resources available to support innovation and risk taking. In addition to “responsible cash flow management, budget controls, revenue enhancement, and expenditure controls,” CSSD’s maintenance of reserve accounts is a “key component to financing innovation.” As it states in its application, CSSD has three reserve funds available, with one targeted to support innovation. CSSD makes decisions to discontinue pursuing an opportunity through analysis of measures during its PDIS process.

    Beyond its process for managing innovation, as Hertz has pointed out, “CSSD was created with innovation at its core. Every system and process was a design innovation.” In addition, as CSSD shared at the Baldrige Program’s Quest Conference and Hertz subsequently describes, “The organization’s July strategic initiatives meeting includes an education reform and innovation plan for the short term (two years or less) and the long term.”

    Mid-America Transplant

    In its Baldrige Award application summary, Mid-America Transplant (MTS) states that “innovation is a core value and core competency at MTS and is embedded in the culture from the governance level with a Board of Directors vested in intelligent risk taking through the mission-driven workforce.” According to Hertz, at the 2016 Quest conference MTS CEO Diane Brockmeier described the five characteristics of her organization’s innovation culture as (1) visionary leadership with a sense of urgency; (2) transparent, two-way communication; (3) mission-driven, cross-functional teams; (4) a commitment to learning; and (5) effective external collaboration.”

    Mid-America-Transplant-Improvement-and-Innovation-Process

    MTS both describes and depicts its Improvement and Innovation Process (IIP; shown above) in its Baldrige Award application summary at 6.1c. “Innovation is initiated and managed through the IIP (Figure 6.1-2), which is an integral part of the [Operational Management Process] OMP, Learning and Development System] LDS, and the [Strategic Thinking Process] STP,” states the nonprofit organization.

    According to MTS’s application, after discussion of an innovation originates in the STP, OMP, or LDS, a business plan is developed. The Leadership Team prioritizes plans in Strategic Discussions (SDs), and an innovation team composed of staff members from multiple departments may be formed. Innovation teams use performance improvement tools and data analysis to develop new processes to test and implement. Plans determined to be aligned with the organization’s vision, mission, and values may be implemented in MTS operations during the “Deploy Plan” step of the IIP process; those determined to be intelligent risks are managed through a method called the MTS Incubator. After that, states MTS, “deployment and integration of plans include effectiveness checks and re-evaluation as needed.”

    Embedded in the IIP is MTS’s Priority Matrix, which helps MTS identify intelligent risks and validate (at LT meetings) the scope, schedule, and resources of those it decides to pursue. Decisions to discontinue such opportunities are also evaluated through the IIP, states MTS. “The Effectiveness Check and Priority Matrix, key components of the IIP, allow for a systematic review of current projects as well as proposed projects and ensure the agility to enhance support for higher-priority opportunities.”

    MidwayUSA

    “We manage innovation by developing, categorizing, prioritizing, and implementing strategically important ideas,” states two-time Baldrige Award recipient MidwayUSA in its 2015 Baldrige Award application summary. Among the means that the small business cites for developing innovation are strategic planning meetings, annual process reviews, and customer input methods, as well as numerous methods and meetings that focus on knowledge sharing, organizational performance (based on the Baldrige framework), and future opportunities.

    MidwayUSA’s 2015 Baldrige application summary also references formal calls for innovation, including employee focus groups. The organization records all innovation ideas in its Performance Improvement System (PIS), which all employees can access to add ideas. “We currently have over 3,400 ideas captured in our PIS in various stages of consideration and implementation,” states MidwayUSA’s application. “Since 2011 we have implemented over 2,000 ideas.”

    MidwayUSA describes how it reviews and prioritizes innovative ideas to pursue through its strategic and departmental performance meetings as well as its Work Process Management Process and Continuous Improvement meetings. The company captures innovation ideas that it identifies as strategically important in its “Bucket List” in the PIS, and it reviews these ideas for consideration as action plans to be included in its strategic plan.

    How does your organization manage for innovation?


  4. Toward a world class innovation strategy: Dubai Statistics Center leading the way

    May 17, 2016 by ahmed

    3rd Progress Sharing Day

    On the 28th of April, the 3rd Progress Sharing Day of Dubai We Learn was held. For those new to the initiative, this initiative is led by the Dubai Government Excellence Programme and the Centre of Organisational Excellence Research (COER), New Zealand. The initiative aims to empower a culture of institutional learning and the transfer and exchange of knowledge within Dubai’s government sector.

    The initiative consists of the mentoring of 13 benchmarking projects, training in organisational learning and benchmarking, and the provision of a best practice resource, http://www.BPIR.com, for all 37 government entities.

    To assist in the sharing of best practices, 3 progress sharing days for the 13 benchmarking projects have been held. During these days, each team describes the progress they have made with their projects. As all project teams are using the TRADE benchmarking methodology it is easy to compare progress. Some teams have recorded video clips to showcase their work and the benefits they are obtaining, such as the example below from Dubai Municipality.


    To add interest to the day, each team is given 10 minutes to present and the audience vote on which projects have made most progress. At the 3rd Progress Sharing Day, 4 teams were selected as achieving the most progress with Dubai Statistics Centre (DSC) achieving the most votes. The four projects were:

    • Shams Dubai Initiative (Customer awareness & engagement) – Dubai Electricity & Water Authority
    • Improving Purchasing Channels – Dubai Municipality
    • People Happiness – Knowledge & Human Development Authority
    • Innovative Statistics – Dubai Statistics Center (DSC)

    The aim of DSC’s project is to “identify best practices in Innovation to enable DSC to develop and implement a strategy for innovation to improve its processes and services”.

    DSC started its project by undertaking a number of innovation self-assessments. The self-assessment tools they used were from the BPIR.com. Of the 5 Innovation Self-assessment Tools, DSC found the self-assessment titled “Innovation Maturity (organisation-wide)” the most comprehensive and useful. The self-assessments enabled DSC to identify its current level of Innovation Maturity and identify specifically what needed to be improved. In particular, they identified the need to improve in: innovation strategies, innovation measurement, innovation labs, suggestion schemes and innovative statistical information delivery.
    During the search for potential benchmarking partners, DSC used the identified areas of improvement as criteria for selecting benchmarking partners. For example, DSC searched for organisations with an innovation strategy that resulted in an innovative culture.

    By the 3rd Progress Sharing Day, DSC had finished benchmarking visits to four organisations locally and obtained many best practices through internet research. Some examples of the practices that they are considering implementing are:

    • Innovation Management Standard: The European Innovation Management Standard CEN/TS 16555 has been underway since 2008, and as such it incorporates a lot of the elements which are believed to constitute current best practices on innovation management. The Standard consists of 7 documents:
      • Innovation management system (16555-1:2013)
      • Strategic intelligence management (16555-2:2014)
      • Innovation thinking (16555-2:2014)
      • Intellectual property management (16555-4:2014)
      • Collaboration management (16555-5:2014)
      • Creativity management (16555-6:2014)
      • Innovation management assessment (16555-7, 2015)
    • e-Cap System: An electronic system to follow-up corrective actions, analyse risks, prioritize actions and raise status reports as they consider any corrective action as a creative idea.
    • Government Innovation Lab Manual: A manual designed to provide tools and techniques on how to implement an innovation lab from brainstorming workshop to idea implementation.
    • Customer Pain Point: A system to find the problems faced by the customer in order to come up with innovative solutions, in other word it is a customer inspired innovation.

    For more information about this initiative download the attached article and sign-up up to COER’s newsletter to receive the latest updates.


  5. Five key points to consider when developing an innovation strategy

    May 5, 2016 by ahmed

     

    Originally posted on Innovation Management by Wouter Koetzier & Christopher Schorling

    From our talks with innovation management practitioners and business executives it seems that not many organizations have a well-defined and integrated innovation strategy. To find out more about how to go about creating and executing such a strategy, we spoke to Wouter Koetzier and Christopher Schorling at Acceture who encourage a very pragmatic and execution-oriented approach.

    1. When an organization realizes that they need an innovation strategy, what are the five key things they need to consider very carefully when starting to develop it?

    The innovation strategy defines the role of innovation and sets the direction for innovation execution. However, the role of innovation in helping organizations achieve growth targets is often unclear and the revenue growth from innovation is insufficient, unless managed with great rigor. While there is lots of theory about and many good (and not so good) books on innovation strategy, many companies fail to develop and execute an innovation strategy.We work with clients to help them take a very pragmatic and execution-oriented view on this.

    Once we start to work with a client to develop an innovation strategy, we seek to develop a common understanding of the definition of the innovation strategy’s purpose. When we speak about innovation at Accenture, we speak about successfully commercializing new ideas, i.e. inventions with market impact or in other words the notion of innovation = invention x scaling. However, ‘new’ can have different meanings, ranging from new on the world market to new in one specific industry, but already established in another industry, to new to a company or maybe even just new to some of us. The word ‘strategy’ implies that we are talking about something with a potentially large impact on the company, i.e. does not include just a series of incremental product line extensions.

    Based on this understanding, the following are five things that we believe make up a good innovation strategy:

    First, an innovation strategy needs to be truly inspiring and should describe a desirable future state for the company.
    This is a high bar as it rules out a single-minded focus on incremental add-ons to the business. Rather, it requires the organization to aim higher. You have probably often read in literature that the innovation strategy should be derived from the corporate strategy to clearly define how the organization sees opportunities for growth and makes explicit choices about the role of innovation, which is absolutely not wrong. Still, we think that to some extent it should be the other way around. Opportunities and possibilities formulated in an innovation strategy should actually provide input and shape the overall corporate strategy. Invention is done everywhere. In fact, the value that is derived for many large companies by scouting inventions, connecting the dots between many singular ideas and inventions into one big platform innovation and fully scaling it to maximize potential benefits.

    Second, the innovation strategy needs to be ambitious in terms of providing the basis to break away from the competition, beat the competition, and create new spaces.
    Too many innovation strategies that we have seen tend to be “me too” (and mostly incremental). Even if executed according to plan, they fail to deliver the truly sustainable competitive advantages that can only be derived by performing above the overall market growth level and exceeding average profit margins.

    Again, the innovation strategy should aim higher and help the company outpace anybody else in a contested space. If the so-called strategy does not seek to push those boundaries, the strategy in all practicality is probably just a product roadmap of business extensions, not an innovation strategy.

    Third, the process of developing the strategy needs to be open
    Open means bringing the outside in and working under the assumption that the other seven billion people on our planet may have insights that do not exist within a particular company’s boundaries. Even today this is something that many people find hard to accept. One client once joked: “We actually invented the not-invented-here-syndrome in our company.” Companies are settled into the way they innovate.

    The statement above gives you a good idea of how hard it is for companies to open up and avoid merely settling. At the same time, this should not be mistaken as an excuse for failing to come up with a great innovation strategy based on internal ideas and conviction. Being open is just a great way to raise the bar in terms of ambition and to more quickly get to more mature plans. By the way, as opening up the innovation pipeline is not just a matter of mindset, new technologies play an important role in making openness commercially feasible.

    Fourth, an innovation strategy must also be specific to the time in which it is developed
    As it is grounded in the reality of a company’s environment, and it reflects the available capabilities, technologies and gaps that may need to be filled. What do we mean by this? It is important to describe with great precision which specific innovation initiatives should be pursued, and where to invest and compete.
    The strategy should answer a number of questions like: What growth platforms represent the best chances for the company to win in the market? And, what is the rough business case per growth platform? This is the step where the overall risk related to the execution of the innovation strategy should be assessed in the context of the overall company situation. It is not by coincidence but due to the inherent uncertainty that venture capital funds place a portfolio of bets. Still, a corporation should carefully consider how many eggs to put in a single basket. But bear in mind – Mark Zuckerberg recently put it nicely: “The riskiest thing is to take no risks.” (Accompanying Letter to Investors to the United States Securities and Exchange Commission Registration Statement, 2012).

    The innovation strategy also needs to explore possible market developments and scenarios while defining the most attractive market opportunities.

    Finally, an innovation strategy needs to be adaptive and to evolve over time
    Incorporate learning, allow adjustments to the desired course and maybe even allow an organization to cut its losses if required. This typically does not fit with the classic annual corporate planning cycle. An innovation strategy and the respective execution should be capable of adapting the moment there are new insights, even if that requires moving in multiple directions to raise the aspiration you had at the beginning. After all, Rome was not built in a day. Likewise, innovation sometimes requires more time than originally estimated.

    2. How should organizations use an innovation strategy to avoid it just collecting dust on a shelf or simply filling memory on a computer? For example, what can you tell us about steps an organization can take to create the required momentum for executing on the innovation strategy?

    This question may actually imply an approach for developing an innovation strategy that we believe would not be very promising. Sorry for breaking this up, but to some extent it seems to indicate a sequential approach consisting of a strategy development phase decoupled from the execution of the strategy. The criteria associated with a strong innovation strategy as we outlined above consists of being inspirational, ambitious, grounded in reality and adaptive. We like to think of innovation strategy development and execution as a highly overlapping if not integrated process. So, if the innovation strategy meets the criteria above, we believe the strategy is not likely to collect dust on a shelf. But of course, it is not that simple. There are more steps a company should take to create the required momentum.

    The first one is about innovation leadership
    This may sound obvious, but in our experience it is the number one reason for success or failure. The leadership should come from the top – at the very least in the form of active top management sponsorship but better in form of active personal involvement, guidance and inspiration for the respective innovation teams. But, leadership, which can come in different shapes and forms, also is supposed to come from all key members of the innovation team. Not even the most brilliantly articulated innovation idea or plan can compensate the active involvement of a dedicated innovation team. Innovation strategy has to be more than just empty phrases of confession to innovation. It needs high-level commitment of someone who is obsessed with innovation.

    Second, the execution of an innovation strategy needs a home in or outside the organization
    Many believe that innovation is better done in a start-up environment, rather than in a corporation. Indeed, there are many reasons why innovation is not easily executed within a corporate environment, but entrepreneurs know that it is not easy in a start-up either. There are great success stories of corporate innovators (e.g. Apple and Proctor & Gamble) and for every successful startup there are probably five to ten that failed. So, we should not be too simplistic about this. Multiple considerations drive the decision about the optimal home. For example, proximity to the core business, availability of critical talent, and cost synergies should all be considered.

    We recommend following two simple rules: The higher the risk of conflict with the current core business, the more separated your innovation should be from the parent organization; and the more your innovation requires access to existing corporate assets, the less separated it should be from the parent organization. Also, corporations should face the reality that innovating in the context of running an important daily business is virtually impossible. In contrast, management is strongly focused on today’s sales targets and this quarter’s financial results. But, making innovation happen is a full-time job and mostly even a lifetime obsession.

    Corporations should face the reality that innovating in the context of running an important daily business is virtually impossible.

    The third step is about focus and being realistic about how many and which kind of innovation initiatives a company can drive simultaneously
    Even though we recommend paying particular attention to big ideas, we know that the success of disruptive innovations is highly uncertain and understand that it is important for companies, especially large organizations, to have a clear picture of predictable outcomes. No automotive supplier will develop a new product out-of-the-box without already having the demand of an automotive OEM. Overcoming this reality may be the most difficult step an organization must take to successfully execute the innovation strategy.

    Organizations should differentiate between innovations that are developed for existing products; those sold on existing channels to well-known customers with a highly-predictable payoff; and those (disruptive) innovations with an uncertain future and yet the potential for massive payoffs. When Apple developed the first iPhone, they were enthusiastic and obsessed with the idea of how they could transform the mobile phone market, even if they could not predict how successful the product could be. But, what they did is focus and put the effort on one project, the iPhone (‘Steve Jobs’ by Isaacson, 2011).

    We often see companies with too many projects that are too incremental in nature. Leading innovators run a focused portfolio of innovation projects with a conscious risk-growth potential trade-off decision. You need to find a way forward and determine how to avoid the Innovation Death Spiral.

    To do that, companies need to decide which innovation to follow, how to significantly increase their technology success rate and reduce their time to market. One way to achieve that is to open up the innovation process, i.e. embrace open innovation. The opportunity cost of closed innovation is low access to brain power, expertise, existing solutions and problem solving capacity. By contrast, a paradigm shift to open innovation, where companies invite external experts to participate in the innovation process, accelerates and de-risks innovation programs and creates innovation at much lower costs and with a higher probability of finding the right solution.

    Once the context for execution is set up, the focus should be on building the right team. The mix of people required strongly depends on the specifics of the strategy to be executed, but there are a few common requirements – next to the leadership profile already mentioned. The people involved need to find a certain level of excitement and thrill in taking a risk to achieve something big. When one of our clients tried to form a team to go after a substantial technology innovation opportunity in a separate organization the main concern among some of the internal researchers interviewed was, how would the newly created entity pay contributions to their retirement plan. It was easy to see that this mindset would not fit with a highly ambiguous environment. Another interesting question in this context is: How much experience should such a team have? Too much “relevant experience” sometimes stands in the way of approaching something in a new way. So it may be more advantageous to place more experienced people in advisory roles so that the innovation team can take what it believes it needs but is not slowed down in its zeal to explore new paths.

    To conclude, we do not want to create the impression that successfully executing an innovation strategy is deterministically plannable. However, adhering to the principles described above increases the odds of success, even if it does not guarantee success. Smart hard work needs to come together with a bit of luck. Steve Jobs, one of the most gifted innovators of our time, put it like this: “You have to trust in something. Your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life” (Stanford Commencement Speech, 2005). So, place your bets, tilt your odds, and make your luck.

    We often see companies with too many projects that are too incremental in nature.