Implement Innovation

8/3/2019 Implement Innovation

1/30

Your Innovation Hub

INDEX

INTRODUCTION 1

CHAPTER 1 3History of InnovationInnovation and Economics

CHAPTER 2 6Ways to InnovateRisk, Failure, and InnovationThomas Edison on Innovation

CHAPTER 3 9The Innovation Hub

The Innovation PipelineEvaluation Criteria for IdeasInnovation is a Cross-Functional Activity

CHAPTER 4 14More about ValueThe Value ChainIdea GenerationCHAPTER 5 17Business InnovationProduct or Service InnovationMarketing InnovationProcess Innovation

CHAPTER 6 20

Problem Solving MethodologiesBuilding Innovation into Business ProcessesMaking Innovation a Habit

CHAPTER 7 25The Innovation PlatformInnovation and PeopleInnovation and PerformanceThe Integrated Innovation Framework

CONCLUSION 30

Page 1 of 30


2/30

Your Innovation Hub

INTRODUCTION

Innovation is the key to growing your business. Most likely, you already know this. What you maynot know is precisely how to go about incorporating innovative practices into your currentbusiness. In the following pages, you will learn the steps that you can take to maximize yoursuccess.

The word innovation is derived from the Latin innovatus, meaning renewal. In business, it is theprinciple of creating new products or services to increase market share and profits. There is adistinction between invention and innovation, though they are often used interchangeably incasual language. Invention is the idea itself, while innovation is the putting into practice of the fullyrealized idea. Ideas are great, but until they are implemented, they are not innovation. To be trulyinnovative, you must have the follow through.

Innovation has been called a convex value, referring to the shape of the growth curve on a graph,because it bears fruit in the future. Innovation is cyclical as opposed to linear. Every output is alsoan input, providing information that can be used to decide where to go in the future. Outputs feedback, as well, becoming a means of determining how effective a given procedure or tactic was,the flow that creates continuous improvement.

Innovators are bold and confident. They possess social intelligence, a combination of charisma,gregariousness, and communication skills that makes them good at bringing others to their way ofthinking. In this way they are able to sell others on their ideas in order to get the necessarysupport to see them through to the end. Some people are born innovators, but the skills can betaught.

Page 2 of 30


3/30

Your Innovation Hub

CHAPTER 1

History of Innovation

The theory of diffusion of innovation, first studied in 1903 by sociologist Gabriel Tarde, describeshow ideas and technology spread through a culture. It is as applicable to business innovation as itis to social concepts. It begins with knowledge: a new idea or concept is generated. Attitudes areformed about the idea, and it is adopted or rejected on the basis of those attitudes. Followingimplementation, there is a final step, which is the confirmation of the decision; in other words,what was once new becomes routine, or falls out of favor, and the cycle begins again.

In business, diffusion of innovation is often illustrated by means of an s-curve, graphing growth asa function of time. Growth begins slowly as a new product or service becomes established andthe word gets out. This is followed by a period of more rapid growth as demand increases.Finally, a plateau is reached and the line stabilizes, or may even begin to drop, signaling thefunctional end of the products lifecycle. Continuous innovation requires that new products beunder development already when the previous product is experiencing its growth spurt. That way,the new product will be established and beginning its rise as the old product begins to wane,allowing a business to grow.

From manufacturing to service industries, and for every business in between, you cannotcompete without continuous innovation. Youll be left behind by your competitors. Businesses inthe modern era face competition not only from within their own region and country, but from allaround the world. They must also be competitive worldwide themselves. The only way to surviveis through a dedication to establishing an innovation culture within the organization.

The classic example of the perils of failure to innovate is Ford. The automobile manufacturerbegan with a highly innovative product and revolutionary manufacturing techniques, leading togreat success in its early years. However, for all his business acumen, Henry Ford failed torecognize the importance of continued innovation. Between 1920 and 1927, the companysmarket share fell to 15 percent due to the influence of competitors. The need to innovate isnt anew concept in business.

Taking a proactive approach to innovation impacts your business by improving efficiency,productivity, quality, competitiveness, and market share. It benefits not only manufacturing andretail organizations, but service industries, healthcare, science, and technology. Becauseinnovation principles are scalable, the same basic approach can be applied to an organization ofany size and can grow with a business.

The intended end result is to gain market share, and therefore profits, by enhancing customersatisfaction. Innovations can be applied directly to the product or service, or to any businessprocess, including implementing of new standards relating to safety, performance, and quality.The most successful organizations incorporate innovations across all areas of the business.

Innovation is a human-focused perspective, rather than a process-focused one. Businesspractices are driven by the needs of the customer and the input of the employees at all levels.

This approach leads to an improved reputation in the community and in the industry for anorganization and to happier customers and employees. Innovative organizations depend on aninternal distributed network to generate and develop ideas, in contrast to the traditional top-downapproach, in which management determines the course of improvements. Employees areempowered and have a greater stake in outcomes, which improves both morale and the bottomline.

Innovation is particularly important in so-called mature markets, not only in times of rapideconomic or business growth. Once you have an established place in the market, yourcompetitive edge depends even more on providing a product or service that is continually

Page 3 of 30


4/30

Your Innovation Hub

improving to fulfill changing customer needs. Customers want things that seem fresh and new,and you must be ambitious, strategic, and proactive to keep up.

In addition to keeping your current customers satisfied to earn their repeat business, you want toexpand your customer base to gain market share and increase profits. Increasing yourpenetration into existing or new markets cannot be done if your product or service is stagnant.Innovative thinking is the solution.

Because innovation is a customer-focused process, consumer feedback is essential indetermining what innovations might be potential successes for you. You will also need to predictwhat customers dont realize that they want. This involves some creative thinking, but it can alsobe extrapolated from information gained in other areas of consumer research. The collaborativepower of crowdsourcing, discussed below, is an emerging trend in many industries.

The globalization of markets is both an opportunity and a challenge. It is an opportunity in thesense that you now have access to potential customers worldwide, and a challenge in the sensethat you are also competing with other businesses around the world. Todays customer pool ismore sophisticated and informed than ever before, mostly due to the influence of the internet.They can comparison shop at the touch of a button, and research products, services, andindustries. People are also shopping more with their conscience, preferring to support companies

that express a level of social consciousness, sustainability, environmental awareness, andcompassion.

Ultimately, your success will depend on the way in which you approach bringing innovation intoyour business, and how you go about keeping it as a focus. It cannot be a haphazard process.Innovation is, by definition, a new way of doing things. That is true of your organizationsapproach to becoming more innovative, too. Only by using a system can you realize the fullpower that innovation brings to your business.

A system enables you to integrate the principles of innovation into every area of your businessand to track the effectiveness of your programs. It makes it easier for your employees to developtheir ability to think and act innovatively by providing the structure and tools they need to do so. Asystem keeps everything organized and accessible to all personnel involved.

Business processes should be designed, or redesigned, to include the techniques that encourageinnovation. Innovation must become a habit. Thought processes that lead to innovative ideasshould be developed as a core skill in all employees, including management at all levels.Performance metrics which measure the effectiveness of innovative focus should be included inboth corporate and personnel evaluation criteria. Use tools, such as idea management software,that support and track ideas and implementation projects.

Innovation takes place in every area of a business. It may be realized through diversification,market penetration, product development, or market development. A balanced strategy ofinnovative deployment produces the best results, supporting business goals and innovationinitiatives. Aligning innovations with business goals produces a single strategy that supportsprojects through completion.

Studies have shown that more innovative companies grow faster and earn more profits than lessinnovative ones. They produce more employment opportunities, and job retention is higher. Byestablishing a new corporate culture that seamlessly includes innovation, you will give yourorganization a big competitive advantage. Involving all areas of the business in innovation createsa structural balance that supports optimum success. When deciding which ideas to develop, noone element for example, cost should be over- or under-emphasized.

Page 4 of 30


5/30

Your Innovation Hub

Innovation and Economics

Increasing productivity through a commitment to innovation leads to increased profits. But thebenefits go beyond mere financial gain. New knowledge, new technologies, and new applicationscreate new opportunities within an organization which ultimately benefit entire industries andcommunities.

Traditional economics focused only on the accumulation of capital as the sole basis of economicgrowth. Joseph Schumpeter was the first to discuss economics in the context of innovation, in1942. He used the term creative destruction to describe the cycle by which new is continuallyreplacing old. He believed that knowledge, entrepreneurship, and technological change notcapital were key drivers of economic growth. His ideas have only recently begun to be adoptedby a growing segment of economic thinkers, as the impact of technology on the world hasbecome impossible to ignore.

Innovation economists believe that economic policy should be created in such a way that itencourages productivity and innovation, which leads in turn to economic growth. They contendthat an over-dependence on prices and scarcity as indicators of economic fitness is misplacedand potentially misleading. Innovative companies have been found to be as profitable as

companies that do not focus on innovation, while providing more benefit to society as a whole. Inthe new economy, these thinkers claim, knowledge is at least as important as money.

Additionally, innovation economy theory adjusts for the imbalance in competition that is createdby innovative strategy. Traditional economic theory assumes that similar outputs result fromsimilar inputs, but this is not really the case. Innovators have often found ways to spend less toproduce the same product or service, or have developed proprietary methods or products that donot correlate directly with the features of their competitors products. Both of these instances willlead to higher profits for the innovator, an effect which wont be captured by traditional economicmeasures.

Innovation economics views the organization as part of the world around it, including competitors,governments, institutions, and society. Innovations improve the global economy by contributing

the commodity of knowledge. If organizations begin to think in terms of competing on the basis ofinnovation, they experience growth and increased profits, and society as a whole benefits. Whenorganizations are thinking only of profits, society may suffer, or at least, it wont be improved. Thechoice should be clear for any business.

The effects of innovation can be quantified for the purposes of making determinations about itseffectiveness. Determinants including research and development spending, patents, acquisitions,recruitment, and lists of innovations obtained through survey. Businesses consideringimplementing innovative strategies can use these methods to quantify the contribution to theirown bottom line. An organizations capital management techniques may need to be altered to bemore supportive of the innovation culture. Current methods may not adequately relate returns tothe innovations that created them, leading to an erroneous financial year-end picture about thetrue cost benefits.

Page 5 of 30


6/30

Your Innovation Hub

CHAPTER 2

Ways to Innovate

Innovation is viewed as being driven by the needs of the customer, rather than by the needs ofthe business. This shift in the way of thinking is a big part of the new corporate culture and itunderlies every decision that is made. By understanding how your customers needs and desiresare changing, you will be able to identify new opportunities that will allow you to retain yourcurrent customers and to gain new ones.

Typically, consumers want products and services that are cheaper, simpler, and more accessible.That is, of course, a generalization. The ways in which you create a cheaper, simpler, or moreaccessible product or service may depend on your particular industry, geographical location, andother factors unique to your business. Resources that keep you informed of your customerschanging needs will provide you with a large pool of ideas for possible innovations.

Finding out what your customers want is a task that should be approached from several angles.Consumer surveys are one way. Wise use of customer relationship management (CRM)technologies and procedures gives you a way to keep your finger on the pulse of customer

needs. CRM consultant firms and software applications can help you get started in creating astructure for two-way communication with your customers, which will both increase satisfactionand provide you with valuable feedback that you can use to brainstorm improvements.

Social responsibility, community involvement, and green technologies have become moreimportant to customers deciding what products to purchase and what services to use. Looking atthese values when generating ideas can be beneficial.

Investment in training employees how to think innovatively will pay off in greater participation andmore relevant idea generation. Many may not understand how to do so, and most wont be in thehabit of doing so. Even the most creative thinkers on your staff will most likely learn some newtricks, which can translate to increased enthusiasm and a chain reaction of support for the newinitiatives. Providing employees with the support, training, and tools they need is key to the

success of your program. It is also a good idea to have a coach or two on staff. Coaches,experienced in innovative procedures, can offer assistance, cheerleading, and targeted retrainingwhen it is needed. The best coaches have a working style that makes them good at sharingknowledge, being patient, adaptable to different learning styles, and using clear, preciselanguage.

To begin to generate ideas about product improvements, you need to take a critical look at thecurrent product. Evaluating your own product or service objectively can be a challenge. You havea long history together and you are naturally biased in its favor. But unless you see your productor service as a customer would, you are holding yourself back. True innovation depends on theability of your development team to recognize all areas in which an improvement could be made,even and especially the less obvious ones.

You should also familiarize yourself with your competitors products or services, comparing themwith your own. Look at them, too, as if you were the customer. Consider the reasons thatsomeone might choose one over the other. Think about how you might bring your product closerto a competitors, or how you could further differentiate your own, always observing from thecustomers perspective.

Ways to Innovate

There are three types of market-based strategies. Leaders are the first to use an innovation,either a new or improved product or service. This strategy may be used to gain market share, todiscourage or leap-frog the competition, and/or to establish market dominance.

Page 6 of 30


7/30

Your Innovation Hub

The quick-follow strategy brings a product to market shortly after that of a competitor. It may bethe same type of product, or a similar product that incorporates an improvement or enhancementof some kind. This daring strategy can pay off big if it succeeds This strategy is most often usedby a business that already has a strong reputation and is confident in its ability to crush thecompetition and gain market share.

A slow- or no-follow strategy is utilized in situations where it isnt practical to enter the market dueto a slow economy or competitive pressures. The reality is that, even in a down economy,innovators are the organizations are those who will be able to grow. The very culture of innovativethinking, with built in flexibility in business practices, supports fast and fluid adjustments that keepthe business moving forward.

Risk, Failure, and Innovation

The corporate culture that supports innovation is one in which risk and failure are not feared orpunished. Innovation, by definition, involves risk; stretching the organizations vision to the nextlevel in order to grow. Having a system through which innovation is managed will ensure that therisk taken is limited to a reasonable level and controlled through open communication and reviewprocedures.

Employees at any level may fear failure that leads them to resist incorporating innovativepractices. Top management may be concerned about money or reputation, while lower levelemployees may be worried that theyll be fired or punished if they are involved in a failing project.It can be a challenge at first to break through these ingrained beliefs, but it is important to do so inorder for innovative strategies to be completely effective.

Some of the most successful companies have adopted policies that recognize, and even reward,failure. Calling them smart failures, these companies understand the potential for failure to driveimprovement, by educating and motivating. Acknowledging that failures happen removes thestigma which can keep the lessons of failure from being fully realized, and allows people toharness the motivating power of wanting to try again to get it right.

Thomas Edison, when an assistant expressed frustration at repeated experiments that did nothave the desired result, said, If I have found 10,000 ways that wont work, I havent failed. I amnot discouraged, because every wrong attempt discarded is often a step forward.

He saw that knowing what doesnt work is just as valuable as knowing what does. To establish acorporate culture in which innovation is the primary shared goal, an organization must not punishor conceal failure. Rather, it should be embraced for the knowledge it can provide. Of course,failure should still be the exception rather than the rule; your implementation system willincorporate risk management methods for control.

Thomas Edison on Innovation

Thomas Edison was not just an inventor; he was also an innovator, creating the first research labin the world. His thinking on the topic is greatly admired and has become the foundation ofinnovation programs around the world. There were certain characteristics of his which werefundamental to his mastery of the innovation process and hold great wisdom for those who seekto emulate it.

A solution-centered mindset is one of these characteristics. Edison himself worked tirelessly inorder to find solutions, and expected the same of his employees. His drive to succeed allowedhim to break through obstacles, no matter how unexpected. By viewing all results, even the

Page 7 of 30


8/30

Your Innovation Hub

disappointing ones, as valuable data, Edison remained focused on his goal. He saw limitations asopportunities for change.

Another of Edisons competencies has been termed kaleidoscopic thinking. Just as akaleidoscope rearranges bits of glass into an endless number of different patterns, the brain canbe trained to see innumerable options. This principle is sometimes called whole brain thinking,the use of both the creative right hemisphere and the logical left hemisphere to find unique,innovative solutions. Kaleidoscopic thinking can be used to approach stubborn problems in a newway, and to recognize patterns that lead to breakthroughs. This way of thinking enables people todiscover connections between different areas, ideas, and goals, and to become comfortablethinking about seemingly contradictory matters to find how they can work together.

Edison said, Theres a way to do it better find it, and I never pick up an item without thinkingof how I might improve it. He was always thinking innovatively, looking for hidden value. It was ahabit with him, and it led him to greatness.

Edison was able to calmly steer his way through the sometimes rocky innovation process. This isthe ability to balance shifting priorities while remaining dedicated to the goal. Being able to seeboth the big picture and the smaller picture, as needed, is an important element of thiscompetency. Organizations can use this skill to keep innovation projects on an even keel,

allowing team members to retain their creative energy.

Collaboration was used by Edison as a way to maximize the innovative approach in his company.His employees made up a highly diverse workplace in terms of talents, skills, and backgrounds.Small, focused work teams were created with this diversity in mind, to match tasks to talents andto stimulate creative thinking. Rewarding collaboration helps personnel to grow more comfortablesharing their own ideas and expertise, strengthening the entire organization.

Edison was one of the first to use branding, creating name recognition through a platform ofproducts. This principle is still a critical element of consumer engagement in todays businessworld. By recognizing trends and openings in the market, a business can identify areas in whichto expand its identity. A flexible business model allows for an agile reaction to changes in themarket or competitive pressures. Branding can be enhanced by finding ways to improve

promotion and packaging.

Edison understood that smart, innovative business practices were at least as important as havingwell-designed products. His approach led him to build a company that was worth more than ahundred billion dollars in a period of only 40 years.

Page 8 of 30


9/30

Your Innovation Hub

CHAPTER 3

The Innovation Hub

You have seen why your innovation program must be managed through a structured system. Theheart of the system is the innovation hub, a construct through which all ideas are collected,evaluated, and organized. The innovation hub enables you to manage every aspect of yourinnovation program for successful implementation. All information flows into and out of the hub,

just as the hub of a wheel supports the spokes, centralizing everything for fast access, analysis,and control. Collaboration is enhanced because all stakeholders stay informed and connectedthrough the hub. The hub even helps to ensure that you are developing the right projects at theright time.

Once collated, ideas should be evaluated for value, suitability, acceptability, feasibility, andendurance. These criteria are discussed in more detail below. Those which are found lacking forsome reason should be rejected respectfully, without any negative remarks being attached to theidea itself. Idea generators need to feel that all their ideas are valuable, even the ones that dontturn out to be good candidates for implementation. Using a formal review and filtering process,

subjecting all ideas to the same criteria, is the best way to keep rejection a neutral effect.

In general, more ideas are better. The more there are to choose from, the more likely you will beto find truly innovative ones. However, it is possible to face innovation overload, when there areso many ideas and inputs that the business stalls, as it is unsure how to proceed. Rather thanputting a limit on the number of ideas that will be allowed, which would have the negative effect ofstifling employee participation and creativity, use of an organized screening system lets ideas berejected or elevated to the next level quickly. The smooth processing of inputs leads to improvedefficiency. Idea management software is a great way to implement a smooth, consistent, and fairfiltering process.

The Innovation Pipeline

The innovation pipeline is the series of steps and processes through which innovation activitiesflow, from idea to implementation. Innovation is a circular process, feeding back on itself. Thepipeline framework is better for innovative companies than the traditional staging/gatingframework for projects because it is more adaptable to this two-way flow of information. Thepipeline framework can be applied to a wider number of improvements across the business, not

just new product development. The decision points in the pipeline are flexible, and the workdepends on teamwork, so that employees feel more invested in their contribution. The pipelineincludes innovation throughout the process so it fosters the sense of culture that leads tosuccess.

The initiating stage of the pipeline is the generation of ideas. The ideas that drive innovation can,and should, come from any area of the organization as well as from external sources. Theseinputs are gathered via the innovation hub to be collated for review.

Employees at all levels should be empowered to advance their ideas. They often have very goodideas about what could improve a process, but dont bother to mention anything. Perhaps theylack the knowledge to figure out how to get it done, and feel its not worth speaking up without acomplete solution. The innovative operation is dependent on employee participation. Employeeswho feel that their ideas are valued are more likely to continue thinking in ways that lead toinnovation, supporting the business. Those who work for companies with an innovative cultureare happier in their jobs, because they feel invested in the companys success, and are less likelyto leave.

Page 9 of 30


10/30

Your Innovation Hub

Customer feedback, collected through surveys, workshops, and other CRM methods, areinvaluable in generating ideas, because it is customer needs that drives the entire process ofinnovation. Feedback from potential customers should be solicited, too, and competitor products,services, and reputation should be included as a source of idea brainstorming. Once gathered,ideas are filtered through the evaluation criteria, discussed in more detail below.

The next stage is sometimes referred to as opportunity management. The ideas which have beenelevated to this stage, by passing the selection criteria, are further evaluated to determine whichones will become the focus of implementation projects. Ideas may be chosen which align mostclosely with the years strategic focus, or for any other reason that supports current businessgoals. Those that have similar business objectives can be compared to see which have thehighest potential success in terms of return. The ideas that are not selected for development atthis time should not be discarded. They may later become viable due to changes incircumstances or strategy, or at the very least, as a resource for brainstorming new ideas.

Design, development, and execution take place during the next stage in the pipeline. Innovationdoesnt stop at this stage, but continues so that the whole process is agile and can respond tochanges, obstacles, or pressures without losing momentum. The following launch phase involvesdeployment of the innovation, whether it is a process improvement or a new product. It is oftendone on a small scale at first to test the success and to identify any final issues that need

correction or modification before large scale release.

The strategic context for the pipeline includes the business goals, market and competition factors,and regulatory and economic factors. These conditions determine which ideas will be selected fordevelopment, and drive how decisions are made throughout the project. They may lead to shiftsin the project as they change over time.

Successful pipelines share certain elements. They keep focus on strategic context and are bothpragmatic and flexible. Filtering ideas early in the process prevents less-viable ideas fromcluttering the pipeline. All activities are transparent and communicated openly and promptly to allstakeholders. Cross-functional collaboration and learning benefits the organization as a whole.Strong decision making is important in keeping projects healthy and on track. The effectivenessof a pipeline how well commitments are met is another measure of success.

The results of innovation can be measured. Doing so enables you to recognize what strategieshave worked best and which have been less effective. A smart innovation system includesquantitative and qualitative ways in which a projects success can be measured. Benchmarksshould be set for key steps and for every segment of the organization. Look at finances, processefficiency, customer satisfaction, and employee contribution and motivation. Evaluating inputsfrom all these areas will produce a vivid picture of how effectively innovation was used in a givenproject.

Measurements should be taken periodically for the duration of the project, not just at the end. Infact, innovation is a highly recursive process. Each step feeds information forward to the nextstep, and also back to the previous process, a structure which is facilitated by the pipelineframework. By evaluating project status and business conditions frequently, you will be ready to

make any necessary changes to ensure that the innovation being implemented remains feasible.

Innovation must become integrated into every process at a fundamental level. It cannot be anafterthought. Once the commitment has been made to refocus an organization on innovation, theentire business model needs to be restructured in order to support the new direction. The pipelineframework is one component of a wise restructuring.

Page 10 of 30


11/30

Your Innovation Hub

Evaluation Criteria for Ideas

There are five key criteria against which ideas and inputs are evaluated to determine whetherthey are good candidates for implementation. By looking at each of these criteria, the team caneliminate the ideas which are not, without spending a lot of time on them.

The first area to be looked at is value, which assesses the benefits to the organization of the idea.The significance of the term value is discussed in more detail below. An estimate of the specificbenefits that are projected to result from a given idea should be prepared in order to quantifythem for review. Ideas which do not show much value can be eliminated.

Next, consider the suitability of the idea. Evaluate how well it fits with current strategy, businessgoals, and the economic climate. Ideas that are inconsistent, not likely to produce a high return,or would take focus away from core business, can be eliminated, or, perhaps, considered for analternate track, such as licensing for outsourcing or creating a new product line.

The acceptability of the idea to all stakeholders is another criterion to be considered.Stakeholders include current customers, potential customers, employees at every level, andshareholders, if any. They may also be suppliers, partners, licensees, or others external entities.For implementation to truly succeed, their support is going to be needed. Ideas need to be

advocated for and stakeholders buy-in obtained, before beginning the process of implementation.This is one significant way in which becoming an innovative organization is a change in corporateculture. Dont just discard ideas which are met with resistance at first. If the idea seems like it haspotential, take some effort to sell the idea to those parties who are resistant, using whatever dataor facts you need to support your position.

Ensuring that the resources and time available to complete the implementation are adequatereflects the feasibility of the idea. The necessary funding and skills should be evaluated, and atimeline created that includes any fund raising or training that might be needed. Once the timelineis made, the team can decide if the return on investment will be worthwhile, or if constraints oftime are insurmountable.

The best innovations are those which are enduring, providing a good long-term value and return

on investment. Evaluating ideas in light of this concept will help to identify the ones which makemost sense and those which appear to have only short-term appeal or a low return on investmenteven over time. New products and services often take some time to establish their full marketshare, so following fads is usually not a good choice.

It is important that the filtering process for ideas be formal and proceduralized, with the fullsupport and participation of top management. A casual process will lead to an uneven applicationof criteria and, as a result, good ideas may be lost. Furthermore, a casual process doesntdemonstrate the necessary commitment to innovation and can lead to diminished morale. This isone more reason why having a system is so important.

Focus on the ideas that offer the most value, and discard those that are not as strong. Employeesshould be rewarded for sharing all ideas, not just the ones that are eventually developed. When

they feel that their input is valued, they continue to think more creatively about ways to innovate.To this end, group recognition is most effective, so that employees feel that they are part of ateam.

Communication is key to a successful innovation culture. The entire organization should be keptinformed about what ideas have been selected for implementation, and what impact innovationshave had on the business. The innovation hub and centralized knowledge management systemmakes this easy for you by centralizing all the relevant material for easy access.

Page 11 of 30


12/30

Your Innovation Hub

Innovation is a Cross-Functional Activity

The implementation process involves a cross-functional team which develops the plan, timeline,and goals. They are responsible for follow-through and keeping all stakeholders informed duringthe process. This team may be a permanent innovation team, or teams may be drawn frompersonnel with expertise in different areas depending on the project. There are pros and cons toboth approaches. A permanent team may not be as effective over time, because there isnt thestimulating spark of new members with different ways of thinking. Teams comprised of personnelwho arent used to working together can suffer from dysfunction and reduced efficiency.

In either case, the team should include a balance of different working personalities from differentareas of the organization. Not only does this create a stronger team, but helps to foster trustacross the organization as people from different areas get used to working together. The numberof team members will depend on the project. Typically, eight or ten people is the right size for ateam. Much larger and the team becomes unwieldy; too few and the dynamic effect of diversitymay be lost. Five basic types of personality should be included on every team for the bestbalance and diversity.

The idea generator is responsible for creative thinking, problem solving, and recognizingopportunities. He or she will typically be a subject matter expert (SME) in one or more areas of

the business, with a talent for finding new markets or niches. This person has a talent for goingbeyond the obvious. This type of working personality often prefers to work alone or in asubordinate role.

The advocate is responsible for promoting ideas to others in order to gain support. He or she istypically someone who is skilled at developing ideas into larger concepts, sees the big picture ofthe organization, and eagerly approaches teamwork. This type of personality enjoyssalesmanship and influencing others to a come around to a certain position.

The project leader personality type is skilled at leadership and organization. A strong leadercommunicates effectively and often and works to keep the project on track. This person isknowledgeable about business processes and politics and understands how to manageresources efficiently. Good leaders know when to delegate and when to participate.

The gatekeeper manages the flow of information to and from the team. This person enjoysmarket research and gathering relevant data from multiple resources, and is skilled at distillingdata. The gatekeeper shares relevant information with the team as a means of critically assessingthe aptness of ideas that are under development. He or she is often more technical than creative,with a capacity for looking at things objectively.

The coach supports the team and the project in whatever way he or she is needed. Thispersonality naturally offers encouragement and motivation, keeping morale up, even in the face ofskepticism or resistance from other areas of the business. The coach may step in to moderatedisagreements or misunderstandings within the team, or between the team and outside parties.

There are some shared characteristics which distinguish the best team members. Primary among

them is the sense of identification with the team, rather than as an individual or as arepresentative of one functional area or another. Team cohesion leads to optimal integration ofdiverse perspectives, which makes for better decisions. Other characteristics include a high levelof participation in the process and a willingness to take direction and to admit mistakes.

The most effective teams embody commitment and loyalty. They think competitively, beingconfident in sharing and discussing ideas, and are open minded and progressive in thinking. Theyhave established specific measurable goals and communicate effectively.

Page 12 of 30


13/30

Your Innovation Hub

Because innovation is a whole-business effort, different employees may comprise differentimplementation teams at different times or for different projects. Participating in these teamsgenerates a sense of empowerment in employees, leading to a higher comfort level in promotingnew ideas. This creates a positive cycle and supports the integration of innovation into thecorporate culture.

As with every aspect of innovation, the team should have a clear direction, with target dates andmetrics. During the entire implementation process, the project should be continually reviewed inlight of any new information, changes in the marketplace, changes in the industry, and changes incustomer needs. The innovators way of thinking is to be flexible and willing to make necessaryalterations and judgments in midstream. Review makes it possible to respond early and quickly toreduce the impact on the timeline and outcomes.

Page 13 of 30


14/30

Your Innovation Hub

CHAPTER 4

More about Value

Value is the primary element of business that drives the need for innovation. Value is createdwhen a company invests capital for the purposes of generating cash flow in the future, at a returnon investment which results in a profit for the company. Innovation is the principle of focusing onvalue creation, rather than on profit making, as the goal of the business. Creating products thathave a high value leads to greater market share and therefore to higher profits, the same endresult. But focusing on customers is humanizing, leading to a stronger public image, which tendsto also add value.

From your customers perspective, value is the reason to choose you over a competitor. It may betangible (the product itself) or intangible (customer service, for example). They include elementsof pricing and reputation, as well as the more obvious aspects of usability, quality, and fulfilling aneed. To compete effectively, your innovation team needs to be better at recognizing value, in allits forms, than your competitors teams.

Understanding of customer behavior leads to stronger product development and strategies for thefuture, because you will come into better and better alignment with your customers needs. Value

is subjective, because it is dependent on context: how much the customer is willing, or able, tospend and other conditions of the marketplace. Knowing your customer will help you becomebetter at approximating and predicting the value of your product or service. This skill can help youto be very responsive to changing markets as you learn recognize the signs that predict certaincustomer behaviors.

The methods used to quantify value need to be appropriate so that they adequately capture truevalue, and do not conflate other qualities that do not add value. For example, using financialreturn on investment may not fully capture the true impact of an innovation. New products maynot be runaway sellers right away, but have the potential to capture a larger market share givenmore time. By using a longer measurement window and a reduced dependence on financialmeasures alone, a more realistic assessment can be made.

Another disadvantage of using financial performance as an indicator of value is that changes inthe influence of risk are not taken into account. When risk is reduced, value is increased, but ifprojected cash flow has not changed, the impact on value wont be captured. Equity capital isanother area that is ignored in traditional measures of financial performance, even though it istypically larger than debt capital.

Better measures of value include market share, free cash flow and economic profit, customersatisfaction, and development productivity. The more diverse metrics that are used, the moreaccurately they will reflect the true value that an innovation will create. A combination of short-term and long-term indicators is best. Which measures to use depends, to some extent, on thebusiness strategy of the organization and its critical success factors.

In the innovation program, new ideas are evaluated for how much value they will create. To make

the best decisions about the value represented by a given idea, an understanding of the industryas a whole, as well as individual products and services, is important.

Creating a new or improved product is the first thing that most people think of that adds value, butvalue can be added by implementing improvements at any level of the business. Reducinginventory management costs is one. Streamlining the process of materials ordering, if applicable,is another.

Page 14 of 30


15/30

Your Innovation Hub

Customer service is a large contributor to customer satisfaction, which is an element of value.Finding ways to provide better, faster, or more accessible customer service can be a simple,inexpensive way to add value.

The Value Chain

A relatively new way of thinking about business in the innovative model is to consider the valuechain, along with the supply chain. They are complementary and should be managed together forthe most effective and efficient strategy. Chain theory involves inputs from every businessfunction, and can be applied to any business, not just those that are in the manufacturingindustry.

A supply chain flows from the organization to the consumer, and originates with productrequirements. The value chain, on the other hand, flows from the consumer, and begins withcustomer requirements. This is just another way of looking at the same central concept ofinnovative thought: focusing on customer needs as the foundation of the business.

Supply chain management refers to the process which describes and tracks every step in theprocess of getting a product into the hands of the consumer. A similar value chain managementprocess can be implemented to capture the steps involved in increasing competitive strategy,

developing collaborative models for enterprise, and globalization. The traditional businesspractices, such as Six Sigma, that have been used to uncover potential improvements in supplychain management can be applied to value chain management as a means of identifyinginnovative concepts.

By formalizing the value chain, an organization can see where innovations can be implemented toincrease value or trim non-value added steps. The chain may include coordination activities,information technology, organizational processes, leadership commitment, flexible workflow,employee involvement, and a supportive corporate culture. The value chain concept can beapplied to broader sequences including those steps which take place outside of the organization,such as supplier or distribution networks, export costs, and the like.

Management of the value chain and the supply chain should be synchronized. This creates a

fuller understanding of work flow and can lead to some very powerful opportunities to makeprocesses more lean. A numbers of metrics are used to evaluate chains to track performance andidentify trends. The synchronization can be done and managed using the innovation hub. Thereare tools and software applications that make it easy.

Idea Generation

A new corporate culture of thinking innovatively means that employees are constantly evaluatingprocesses, procedures, practices, products, and equipment for potential improvements. Theimpetus for innovation may come from anywhere within the organization. It might be unexpectedresults, either an unexpected success or an unexpected failure. It might be the result of anaccidental occurrence which suggests new possibilities, or an incongruity between perceptionand reality for example, high demand but stagnant sales. Sometimes, when one new process or

product is implemented, it elucidates the need for improvements in other, supporting processes.Changes in the market and industry may also drive the need to innovate.

Those impetuses which come from external sources include demographic changes, newknowledge or technology, and a shift in perception among the target customer group. Bothinternal and external impetuses are valuable in a well-rounded quest for the ideas that lead toinnovative successes. Your innovation hub should be designed in such a way that it will captureas many of them as possible.

Page 15 of 30


16/30

Your Innovation Hub

Among the inputs that can be used to generate ideas is the process of failure mode and effectsanalysis (FMEA). Most organizations already use FMEA as a component of their design process,and it is no less valuable in innovative processes. In fact it becomes even more powerful becausethe results can be used as a springboard for brainstorming innovative ideas.

Innovations are not, and should not, always be triggered by a crisis. Such a situation may lead toa creative solution, but it is not the ideal working condition. Furthermore, an effective innovativeculture is one in which thinking innovatively has been incorporated into the daily routine.Innovative culture will serve to reduce the instances of crisis situations arising, because potentialissues will be identified sooner, when they are smaller and more manageable.

There are four basic areas in which new ideas should be encouraged to be found: businessinnovation, product and service innovation, marketing innovation, and process innovation. Allfunctional areas of the business should be targeted equally for improvement. Streamlining, theremoval of any non-value added processes, steps or activities, can take place in any of theseareas and will have an impact on productivity, profitability, and efficiency.

The use of technological tools to support innovation and implementation is wise. They will saveyou time and effort, reduce the organizations learning curve relative to instilling the new culture,and make centralizing of activities and communication possible for optimum efficiency. Web-

based technologies allow all stakeholders to be able to connect at any time from anywhere.

Its everyones job to innovate, but as a business process, innovation needs to be managed. Thesystem that you implement will make it easy by providing structure and tools for management.You will develop turnkey procedures for innovation in business, product/service, marketing, andprocess. Turnkey means ready for use. In this context, it means procedural steps that are inplace and ready to spring into action to turn ideas into innovations. Striving to innovate in all fourareas results in balance so that improvements in one area arent negated or suppressed bywasteful processes in another area.

Page 16 of 30


17/30

Your Innovation Hub

CHAPTER 5

Business Innovation

Innovation is at its heart a creative process, but it can be systematized. Once an idea has beengenerated, the rest is planning and problem solving. The entire process can be mapped out andis repeatable, so the steps can be formalized. Innovations in business processes add value byreducing costs, increasing production, reducing waste, reducing inventory, generating newavenues of revenue, and more. Looking at current business practices with a critical eye will helpto reveal areas in which improvements may be possible. All such ideas should be processedthrough the innovation hub.

To be successful, innovation requires decisions to be made quickly and based on accurateinformation. Timing is essential to avoid bringing out new products or services too late to be trulyinnovative. New business processes and supply chain models can be implemented to streamlineplanning and decision making processes. A flexible workflow ensures that adjustments cansmoothly be made along the way to keep projects on track and to adapt to any changes in scope.

The use of web-based idea management software allows you to harness the power of technologyso that you can spend more time innovating and less time managing. Its easier to multi-track

processes when they are managed centrally and can be visualized better. Improvedcommunication with stakeholders is another benefit of using software applications. Developmentis stronger because the input and feedback of all stakeholders is gathered easily, creating arobust idea that stands out from other, more weakly supported ideas.

Software can also be used for supply chain and value chain modeling and tracking. Data iscompiled so that it can be easily accessed and analyzed, meaning that decisions can be madefaster and based on the most complete and current information. Smart management of the supplychain and the value chain supports maximum efficiency and identification of innovationopportunities.

Product or Service Innovation

New products and products that have been modified for improvements are a major focus ofinnovators. Product loyalty isnt what it once was; consumers are constantly alert for somethingbetter, cheaper, more convenient, or just newer. Innovations in every area of the organization areimportant for growth, but your product or service is the face of your business so it naturally gets alot of attention from idea generators. You must continue to appeal to your existing customerswhile seeking to gain new ones, which means there may be a fair amount of pressure to innovateproducts and services first. This is fine, but dont neglect other areas as a result.

The use of social media has become a highly effective way for businesses in every industry tointeract with their customers. Using it wisely can be a significant element in your success. Apartfrom the well-known social media sites, there are web applications which have been designedspecifically to create a lab space for you to connect with your customers.

The term crowdsourcing has been coined to mean the use of information contributed by thegeneral public to a project, usually through the internet. There are dozens of different ways toapproach crowdsourcing. Collaborative brainstorming, focus groups, and design contests are justa few.

Customers see social media as an experience in which they are participating. The process ofeasy sharing of content has revolutionized how they connect with their friends and families, andalso with the companies that they like. You can exploit this by using social media to give yourcustomers a more fun way to associate with you. You can gather feedback, share knowledge

Page 17 of 30


18/30

Your Innovation Hub

about different ways to use the product that they may not have known, encourage your customersto share information about your products with their friends, and more.

Knowing what your customers and potential customers want often, before they know itthemselves drives new product development and product improvement. You cant know whatthose things might be unless you are tuned in to their habits, tastes, and lifestyle choices. Socialmedia and crowdsourcing give you the window you need to see into your customers life, whilemaking a human connection that makes customers feel more valued by you.

Sometimes, a great innovative idea comes along for a new product, but it just isnt practical, forone reason or another, for you to produce it within your organization. Maybe it doesnt fit in wellwith your current product line, or perhaps it would require installation of a new production line,making it not cost or space effective. Licensing is a good solution in this circumstance, enablingyou to still reap some profit from the idea with a minimal investment on your part. You will also bebuilding a relationship with the licensee which may be of further benefit to your business in thefuture.

Marketing Innovation

Continued innovation in marketing, especially in todays technological landscape, is another

essential to keep your business strong. As you are looking for ways to open a new market orcreate a new customer base, innovations in marketing are one approach. New advertisingcampaigns, redesigned packaging, and special promotions are just a few of the ways in whichinnovation can be applied to marketing.

A strong online presence is essential for any company that wants to be competitive today. Youronline marketing strategy must be more than just having a website, but an attractive, up-to-date,interactive website is a good starting point. Your site should contain clear information that is easyto find. Customer self-service, if applicable to your business, should be incorporated, andanswers to the most common questions about your product, service, or industry should beprovided.

Consumers are highly dependent on the internet for gathering product information, comparison

shopping, and making decisions. The use of social media and crowdsourcing, as discussedabove, offers opportunities for marketing innovations as well as product and service innovations.Consumers have begun to seek a relationship with the products they use. Building a story and acommunity around your products makes customers feel a part of something bigger, boostingloyalty and sharing. The low cost of the social media approach makes it highly desirable becausethe return on investment and added value will be high.

Expand your online presence as widely as you can; however, dont take on more than yourorganization can reasonably manage. If you do not have the resources to keep websiteinformation current, to ensure that there are no enduring technical difficulties, and to keep avisible social media presence, then these are not areas in which to expend energy.

Branding is another area in which you can deploy marketing innovations. Branding is the external

appearance of your business, so you are already connecting with the customer through it.Obtaining customer and potential customer feedback can help you find ways to do it better.Having an innovative brand strategy enhances your public image, leading to a widening customerbase.

Your branding strategy should be flexible enough to allow for smart innovations, while remainingcohesive enough that it is unified and recognizable to your customers. Trying to do too much canresult in clumsy, sprawling branding. Changing branding too frequently is another strategy toavoid, as it may confuse or annoy customers. Innovations are best when they are supportive of

Page 18 of 30


19/30

Your Innovation Hub

existing branding. Branding innovations are best used to support corporate growth strategy, notthe other way around.

Dont be afraid to stretch the parameters of the brand, or look at it from a different angle. Testmarketing can help you to determine the impact of changes on overall branding strategy. Whenconsidering branding innovations, consider customers behavior more than their words.Customers are often not good at articulating precisely what it is that they want, and often speakfrom a place of emotion rather than logic, which may not reflect their practical needs. They mayalso change their minds quickly about what they want. Depending on behavior gives you a betterpredictor of long-term needs.

There are plenty of ways in which marketing innovations can come about. Employees who arenot involved in marketing often have very creative ideas that are worth pursuing. Marketing ideasare often the easiest ones to get buy-in from management, because they are likely to be low incost or easily absorbed by existing marketing budgets. The most potentially effective ideas arethose that are customer-focused and clearly support the current business strategy.

Process Innovation

Process innovation is any improvement or change to an internal process that has the effect of

boosting efficiency and improving customer satisfaction. Doing things the way theyve alwaysbeen done is a sure way to be left behind. Innovative processes are those that arise from anunderstanding of how they impact the delivery of customer needs and the resulting profit margin.Anything that makes a process faster, less wasteful, or more robust is a good improvement toconsider.

The redesign of the value chain is one way in which to implement process innovation. Significantsavings can often be found through evaluating the value chain steps, rather than the supplychain. Developing new capabilities for customer self-service is an example of this type ofinnovation. Making processes flexible improves workflow and turnaround time. Otherimprovements include those that improve documents, including procedures, records, andrequirements, logistics, and discovering applications for using emerging technologies.

The greening of processes reducing environmental impact by reducing waste, reducingpackaging, or using raw materials that are less destructive to the environment is a popular wayto boost public opinion and reputation, as consumers are increasingly choosing to supportcompanies that care for the Earth. There may be added benefits in reduced regulatory or disposalrequirements or lower costs due to locally sourcing materials. Processes should be examined tosee if there are any opportunities for greening.

The best ideas for improvement come from the employees who are actually involved in workprocesses. In organizations that dont have an innovative culture, employees with good ideashave a tendency to keep them to themselves, or mention them only offhand to co-workers. Theseideas never find their way to management, even in organizations where they would be inclined toact. Innovative organizations actively solicit these ideas and encourage personnel to regularlycontribute them.

The principle of kaizen, which was first popularized in Japan, has become a feature of doingbusiness around the world. The Japanese word can be translated as change for the better. Thefocus is on continuous process improvement, with the involvement of all employees. Its fiveelements are teamwork, personal discipline, morale improvement, quality circles, andimprovement suggestions.

Kaizen can be applied to any business in any industry, though it began in manufacturing. Eachemployee is empowered to identify areas in which improvements can be made. In someorganizations, small groups are formed which focus on their own processes, sometimes led by a

Page 19 of 30


20/30

Your Innovation Hub

kaizen supervisor. Others use large groups, or a suggestion system. The format can be whateveris most practical for the particular organization.

Any process can be approached from the perspective of kaizen. It is also used in troubleshootingand root cause analysis, with the problem being the input which is then analyzed using themethods of kaizen. This is just one way of approaching problem solving; some more arediscussed below, and any of them can be employed to evaluate ideas for innovative potential.

The success of kaizen as a business principle is that the many small improvements which aregenerated cumulatively lead to large benefits over time, for the organization and ultimately for thecustomer. Because the focus is on these small changes, rather than sweeping long-term projects,the feedback loop is faster and adjustments can be made more easily.

Kaizen begins by measuring a standardized operation to determine current parameters, such ascycle time and materials usage. This data is compared to the requirements which are in place.Then, the process is evaluated to see where improvements could be made to better meetrequirements and to improve productivity, efficiency, and safety. Once the new process hasbecome standardized, the kaizen cycle is repeated for continuing improvement.

Innovative thinkers can use the cycle as a way of generating and evaluating ideas. To use kaizen

for innovation, current procedures are evaluated against ideas that have been developed bylooking at changing customer needs, new markets, or new products or services.

Waste of materials, time, and money can be greatly reduced, and processes that run betterproduce higher quality end results. Production capacity is increased, and there is often a smarteruse of existing space. Kaizen doesnt require a large capital investment, and can be used tomanage any system.

Studies have shown that kaizen can lead to as many as 30 ideas per employee per year, and that90 percent of them are typically implemented. Employees feel empowered and are happier intheir work, so retention is high, reducing costs related to training of new employees.

Related to kaizen is the concept of lean production. This focuses on eliminating any practice,

step, stage, or element of an organization which does not directly contribute to value for thecustomer. It benefits the business by streamlining and optimizing flow in every process. Someorganizations take the approach of using a series of tools to identify areas of waste, while othersfocus on improving the smooth operation of processes, which has the result of reducing waste.The second method is often preferred because it naturally takes a broader view of systems,leading to more improvements.

There are three main types of waste that can be addressed through the application of kaizen andlean practices. The first is unevenness of work flow. This may be due to irregular productionschedules including scheduled down time, poor planning, unplanned work stoppages, erraticemployee performance, or inconsistent work instructions.

The second type of waste is the continued use of tasks and procedures that do not add value; for

example, a disorganized procedure that leads to unnecessary movement of people or materialsback and forth, or unnecessarily complex approval processes that take too long.

The third type of waste is found in overly burdensome workloads. This includes asking too muchof any equipment or procedure, as well as of human resources. Work cannot get done efficientlyand safety and quality are negatively impacted, sometime severely. Great improvement can berealized by distributing work more evenly.

All of these sources of potential waste should be regularly addressed looking for opportunities toinnovate. Because every process affects the other, they can be seen as together comprising a

Page 20 of 30


21/30

Your Innovation Hub

feedback loop. Changing one will lead to changes in the others, which may or may not representimprovements. Continued checking for new issues will control that.

Page 21 of 30


22/30

Your Innovation Hub

CHAPTER 6

Problem Solving Methodologies

Innovation is the art of solving problems. They are not always problems in the negative sense,but include things like the problem of how to create a better product. There are numerousproblem solving methodologies that can be incorporated into your innovation framework.

The principle of TRIZ is frequently used as a framework for innovation. The acronym is from theRussian for theory of inventive problem solving. It uses a series of laws that have been developedfrom patterns in patent literature. These laws include the law of increasing degree of ideality, thelaw of non-uniform evolution of a subsystem, the law of increasing dynamism, the law of transitionfrom macro to micro, the law of completeness, the law of shortening an energy flow path, the lawof increasing controllability, and the law of harmonization. In general, the laws describepredictable conditions that will arise during product development or improvement, the trade-offsthat will need to be addressed.

Genrich Altshuller, the father of TRIZ, recognized that technical contradictions, in which animprovement in one area has a detrimental effect in another, could be dealt with by using aninnovative solution. He and his associates developed a set of tools that can be used to expand

thinking in order to generate ideas that are not constrained by psychological inertia. Although thetools were developed based on patent data, they can be applied to problem solving in anyindustry, because the general principles are not restricted to manufacturing.

TRIZ has become a popular approach to innovation and problem solving in numerous industries,and has spawned several off-shoot methodologies. It is just one possible way to go aboutcreating a framework for innovation.

Six Sigma is another popular methodology. It defines the steps to follow in order to achieve aproject goal by reducing variation in a process. This methodology specifically quantifies financialreturn, which not all structured methodologies do. It is often combined with the principle of leanprocesses, and then called Lean Six Sigma.

There are two main paths that Six Sigma projects can take. Each has an acronym that describesthe steps. The first is DMAIC and is used for improvement projects. The acronym stands forDefine, Measure, Analyze, Improve, and Control.

The second path, DMADV, is used for new product or process design. It stands for Define,Measure, Analyze, Design, and Verify. Both paths can be useful as an innovation framework.

Training programs are available in which personnel can earn a Green Belt or a Black Belt in SixSigma. Many companies have one or two employees who are Black Belt certified, who thenmanage the process as it is used by other employees, who may or may not be Green Beltcertified. Certification is not required to implement the principles of Six Sigma, but the full programis quite complex and it is more powerful if there is an expert on staff.

There are other methodologies in addition to the ones mentioned, and numerous qualitymanagement tools that can be used independently or as components of a structured method.You may use one method or a combination of them, or use different ones for different situations.

Your systematic approach to innovation management is enhanced by using any of these definedstrategic approaches to problem solving. Innovative thinking is open and flexible, but it is theframework that integrates it into the business structure. Employees can work faster and smarterwhen they are provided the right tools.

Page 22 of 30


23/30

Your Innovation Hub

Building Innovation into Business Processes

There are three levels at which innovation should be built into business processes, those relatedto annual, quarterly, and daily activities. This keeps the focus on the new ways of innovativethinking. By combining proactive and reactive approaches, you will create an environment inwhich there are abundant opportunities for ideas to be generated.

The Annual Business Planning process will outline the goals and direction for the coming year. Areview of the previous years plan and outcomes sets the background. The organizationsmission, goals, and benchmarks are evaluated and assessed for areas in which they could bechanged to better support innovation. It is not a bad idea to repeat this review of mission andgoals every year, to foster a continuing commitment to innovation.

The annual plan can be thought of as the catalyst for the innovative culture that you aredeveloping. Incorporating innovation into the plan is the only way to secure its continuedimportance even under the inevitable financial and productivity pressures that arise throughoutthe year. Including innovation funding in the annual budget ensures that projects arent killedbecause of a lack of resources. Funding should be earmarked for innovation, not for specificprojects, so that its available when and where its needed. Access to the fund should not beentangled in lengthy approval processes.

Flexibility being a key element of innovation, it may seem difficult at first to know how toincorporate it into a year-long plan, which is a more rigid construct. It might sound paradoxical,but including innovative activities and funding into the plan provides the structure that is neededto keep on track while being flexible. If innovation isnt included in the plan, it wont happen,whether because of inertia, lack of management support, or lack of resources. Discussinginnovation at the annual meeting is also an exercise in the creative thinking process that isnecessary to innovate well, one more way to instill culture.

A timed brainstorming session in the annual meeting is used to gather ideas for discussion. Smallgroup brainstorming should be used to avoid the groupthink effect. Groupthink is a psychologicaleffect in which a group of people, in a desire for harmony, goes along with the prevailing view.This stifles creativity and can result in bad decisions being made due to an inadequate

consideration of facts. The ideas generated in each of the small group sessions are collected andsent to the innovation hub for processing.

If there is a formal suggestion system in place, those contributions will be sent to the hub as well.All ideas are recorded for later review through the implementation team. Dont try to decide onwhich ideas to implement at the meeting. A general goal, aligned with business goals for the year,might be determined, if appropriate. Dont be too restrictive, as innovation depends on flexibility.A brilliant idea might be generated weeks or months after the meeting; you want to be able toseize it and go with it.

At quarterly business meetings, the progress and status of all ongoing projects is reported. It canthen be analyzed against the goals that were set at the annual meeting, if any. Benchmarks andother metrics are included in the report to provide hard tracking data. This reporting is helpful for

those who are outside the project, as well as being an opportunity for all stakeholders to stepback and take a look at the big picture, from implementation to current status to futurecompletion.

Many companies have implemented Quarterly Innovation Workshops (QIWs) as a way to keepinnovation in the forefront of the business while instilling new knowledge in the organizationspersonnel. Learning to think innovatively can be taught, and workshops allow employees todevelop and practice these skills. These are workshops, not lectures; they are intended to beinteractive and to stimulate participation by all personnel. Workshops can also be used to developteamwork, a key foundational skill for the innovative approach to business.

Page 23 of 30


24/30

Your Innovation Hub

Ideas should be reviewed and evaluated regularly, the process for which should be formalizedinto the business routine, as described above. Using the methods outlined above, you candetermine which ideas have the most potential, taking them through the pipeline for furtherdevelopment. Ideas can be collected at any time. Idea management software makes it easy to dothis.

A monthly review meeting keeps projects on track. Innovation projects must remain flexible sothat they are ready to respond quickly to changes in the market or in customer behavior, or tofeedback that is encountered during the project. Resist the temptation to skip these monthlyreviews. The earlier in the process that issues can be identified, the sooner they can beaddressed.

Making Innovation a Habit

Innovation isnt something to think about just once a year or once a quarter. Every day to dayactivity should support the culture that focuses on innovation as a key element of doing business.By thinking innovatively at all times, employees will always be alert to recognizing the areas inwhich improvements could be made. All ideas should be captured at the time they arise anddelivered to the innovation hub for review. Having a procedure for doing so ensures that there are

no missed opportunities.

Building an innovative culture into your business, and making it a habit, requires a firmcommitment from all levels, and the inclusion of innovative thinking into all processes. Employeesmust be empowered to share their ideas, all of which should each be treated equally. There mustbe no reprisal for failure, as risk is inherent in an innovative workplace. Enthusiastic leadershipcreates enthusiastic followers and is a significant factor in innovative success.

There are many strategies that can be used to develop daily habits that support innovativethinking and behavior. One is to try something small new every day, as long as it isnt somethingthat goes against current procedural requirements, if any. All employees should be encouraged toexplore industry journals, websites, and competitors information to learn how to think like aninnovator.

Adopting good innovative daily habits is partially a retraining in the way of thinking. Remainingpositive in the face of obstacles and eliminating negative habitual thought that block creativethinking are essential. Another strategy is to consciously look for patterns in things; it will quicklybecome second nature. The recognition of patterns often leads to breakthroughs and innovation,either because the pattern has a detrimental effect on a process or because it suggests a way inwhich the pattern can be utilized to improve a process. There are a number of different creativethinking games that can be used to stimulate the brain to work in new ways.

There are many other habits, or ways of thinking, that support innovation. Keeping a focus on thefuture is one. The past holds data that can be useful in projecting potential outcomes, and hasprovided lessons that can be learned, but past performance should never be held as thestandard. Innovators are always thinking about ways to grow, develop, and change. They do not

settle for how things are now. Another shift in the way of thinking is becoming more comfortablequestioning things, even the most familiar ones, as a way of gaining insight and knowledge.

Page 24 of 30


25/30

Your Innovation Hub

CHAPTER 7

The Innovation Platform

It should now be clear to you that having a system to manage your innovation program is critical ifyou want to succeed. A system controls the flow of information among stakeholders, includingcustomers, employees, and third party entities. By providing structure and rules, the system lendsconfidence that tools and techniques are being applied consistently and appropriately. It alsocreates an environment that facilitates cross-functional learning. The system is designed in sucha way that it allows good ideas to be developed and implemented when they are identified withouthaving to go through a lengthy approval process, as is the case with more traditional projects.The system framework needs to be devised and implemented as the first step in theorganizations shift in business strategy.

Using a web-based system of software applications, accessible to all team members in anylocation, is the best strategy for managing your innovation processes. It should be user-friendlyand allow for access to all necessary information regarding projects and ideas that are underreview. Different levels of access, such as the ability to retrieve but not change information, caneasily be applied if needed. Using a web-based system means that you arent dependent onsoftware updates and wont face issues with different operating systems. Because data is stored

online (cloud-based storage), its not susceptible to loss and can be accessed from anywhere.

Two main types of software tools comprise the foundational components of your innovationsystem. The first is an idea tracker, or electronic suggestion management system. It can be usedto gather and compile ideas and to create visual maps and charts for planning purposes. Filteringof ideas can be done directly in the application, according to the parameters that have beenprogrammed by the user. This adds efficiency and fairness to the filtering process, as there is noperception of human bias.

The second type of tool is a broader management system which controls every element of thewhole process, from idea to implementation. By facilitating communication across the enterprise,this tool improves the speed and efficiency with which projects are able to move forward.Collaboration across multiple locations is made faster and more interactive as well. Using a

message board enhances visibility of discussions. Files can be shared and automated deadlinereminders can be set. These applications are powerful allies in helping to establish and integrateinnovative methods into your organization.

Both tools should be used together for the best results. They are inexpensive, easy to use andare much more effective than dependence on an old-fashioned paper-and-meeting based methodfor management of projects and ideas. In the innovation hub, these tools work together to providefast, complete access to all relevant knowledge and data.

There are other types of software that can be used as components of a total innovation system,including crowdsourcing lab software. Most are stand-alone applications that can be combined asneeded to build larger system, so that it can be customized to the needs of your business.

Innovation and People

In order to instill in your organization a new culture of thinking innovatively, all members of thestaff must be on board with it. The organization should foster an environment in which employeesfeel safe and can be comfortable sharing their ideas without fear of reprisal, mockery, ordismissal. Some ideas will be rejected through the review and filtering process, but employeesmust always be rewarded for their participation, even if their ideas are not ultimately chosen to bedeveloped. Employees who feel that they have been listened to will continue to generate moreideas, and some of them are bound to be worth developing.

Page 25 of 30


26/30

Your Innovation Hub

When you are making the switch to a customer-based, innovative business model, you will mostlikely encounter resistance at some level. People are naturally resistant to change. This isparticularly true in business situations, where managements fear of losing money keeps themfrom being open to new ideas, even good ones, and employees become entrenched in doingtheir jobs as they have been told to do them. This tendency to resist change is the greatestbarrier you will face in creating a truly innovative culture.

Management must be totally committed to supporting and advocating for innovative thinking.Their leadership will be essential in motivating others to embrace the new procedures. The risk offailure has to be accepted as an integral part of doing innovative business, and allowance for itbuilt in to the new way of doing things. There is abundant literature showing that a customer-based model is highly successful in growing a business, and is often more effective at doing sothan traditional profit-based strategies. However, an enthusiastic attitude will go further in sellingthe concept than just data alone.

Once everyone in the organization has thrown their support behind the shift, a good place tobegin strategizing is to look at the current barriers to innovation. Look at whether or not ideas arebeing solicited, and, if so, how those who produce them are rewarded or recognized. Look at whythe current process, if any, for gathering ideas hasnt resulted in effective innovation. Most likely,it will turn out to be simply because there is no system in place to manage the process of

innovation.

Employees at all levels should be fully educated about the reasons that innovation is critical togrowth. They need to know that their expertise in their own areas of work will be an essentialcomponent to the new way of thinking, and that they will be partners in the success of thebusiness. They should also be informed that they will be provided all the training and support thatthey will need to learn how to effectively participate in the new paradigm.

There are a number of elements that contribute to a healthy innovative corporate culture. Allworkers must have the freedom and control to do their jobs with little supervision. The workenvironment must foster encouragement and support for risk taking and open communication ofideas and feedback.

Project managers and team leaders should be deft at assigning duties to the personnel that aremost able to do them. Project managers must also be willing and able to protect the group fromoutside influences that might be destructive. There must be adequate resources, access to them,and full support for obtaining necessary resources without undue bureaucracy. Adequate time tocomplete projects without cutting corners is important, too.

Careful attention should be paid to providing recognition and reward for idea sharing. This cantake any form from cash bonuses to awards or celebrations. It has been found that grouprecognition is more effective than individual recognition, where practical, because it fosters thesense of being a team. The use of a reward system has been shown to correlate highly with thetendency of employees to generate more and better ideas over time.

Innovators are risk takers by nature, and they thrive in an environment where things frequently

change. In business, it is more common to encounter people who are not comfortable withchange. The term undertaker is sometimes used to describe a person who is so resistant tochange that they will even stoop to sabotage to avoid it. Such people cannot co-exist with aninnovative culture. Others, called caretakers, are more passive about their resistance to change.They prefer to maintain the status quo, but will eventually turn around as the new proceduresbecome more routine.

Gaining the cooperation of undertakers and caretakers within the organization can be tricky, andis part of the reason for establishing a formal system, which helps them to get used to the newway of doing things. Dealing with resistant parties from outside the organization, such as

Page 26 of 30


27/30

Your Innovation Hub

suppliers, is even more difficult. Providing data about the benefits, and how the outside party willbe involved as a stakeholder, is often a good approach. A strong commitment to becominginnovative and persistence in the face of resistance may be necessary by the advocates in theorganization to avoid early failure of the program.

Innovation and Performance

One way in which an innovative culture can be supported and allowed to become established isby using longer performance evaluation cycles. Because a new or improved product may takesome time to achieve its maximum performance, a longer cycle allows for a better measure of thetrue success of the implementation. The level of innovation in inputs, outputs, and processesshould all be measured and consolidated to give a picture of the overall performance resultingfrom innovation. Both hard (tangible, like technologies) and soft (intangible, like activities)indicators in each area should be used to measure performance.

Examples of input indicators include the number of employees dedicated full-time to innovativeactivities and the time spent on innovative activities. Output indicators may include number ofpatents, number of new products or services, and number of different innovative activities. Someprocess indicators are certifications, changes in organizational structure, amount of collaborativeactivity, amount of outsourcing of innovative activities, and measures of customer satisfaction.

Many other indicators are possible and the best balance may differ from industry to industry.

Measures which depend only on financial data should not be used, at least not by themselves. Aswas discussed above, they can obscure many of the real contribution that innovation makes toproduct and process value. Comparison with competitor performance is useful, but should not beweighted too heavily.

Ongoing measurements are important for providing continual feedback and early warning ofconcerns or arising issues. There should be weekly and monthly meetings involving all keypersonnel for the purposes of discussing the status of current projects. The report should includethe presenting of benchmarks and other key performance indicators that can be used to evaluatesuccess. Any new information that has come to light which will have an impact on the project w

Implement Innovation

Documents

Transcript of Implement Innovation