Sunday, May 25, 2014

Innovation Best Practice: Practical or Contradictory

The winners set the "best" practices and the laggards try to emulate them.

Innovation is how to transform the novel ideas and achieve its commercial values. Due to the open nature and “out of box” thinking of innovation, is it contradictory to do that inside of the constraints of "best practices"? Is there actually anyone using what to be considered the 'best practice' in innovation in reality? Does best practice really improve innovation success rate or increase innovation efficiency?

Innovation is a management process, not just a serendipitous magic. Originally, all best practices were industry specific and evidence-based, meaning they were based on data. And practice is always a combination of (1) people and (2) how they are used to doing things. More and more firms are learning and implementing best practices in innovation, perhaps it is a better approach to strive for using good practice - good for a certain organization and for the specific situation and challenges that are faced and that actually requires different priorities as compared to others. Not every innovative company uses every best practice. Not every authority agrees on every best practice. Some "next practices" continue to emerge - after all, the people who use today's best practices are innovators. Still, there is a recognizable core of approaches and activities that produce profitable innovation, and there are companies that use them.

One size doesn't fit all. The best practice is more about setting principles and standards. Markets change and shift and for each company attempting to deal with these changes, there is a different path to follow. The practices that are "best" today are almost always not "best" in the future since practices as well as technologies and markets are constantly morphing under pressure from the waves of creative destruction that keep business in innovation mode. Thus, the innovation best practices are not for making static or rigid processes, but more about setting the principles and standard to achieve innovation management excellence with agility and flexibility. Keep the old quote on the mind to understand one size doesn’t fit all: “if all you have been a hammer, you tend to hit everything as if it is a nail”.

The key is 'context'. If the best practice you want to adopt is to be implemented in the same context, it could work. If the context is different, it is worth understanding how that difference could impact so-called best practice. It may actually lead to a better solution for your environment. Learning from own or others’ experience will never be as long as we know how to transfer it into our actual context. The real challenge is to understand where and how we can and should improve to get the biggest effect. With effective tools or methodologies, it can be used wisely and with the expertise to really add value or drive innovation.

Best practice and next practice. One of the benefits of the phrase "best practices" is that it is aspirational. Every organization should strive to explore "best practices" throughout their organization. These practices might be different across organizations, across departments, divisions and affiliates within an organization and can change over time. In fact, they should change and evolve over time. Organizations change, new practices continue to be developed and there should always be an objective to become even better. Interestingly, while people may disagree as to what best innovation practices are, they generally recognize poor innovation.

 Best practice to improve innovation efficiency: Best practices should get their claim from being the method that takes the least amount of time and resources to deliver a product or service while still meeting acceptable quality standards. Perhaps some industries are less rigorous than others. Every activity takes time and resources and must meet quality standards. Whatever the activity, there is one best way of performing it; one way that uses the least resources takes the least time and still meets quality standards. That method is the best practice, the practices when they see them. This should give implicit support for the idea that there are "better" innovation practices, even if one does not buy into the idea of "best" practices.

The winners set the "best" practices and the laggards try to emulate them. Winner companies cite many more sources of advantage (resource control, customer captivity, first mover advantage, coordination, moral force, economies of scale), But the laggards only try to emulate, there is a risk to that because when you emulate your competitor you start looking like them. You may cut their lead but also risk eroding what makes your business special. This is when people started talking about "core competencies" and "capabilities". People began to see that companies differ and what is best for one business, may not be good for the other one. 

Innovation is the management discipline to reduce business complexity or increase revenue, the best practices may help businesses to manage innovation more systematically, but they shouldn’t be static or rigid, and there’s no one size fits all.


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