Wednesday, October 21, 2015

Is Innovation management a waste?

The purpose of Innovation Management is not to promote innovation, but to manage innovation as a process.

Innovation is to transform the novel ideas to achieve its business value. Innovation is not just about ideas or exchanging ideas, based on most of the innovation models, idea creation is only one step of the innovation process. Therefore,  in a basic view, innovation is a process and every process needs to be managed. But what’s the best approach to managing innovation? And there is the deduced question: Can you transform an idea into sustainable benefit without IM?

Innovation is absolutely a mindset; but via Innovation Management ( IM), you will create/enforce this mindset! People can learn tools to develop both their divergent and convergent thinking skills. They can learn to generate more novel and useful ideas in diverse teams.  innovation is a mindset and a prerequisite to doing sustainable business these days. Innovation is more than designing new products, it is about establishing and nurturing a way of thinking where innovation is in every aspect of the business. Mindset leads to (innovation) culture, where the leadership has to understand that it is the process. As an organization, you need to manage your strategic directions, your process, capabilities of your people to create a much more innovative organization.

Innovation Culture (IC) is like Safety Culture: You have to live it and breathe it every day, otherwise, you get injured. In the case of IM, you are really talking about how to manage resources (people, assets) to meet a new innovation objective. They are two very different things. IC is a mindset, a way of doing things, risk-taking, doing things differently, asking hard questions, failing and being able to fail again without repercussions. it is the organizational culture that you need as the grassroots of innovation. Management has to align its objectives with its culture, otherwise, it is a lip service and no true innovation can occur. Also, innovation can occur anywhere in the organization, and frankly, it has to occur in every aspect of the organization. People have to question why things are done a certain way, why people use products a certain way, what products the customer doesn't even know they want, why certain processes are done in certain ways, etc. Innovation cultures are behaviors towards innovation within the organization. CULTURE are the patterns of BEHAVIOR towards something: What is organization’s INNOVATION culture? Behavior towards innovation within the organization. At the 1st place, to what extent the innovation is (actively) embraced from every group of employees, whether C-levels allow and foster innovation (processes). In that respect, innovation “policies, programs and structures ” are the RESULT of IC. If IC is poor, innovation TOOLS will not be in place and vice versa. Organizations really need some kind of “spark” to initiate the seed of IC. The things are often missing in advocating are the CONSEQUENCES of poor innovation culture. So primarily you have to change the culture, then come "policies, programs, and structures "! And to change IC, you have primarily to change top leadership. How you intend to change policies that govern the innovation process, if C-levels are against? They will not allow to the internals to change anything and they will not hire external innovators! If you are not planning to use policies, programs and structures to change the culture, then what are you planning to use? These are the three tools that management has to create the desired culture.

IM needs to take a balanced approach: It is invaluable in the management of the innovation workflow, decision-making, and development process framework. IM is a way to manage the spend for R&D, just like stage gate and other project management and decision tools. IM is a set of tools for managers to oversee and report on product/process/idea development. IM needs to establish the framework to manage innovation in a systematic way. People can learn several things relating to creativity and these can come under the heading of innovation management. For example, people can learn a process to define the innovation challenge, generate and select ideas, plan for these to be implemented. They can do this so that better ideas get tested quicker and learned about faster. No doubt about it. Second, people can learn about their own problem-solving style. However, overly rigid IM processes kill innovation, because such management is about bureaucracy and innovation is about creativity. But if we say that IM is OPPOSITE to innovation and IM kills innovation, then it is the extreme which makes more harm than benefit! Take a balanced approach: provide maximal freedom for ideators, then straightforward process for converting an idea into an innovation. Maybe special attention has to be focused on idea assessment part of the IM process: if the process requests from ideators to elaborate on 20-pages form of their idea, ending with SWOTs, feasibility studies, and business cases, then it is lousy IM process design! it is also impossible to make innovation at risk level reaching 0! And effectively, when IM is oriented like that, the only thing possible is to move backward. In fact, IM has to bring strategy to allow ideation and creativity growing unencumbered, and to pick up the ideas that will become innovations…

There are three factors need to line up for innovation to flourish: Innovation Management is a process tool which per se neither drives innovation competence nor innovation results. It is one of the 3 factors which need to line up for innovation to flourish. The other two: the existence of an explicit innovation strategy and a company culture which fosters innovation. All three factors need to have long term top management commitment and personal support. Delegation does not work here. Innovation management is not about generating innovation/ideas, but rather the processes to take ideas to value. In this process, certain ideas or opportunities will have more business appeal than others - and given that resources are limited. So the IM process 'should' enable focus on most attractive opportunities. If a company’s IM process is charged with 'creating the ideas,' it will likely become ineffective and stifle to the innovation mindset. If IM also provides a mechanism for the organization to freely express ideas and for these to be built upon, then this model can greatly enhance idea generation within the business.

It’s critical to strike the right balance between ideation and execution part of the innovation process. Far too many innovation management experts excel in helping their organizations  to create ideas but come short in the other two phases of innovation. Before ideation, companies need to discover insights. After ideation, companies need to filter, prototype and validate their ideas. Far from stifling the production of ideas, managed ideation produces far more ideas than unmanaged brainstorming and thinking do. The quality of those ideas, however, depends on the insights that fuel them. The results of those ideas depend on the ability of the company to select the best ones, develop them and implement them. The true root of the challenge stems from either knowing or not knowing what you want to be to who! Companies or brands who understand and execute against that filter daily are far more likely to be successful in the long run.

It's a matter of measurement. The problem is that the KPIs to measure success in business have so often been predominantly financial in nature. The leading indicators for successful innovation are NOT financial, and most Innovation Management initiatives are not successful and are incredibly wasteful. The key is to properly measure, their success behaviors and hold them accountable. There is the standard way of measuring the innovation performance in the company: share of profit or revenue, generated from innovation. Of course, it is not easy to define how much was generated from innovation, but there are rough estimates: new products, improved products, cost savings due to innovation in internal processes.

If you don't have IM process in place, it is substantially harder and less likely to be an innovative company for the long run. This means that your processes will be less safe and economic, products more expensive or with lower quality. Creativity results in ideas but until those ideas are actualized they will remain ideas. It is only after the ideas are implemented that they become innovations. That is innovation management.


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