Tuesday, December 6, 2016

Five “A”s in Innovation Management

Innovation becomes simply ”creating value by solving simple or complex problems.”

Digital is the age of innovation. The blurring border of the digital organization and its business ecosystem make the world hyper-connected, but also over-complex. Organizations today can no longer rely on a single individual or team to drive innovation. It often has to be managed in a structured way across the organizational scope and digital ecosystem. It is largely due to the fact that innovation in the digital dynamic has become increasingly complex in nature and expands its horizon for impact. Innovation needs to lay out different mindsets, structures, processes, capabilities to unleash its potential. There should be encouragement and involvement by management to spread the culture of innovation via five “A”s.

Altitude of innovation impact: Innovation needs to become an important component of the business strategy in order to present the altitude of innovation impact. Innovation strategy has to be practiced by management in true spirit. Being innovative is the ability to co-create in a digital ecosystem; a co-creation strategy treats customers, channel partners, suppliers, and industry ecosystem participants as active agents who have permission to combine the modular capabilities exposed in a platform to create new experiences. To amplify innovation impact, information systems play a fundamental role in deploying and operating within digit ecosystems. An open information platform enables companies to integrate the critical components of a digital business system, which is “open” not only because it allows information exchange and participants involvement, but also because it ensures that interdependence and collaboration between partners are taken into account and build up a strong innovation engine.

Allocation of resources: Creativity typically comes from having some resources that you can apply to problem-solving. Innovation is the sustainable and scalable way to building a balanced innovation portfolio as a practical approach for optimizing resources and improving risk intelligence. A company has finite resources to apply to get the best yield possible to meet a stakeholder's expectation. So there’re always some constraints for businesses to explore the new opportunities or deploy the new ideas. If you prioritize across all projects, you know which projects should get that extra increment of analysis and design effort. Prioritization is about managing constraints: you can't do everything, so which innovation initiative will you take to maximize the value with calculated risks? With the right attitude and scientific approach, the evaluation and prioritization are taken place to leverage resources in innovation management.

Aptitude to manage innovation: Because innovation is not all about products and services, it can also be used for cost reductions, process, and business model changes and improvement. The good or bad innovation would depend on the business’s aptitude to manage innovation. And the aptitude is based on the set of tools, structure, and talent, which are better equipped to manage innovation by allocating time and resource to the people in charge. Innovation Management System includes policies, structure, and program that innovation managers can use to drive innovation. Remove any of the three, you're liable to fail. You apply principles of approach and vary the resource and tool mix by the ever changing environment, day to day through the year to year. An overly complex process can easily stifle innovation as organizations get locked into huge processes around building extensive business cases. For example, ideas are crucial to an innovation program. You need to make sure, that your company has a steady flow of fresh ideas floating in your innovation pipeline, and, therefore, you need a methodological platform that allows you to do that and aptitude to manage them well.

Attitude toward risk: Innovation is always the tough journey, not a flat road. Failure is part of innovation; it is very much an intrinsic part of innovating, but fail forward and learn some lessons from it. So the differentiation between a good innovation and bad innovation is the innovation leaders’ attitude toward risks. The positive attitude to be cautiously optimistic, take calculated risks and be alert about obstacles or pitfalls, can inspire a good innovation initiative, and avoid a bad innovation pitfall. Like many other things in businesses, innovation management takes a balancing act to have enough failure and an environment that encourages learning from failure quickly and cheaply, without having failures that are too frequent or too expensive.

Assess innovation performance: Assuming an organization believes that metrics can lead to continuous improvement and improve innovation effectiveness. The perception will come from the usage you're doing with metrics. It won’t be just a matter of explicit communicating the intention behind metrics, but a matter of coaching and leadership to guide the team via understanding the purpose of doing that and engaging on that. Innovation management assessment and measurement is both art and science. In many companies, a pervasive obsession for purely numerical success indicators sweeps aside much of the softer, more qualitative information that is crucial in understanding the health and well-being of the firm's innovation efforts. Always keep in mind, the goal of innovation assessment and measurement is to build innovation capacity, not about adding the new layer of complicated processes and causing more confusions or problems as a side effect.

Innovation becomes simply ”creating value by solving simple or complex problems.” Innovation is a production, adoption, assimilation, and exploitation of value-added novelty in economic and social spheres. Digital organizations reach the tipping point of the next level of innovation flow, the innovation management will have to catch up to the business needs with digital speed.




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