Tuesday, July 19, 2016

Good Innovation, Bad Innovation: How to Discern It

A good innovation shouldn't be just serendipity, and bad innovation needs to become a learning lesson.

Innovation is the light every business is pursuing, and there is no surprise that the average success rate of Innovation Management is very low. The good innovation can leap the business to the next level of prosperity, and bad innovation can fail the business in a fatal way. So how to set the criteria, make a clear discernment, and manage innovation more effectively?

Attitude toward risk: Failure is part of innovation; it is very much an intrinsic part of innovating. And innovation is always a tough journey, not a flat road. So the differentiation between a good innovation and bad innovation is the innovation leaders’ attitude toward risk. The positive attitude to take the calculated risk and be cautious about obstacles or pitfalls, can inspire a good innovation initiative, and avoid a bad innovation pitfall. Like many other things in businesses, take 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. The leadership attitude toward risk also directly impacts on how the business manages a healthy innovation portfolio, with a certain ratio of incremental innovation practices, and breakthrough innovation adventure. For example, the large enterprises are often much better at incremental innovation than radical, so they also rule on incremental innovation due to their history and incumbency whereas the startups lead on bringing out more radical innovation. Creativity typically comes from having some resources that you can apply to problem-solving. 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.

Following rules versus bending or breaking rules: Creativity is about thinking out-of-the-box, and innovation is about transforming the novel ideas to achieve its business values. There is the time to break the outdated rules and there is the time to bend the rules, and there is the time to set new rules. By nature of creativity, it’s about discovering the new way to do things, and it often means to break the old rules or the “old way to do things.” However, setting rules to keep the focus on managing innovation effectively is also important for reaping profit from good innovation. Shaping a disruptive innovation to fit the market often requires strategies, designs and product introductions that build towards the long-term vision. Breaking the old rules is important for radical innovation, but it doesn’t mean to be “ruleless,” get lost or lack of focus. There are no rules for how you deliver those benefits, but to begin the disruption, history would suggest that they must be offered, and therefore a good rule is to ensure that innovation efforts are focused in that direction. The right set of ‘rules’ is not for limiting your imagination, but for framing the system to identify opportunities and mitigate risks. Rule-breaking or rule-making demands insight, understanding, patience, persistence, and courage, among other things. In essence, If you look at the history of market disruptions, they almost always deliver some combination of the benefits of affordability, convenience, and ease-of-use compared to higher-performance existing solutions.

Aptitude to manage innovation: A company has finite resources to apply to get the best yield possible to meet a stakeholder expectation. So there’re always some constraints for businesses to explore the new opportunities or deploy the new ideas. 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. An overly complex process can easily stifle innovation as organizations get locked into huge processes around building extensive business cases. To optimize the innovation process (minimizing cost, time and risk, maximizing scalable solutions) requires much more effective cross-functional collaboration throughout the innovation pipeline.

There is no common standard to differentiate good innovation from bad innovation. But it’s important to develop the best and next practice for innovation management, it’s also critical to groom more highly effective innovation leaders with both positive and risk-intelligent attitude and high aptitude. It’s crucial as well to learn from failures (bad innovation), fail fast and fail forward, to make good innovation not as serendipity, but a new normal.


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