Saturday, August 6, 2016

Apply Discipline to Innovation

Applying discipline to innovation is to better align innovation management with strategy.

Innovation is how to transform novel ideas to achieve their business values. Innovation management has an overall very low success rate. Innovations in the digital era are coming at seemingly much fast space, with changes and potential disruptions, and therefore, innovation management also becomes more complex and dynamic. Innovation is not serendipitous, how to apply discipline to innovation for improving its success rate?

The discipline to manage innovation strategy-implementation continuum: Innovation is a critical component of the business strategy. In general, business innovation is a management discipline. There are three success elements in innovation management: an innovation strategy, a culture to support or even drive innovation, and an innovation management mechanism. The problem is that many organizations do not set the right conditions for the innovation strategy to occur within, something along the lines of the right people with the right mindset in the right roles doing the right work with the right interdependence. Also, innovation strategies don't just require the right tools, the tools are the last piece. In fact, the strategy itself is the last piece prior to implementation. Innovation strategy creates a clear line of sight between the enterprise vision and how to build a balanced portfolio with mixed disruptive innovation and incremental innovation. The innovation strategy is not a thing or even a state, but a process of lining up the culture of change and creativity that people would like to take the calculated risks in experimenting a new way to do things, with the business model they create to get it done.

The discipline to manage innovation in a structural way: Applying discipline to innovation is to figure out how to manage innovation in a structural way. Generally speaking, innovation actions, processes, and tools can be taught to employees. But innovation essential, if you mean technical creativity, originality, insight, ingenuity, etc. can't be taught, but needs to be discovered by talent people on their own. The perspective comes down to how you define innovation. What one person calls innovation, another will say it is a trivial and self-evident step. What one person calls an act of genius, another will treat as unworkable insanity. The right kind of mind is an essential feature of real innovation. Those flashes of inspiration we now see in retrospect as groundbreaking inventions or innovations were driven by people not only far-sighted but determined to make their ideas succeed. Businesses, especially the mature, large corporations and within that environment, innovations can range from small to game changers. Also, it is important to note that within the organizations, innovation is rarely an individual action; rather it is a team effort, often across multiple organizational silos, you need to manage innovation in a structural way via a good alignment of innovators, the disruptive technologies, and rigorous, but not rigid processes.

The discipline to measure innovation via a set of well-defined metrics: You can only manage what you measure, there is no exception for innovation management. There are good reasons to focus on top line vs bottom line benefit from innovation.  It’s important to set guidelines for developing customized innovation metrics. Select the few (3-5) KPIs, to keep the measures simple and understandable. The innovation metrics in the context of business impact include such as % of revenue from new products or services. You could also change the variables and create something like % of the profit from new ideas implemented. Some choose innovation process KPIs, which could link to strategy, to make progress on the percentage of projects in the total innovation portfolio which contained a major part of external innovation. All innovation initiatives, hopefully, are started to achieve some business result directly or indirectly. Just measure that result objectively and effectively, more than to measure financial results. And always keep the measurement simple, understandable and understandable.

Applying discipline to innovation is to better align innovation management with strategy, to justify the initial investment in the program and the initial results, setting principle for innovation management and measurement, cultivate a culture of change and creativity, develop the best and next practice in idea management and process management, and keep the ends in mind - to grow businesses and achieve high performance business result for long term.


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