Wednesday, December 14, 2016

The Achilles Heel of Innovation Management

Innovation involves new ways of bringing together ideas and resources to create something novel and then transform those novel ideas to achieve the business value.

Businesses today face fierce competition and rapid digital shift either technologically or economically. Most of the organizations are focusing on improving margins by reducing the bottom-line cost rather than top-line growth; because innovation and risk are proportional, also because very few organizations can master innovation and generally it has a very low success rate. So what is the Achilles Heel of innovation management? And how can organizations improve their innovation capability and reap more business benefit from it?

There is innovation friction: Innovation is about change, change in a work environment is hard. Once people get into a routine at work, they typically do not like to hear about how things could be done differently to make the work more productive, fun, effective, or error-free, etc. People consciously or subconsciously protect their status quo. To be truly creative means challenging conventional wisdom and beliefs, and making progress intellectually and psychologically. Further, even if there is a real mandate for change and everyone agrees a change is needed, most people at most of the time want to find something quickly: "low-hanging fruit" or "quick wins" rather than something more radical. But digital transformation or radical innovation often requires mind shift, from a static mind to a growth mind; from “we always do things like that,” mentality to “Is there better way to do things” attitude. And people also look for “What’s It In Me” for the change or innovation. Why should they change if the system is working for them? It’s not like that people don’t like innovation, but rather that people don’t like to be challenged, they need a clear vision, well-defined principles, and practices, and keep motivated to move forward.

Lack of risk-tolerant culture: Innovation and risk often go hand-in-hand. With creativity, "change" is made." With every "change," the risk is involved. The more dramatic and powerful the innovation is, the greater the risk would be. However, people tend to be “risk averse,” and most of the organizations are not fertile ground for ideation, also do not have a culture of risk-tolerance to cultivate innovation. They fear taking risks and seldom learn from their mistakes. But the fact is that anyone or any company that fervently wants to be creative must be willing to face risks, and overcome the fear associated with such risks. The failure is of crucial importance in the process of achieving innovation. These lessons learned will increase the effectiveness of your innovation management and therefore probably increase your chances of meeting your objectives on your next attempt. Hence, the best judgment, a qualitative framework, with the risk-tolerant culture are important for managing innovation effectively.

Lack of a structural approach for innovation management: Most companies fail at innovation execution because they have no clear process, nor understand the linkage required to work horizontally across departments, or a holistic approach to managing innovation. Systems and tools have changed, and in fact become more effective, thanks to the more powerful digital technologies, but the step by step process is still valid. Innovation execution requires a systematic approach with clear stages, performance thresholds, and decision-making parameters combined with an iterative, experimental learning process that supports wide-ranging exploration at each stage. Idea generation is important for innovation management, but lots of ideas mean you will fail if you do not have a screening process to systematically evaluate them, their internal politics and fears diminish creative projects by means of senseless KPIs, while they push down the innovation funnel; so keep the business process as simple and flexible as possible, as the creative environment is an incubator for innovation, the harmony of people and process can orchestrate the impressive innovation symphony.

Innovation involves new ways of bringing together ideas and resources to create something novel and then transform those novel ideas to achieve the business value. Identification of the novel is only the beginning, the heavy lifting starts as a firm aligns resources and executes these novel ideas effectively, pay more attention to the "Achilles Heel" in innovation management, so the firm can seamlessly manage innovation life cycle and execute in a manner that provides sustained competitive advantage.


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