Wednesday, January 18, 2017

“Unpuzzling Innovation” Book Tuning: Managing Innovation with Structure

In essence, innovation is, "intentional novelty bringing sustainable benefit.

Digital is the age of innovation. Because innovation is what leads to differentiation. Differentiation creates the business advantage. There are many ways to differentiate and, therefore, there are many ways to pursue innovation. Innovation is to transform novel ideas and achieve its business value. In essence, innovation is, "intentional novelty bringing sustainable benefit." Innovation shouldn’t be serendipity, it needs to be managed in a structural way.

The success of the high-innovative organization is not accidental because innovation is a high mature digital capability which needs to be built via disciplines, structure, processes and practices: Innovative organizations have deployed a range of different management, technology, process, and structural solutions. It starts from managing business goals transparently together with innovation. If you don't have innovation process in place, and if you don’t build the innovation as the critical business capability, it is substantially harder and less likely to be an innovative company for the long run. This means that your processes will be less effective and economic, products more expensive or with lower quality. A defined structure is essential to managing innovation in a corporation, but there's no single structure that will work in every organization. More precisely, you don't structure innovation. 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.

Both idea creation and idea management are important to achieve innovation excellence: You need to make sure, that your company has a steady flow of fresh ideas floating in and you have a methodological mainframe that allows you to do that. The process to support the creation of sustainable, systematic innovation can be structured. If social collaboration, innovation management, and development processes are driven by clear strategic goals, the risks are easier to manage. This also enables co-creative processes. 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. Because how an organization orchestrates to generate ideas, manages the activities, measures the results, etc, is determined by how that organization has decided to craft the innovation effort. The paradox of innovation management is to strike the right balance between innovation and standardization. Standardization is inside-the-box (ITB), and Innovation is outside-the-box (OTB). Hence, organizations indeed need both, and, in fact, cannot realistically exist without a healthy balance of both in order to achieve innovation excellence

Defining innovation process measurement is also important to demonstrate the growing capability of the organization to deliver more innovation with business impact in the future: What gets measured, gets managed. Metrics is not the end-all solution to management, but simply another set of tools, data, and information sets. Choose the right metrics by deciding which are seen as critical to making progress on, in order to deliver more innovations. The process performance indicators could link to strategy, to make the progress on the percentage of projects in the total innovation portfolio which contain a major part of external innovation. The problem or the potential pitfalls of innovation management is that the KPIs to measure success in business have so often been predominantly financial in nature, but the leading indicators for successful innovation are not financial, the key is to properly measure the right things in the right way, and also keep the measures simple and understandable.

For many organizations, innovation is still serendipitous. The exercise of deciding just what innovation is within each organization IS the single most critical activity of an innovation effort. Innovation is the development of a new combination of available resources, in a way that solves problems of others in a more suitable way. Build innovation as a differentiated business capability by managing innovation with the structure and keep the business process as simple and flexible as possible, because the creative environment is an incubator for innovation, the harmony of people and process can orchestrate the impressive innovation symphony.


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