Tuesday, November 21, 2017

CIOs as “Chief Innovation Officer”: Three Management in Innovation Management

Innovation is not serendipity. There is the multitude of management disciplines to get it right.

The definition of innovation is simple, it is about transforming novel idea and achieving its business value. It is about gaining benefit by doing something different. 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. Here are three management disciplines in innovation management.

Observation Management: Today’s business become hyper-competitive and super-complex, and the world has also become more interconnected and interdependent than ever. The first step for innovation is always observation, following by questioning, experimenting, and networking. The progressive enterprise needs to learn and grow through observation; by observation, you recognize the pattern, by observation, you connect the things; by observation, you associate the best services cross the industrial or geographic boundary. The "Observing" phase is all about the 'sensors' that you can deploy. There are three stages of “Observation”: The best observations come from staying still and trying to understand what you're observing is all about. Secondly, what you see depends very much on what you are familiar with and on the parading, your personal perception. Thirdly, cognitive science confirms that what you see depends very much on your goals and on what you concentrate on given the limited amount of working memory available. Before taking actions, start a deep observation to understand your business, and assess the business stage in an innovation life cycle of the business. To fuel innovation, staying a novice of some sort, keep fresh eyes, with the beginner’s mind, to observe deeper: By observing the industry and emerging technology trend, the business can adjust the strategy, capture the business innovation opportunities, set the right priority to strike the right balance of functioning well today and prepare for the future. By observing people - either customers or employees deeper, the business can understand their pain points, and figure out how to provide innovative products/services to delight them. Therefore, observation is not just some “nice to have” activities, but needs to become the digital management discipline which can fuel innovation.

Resource Management: Organizations have limited resources, many businesses took a big bite of resource to keep the lights on, only left very little for doing innovation. Thus, resource management becomes an important management discipline to improve innovation effectiveness and efficiency. In fact, the essence of innovation is about how to manage people, assets, and resource to meet the business goals for innovation. You need to make sure the right people are put in the right position with the right talent to manage innovation. You need to make sure the management is forward-looking enough for “doing more with innovation.” The resource is assigned scientifically, to make sure that your company has a steady flow of fresh ideas floating in your innovation pipeline, and you need a methodological platform that allows you to do that in an efficient way. Innovation needs to be the collective habit of the business, you have to live it and breathe it every day, otherwise, you don’t feel accomplished. Innovation is a management process and business competency. It requires much more time, energy, passion, courage, experimentation, retreat, and reflection to get clear and focused on the innovative idea, business model, process or solution, and to then enact, embody and execute in a disciplined way.

Metrics Management: You can only manage what you measure. There is no exception for innovation. Thus, metrics management is a crucial component of innovation management. Metrics provide feedback. Metrics are part of transparent visual management allowing pulling all resources for orchestrating innovation. It’s important to set guidelines for developing customized innovation metrics. Normally organizations look for metrics for measuring business results generated by innovation efforts. There are good reasons to focus on top line vs bottom line benefit from innovation. You choose the Key Performance Indicators by deciding which are seen as critical to making progress in order to deliver more innovations. Often, poor-defined metrics can mislead, create the other layer of complications, cause confusion or suck the energy. Innovation performance indicators need to focus on measuring quality, quantity, time, cost, revenue growth, profit improvement, margin targets, product variety for stability, turnover, shareholder/owner return and talent sustainability, etc.

Innovation means something new and valuable. Innovation is relative and has a context. But innovation is not serendipity. There is the multitude of management disciplines to get it right. Innovation Management needs to take a balanced approach to provide maximal freedom for ideators, and then set straightforward process for converting an idea into an implementable innovation, to achieve its commercial value and bring high-performance business results.


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