Wednesday, April 29, 2020

The Aspects of Outcome-Driven Innovation

An innovation ecosystem is a systematic innovation methodological environment or a sort of "professional philosophy" for innovation. 

In the rapidly evolving businesses and economic systems, the creation of new innovations is very complex but critical for the survival and thriving of companies across industries. Innovation is the development of a new combination of available resources, in a way that solves problems in alternative ways.

Customers are one of the most important links in the innovation process. Outcome-Driven Innovation (ODI) focuses on customer desired outcomes. Here are three aspects of outcome-driven innovation.

Customer centricity: Digital is the age of customers, the customer is the center of innovation management and they are the major focus for innovation processes and accomplishment. However, often customers don't always know how to articulate the outcomes they seek and how unmet needs translate into application designs. Thus, the customer (including prospects) should be studied and observed. Gain a deep understanding of the customers through empathy and observation with the innovator using a more inductive approach as to what the customer wants to accomplish "next."

Outcome-Driven Innovation enables customers to participate in workshops to develop innovative solutions. For every need-driven and customer-centric innovation initiative, work closely with clients to articulate their important needs; define the most compelling and novel approach to addressing their needs. The motivational construct of the customer should be placed in a judgmental role, rendering a decision about an idea. It's also important to analyze the benefits per cost of that approach, and quantify why the chosen approach is better than the competition and alternatives. It helps to assure that the results of an innovative approach will have a positive impact on the clients, partners, end-users, and the marketplace.

Methodology: In essence, innovation management is about how to manage people, assets, time, resources, and risks to achieve high-performance business goals. Outcome-Driven Innovation enables the emotion to be removed from prioritizing unmet needs, that's why so many innovation experts encourage its application in producing innovation methods. What is needed today is top-down to be more about the vision of the outcome; let employees use their brains in helping solve for leaders' intent. Every process, every expenditure of time, talent, money, or energy, and every assignment of resources should contribute to innovation success directly or indirectly.

Methodologically, there are robust processes and tools that enable an entity to generate winning concepts for innovation management on a consistent basis and via an iterative approach. It requires much more time, energy, passion, courage, experimentation, retreat, and reflection to get clear and focused on innovative ideas, business models, processes or solutions, and to then enact, embody and execute in a disciplined way.

Metrics: Innovation is a managed process that needs to be measured to drive the outcome. An organization’s innovation performance could be measured in terms of its ability to convert the ideas that enter the ‘Innovation Pipeline’ into the desired output or process improvement etc, make rough estimates such as new products, improved services, cost savings due to innovation efforts. Normally organizations look for KPIs measuring business results generated by innovation efforts. But keep in mind, solely focus on quantifiable benefits or short-term results stifles innovation or sometimes misleads management in making ineffective decisions from the long term perspective.

It is not easy to define how much was generated from innovation. You choose the KPIs by deciding which are seen as critical to making progress in order to deliver better outcomes. The well-selected measurements for assessing outcome-driven innovation helps to clarify some critical issues such as the revenue generated by innovations launched in a certain time frame; what’s the tangible value have innovation efforts brought to customers, etc. All innovation initiatives, especially outcome-driven innovation, hopefully, are started to achieve some business results directly or indirectly. Just measure that result from innovation efforts objectively and effectively, more than to measure financial results.

An innovation ecosystem is a systematic innovation methodological environment or a sort of "professional philosophy" for innovation. The customer is the center of outcome-driven innovation management and they are the major focus for innovation process and accomplishment. Innovation is a journey that involves experimentation, trial, error, research, applying structured methods or tools, reviews, systematic analysis, and debugging, etc. It is therefore not possible to pre-describe how it will work out. The purpose of Innovation Management is to prepare and manage business elements for maximizing the transformation of an idea to achieve its commercial value.


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