Tuesday, June 8, 2021

Innovation Probability

Science of innovation management is to improve probability of innovation and amplify overall innovation impact.

Innovation is the process to transform innate ideas to achieve its commercial value. Innovations can range from small to game changers. It's the essence of evolution. You have to manage it in the right way with the right elements, strategically and systematically to achieve consistent business results. 

Generally speaking, less than 5% of the ideas submitted will be implemented. This could leave more than 95% of people frustrated. What’s the art behind creativity, the science behind innovation, and how to improve its overall success rate?

^Breadth + ^Depth + = ^Probability for Innovation:
With the exponential growth of information, many times, businesses today do not lack ideas, but lack good ideas, or lack the effective processes to manage ideas; lack of innovation leaders who can break down some outdated rules or linear management thinking box, etc. Scientifically, innovation management is about prioritization, good ideas over many ideas. It’s about how to leverage the art of imagination and science of inference logic to improve its probability ratio.

Nowadays, it’s not so easy to count on one individual or one team to do innovation, more often than not, it’s a cross-boundary collaboration. The breadth of innovation is dependent on the interdisciplinary understanding of the patterns and information clues behind the puzzle. Innovation is a means, not an end. If you don’t know where you want to go, you are unlikely to get there. The very goal of doing innovation is to solve problems large or small; the depth of innovation is to dig into the root cause of issues, and figure out the best technique to solve it in an alternative way.

It’s important to set good criteria to evaluate ideas and have the right process to prioritize ideas accordingly. There is transparency in follow-up of a system of innovation process from the idea up to the implementation. There is also the mechanism to collect feedback and gain the management and peer recognition. Make the innovation process as visible, company-wide, as possible, but not too rigid. In the dynamic business ecosystem, to reach the depth and breadth of innovation management, a corporation needs the processes and culture to sustain cross-boundary engagement to discover external ideas, the governance mechanism to manage risks; and recognize different innovation roles such as idea creators, facilitator, or implementers, in order to build a highly innovative team with complementary skills to expedite innovation delivery and improve innovation management effectiveness.

Probability x size of expected impact = estimated value of the alternative: If traditional business solving is about following the linear logic to make incremental improvement. Business managers jump into ‘how,” before digging into “why”; put too much effort on the operational side, without challenging the “we always do things like that’ mentality. Innovation is about figuring out multiple choices to do things and often, leverage nonlinear logic to solve thorny problems for making a big impact. Continue to look at new ways to analyze and refine "problems." It’s important to ask tough questions, channel energy, enthusiasm, and ideas, to pick up the right problems, and solve them creatively; to not only come up with one solution to the old or new business problem, but multiple innovative solutions to generate multilateral values, such as employee value, customer value, supplier value, channel partner value, alliance partner value, managerial value, brand value, and societal value, etc, as their stakeholders are diversified.

In principle, you seek inventions, new designs, and creative problem-solving. It means to never think there is a short list of solutions. In practice, innovative problem-solving starts with creative communication, sets alternative choices, and then you have to make the best decisions you can, masters the art of creating unique, differentiating business solutions from piles of commoditized technologies and takes advantage of the emergent digital trends. Unfortunately, there are many barriers to innovation success: Too many people are stuck in the mud of the old ways of solving problems, or there is a pervasive obsession for purely numerical success indicators sweeps aside much of the softer, more qualitative information that is crucial in the understanding of the health of the firm's innovation efforts, etc.

It’s important to estimate the multifaceted value of innovation alternatives by calculating the probability and potential impact. So it’s important to select Key Performance Indicators carefully by deciding which are seen as critical to making the significant innovation process improvement for delivering better business results.

Probability x capacity = performance: Organizations have limited assets, resources, talent and time, innovation has a very low success rate. Capacity planning needs to be part of the corporate innovation management discipline. A quality capacity planning program will enable the business to switch to a proactive mode and bring you in control when experiencing high velocity and uncertainty. To make capacity planning effective and practical, it is important to get the bigger picture, make decisions about the ideal workload, and be clear on what, who, when, and how to achieve business goals based on the financial value and available resources. The management can have a big picture of what’s going on so that they can justify the capacity planning properly.

In forward-looking organizations, innovation is not some random efforts, but a differentiated business competency being built systematically to accelerate performance. Capacity planning allows for a transparent view from across the organization that should help level the playing field. It’s important for business leaders to improve capacity management effectiveness by keeping their process transparent, enforcing accountability at all levels, and focusing on long term innovation strategy management. To make capacity planning effective and practical, the management should do the data based forecast, ensure that application development does not proceed without a "clear business rationale." A quality capacity planning program will enable the business to switch to a proactive mode and bring you in control when experiencing high velocity and uncertainty.

Digital innovation has a broader spectrum and diverse taste. Looking at innovation from the perspective of developing business-wide innovation capabilities. It is a disciplined approach to discovering and building opportunities in creating new meaningful sources of value and improving probability, as well as amplifying overall innovation impact.


Post a Comment