Innovationbreakthrough Chapter 2 Introduction: The Innovation Framework and Key Success Factors

 Innovation Management needs to establish a comprehensive framework to manage innovation in a systematic way. 

Innovation is not serendipity. Working in an innovation garden not only takes passion but also needs processes and hard work. A systematic innovation approach is to depict innovation as a system, rather than a traditional process. Innovation performance depends on the alignment of its various components such as people, process, resources, actions, controls, or measurement, etc. Although there's no single structure that will work in every organization, a comprehensive innovation framework with all important enterprise components is the great tool to intensify innovation with focus and manage innovation in a structural way.

• Innovation strategy: Digital is the age of innovation. At today's modern organizations, variety, complexity, diversification, and collaboration are the very characteristics of the digital innovation ecosystem. Innovation is similar to "the sum is larger than its parts." Innovation strategy is an integral component of the business strategy. It helps to diagnose the critical business issues which need to be solved creatively, set guidelines and manage innovation systematically. 

Innovation is costly most of the time; that is why you should really concentrate innovation on the main issues of your strategy. In general, business innovation is a management discipline. Innovation return on investment is often proportional to the risk it exposes. The realities of corporate survival don't allow companies to spend all their resources on radical innovation, because of the high percentage of risks of failure. Therefore, a comprehensive innovation strategy creates a clear line of sight between the enterprise vision and how to build a balanced portfolio with mixed breakthrough innovations and incremental innovations.

• Innovation process: The innovation management is not a thing or even a state, but a management process of lining up the culture of change and creativity that people would like to take calculated risks in experimenting with a new way to do things. Innovation processes should enable us to focus on the most attractive opportunities. Innovation management is not just about generating ideas, but rather the processes to transform ideas into business value. 

The “hard” issues to stifle innovation are that the systems, processes, or technology many organizations are using to capture innovation value are becoming inefficient in this rapidly changing world with the high degree of digital convenience. Organizations can become more effective in executing innovative ideas by relying less on silo functions, more on cross-functional collaboration and continuous improvement. 

There is a great deal of uncertainty involved in the process of innovation. Innovation process includes both idea creation and implementation. Before ideation, companies need to discover insights. After ideation, companies need to filter, prototype, and validate their ideas. The right level of guidance and process is important, but the overly rigid processes or too “pushy” goals will stifle innovation. Innovation processes evaluation is clear, but the process of "planned innovation" shouldn’t be too rigid. Planning in some steps is ok, but chaos to some extent is necessary.

• Innovation culture: Innovation can occur anywhere in the organization, and frankly, it has to occur in every aspect of the organization. Innovation culture is a collective mindset, a way of doing things, a risk-taking attitude, doing things differently, asking the hard questions, failing and being able to fail again without repercussions. Innovation culture provides a mechanism for the organization to freely express ideas and for these to be built upon, then this model can greatly enhance idea generation within the business. 

People have to be inquisitive to ask why things are done a certain way, why people use products or services in a certain way, what products or features that the customer doesn't even know they want, why certain processes are done in certain ways, etc., and overall, how to improve products, services, processes, or business models to delight customers. 

The risk is part of innovation. You want people to be able to and dare to take risks. It is important to create a safe environment within the group and organization which encourages people to come forward with new ideas with calculated risks.

• Innovation talent: Innovation is a mindset and a prerequisite to doing sustainable business these days. People are innovation masters, neither processes nor tools. To create a new idea requires not just one skill, but many, not just old experiences, but new perspectives. Innovators are the round pit, don't fit the square hole, they are disruptive to the status quo. Indeed, innovation is all about how to disrupt the old thinking and the old way to do things. 

It’s important to spot and develop innovators because they are the driving force to bring up new ideas or rejuvenate an innovative culture, and achieve the ultimate business value. Focus on individual capabilities and potential to innovate. The indicators to assess the intrinsic capacity of individuals such as interdisciplinary skills and knowledge, plasticity (fast learning), openness to experience, tolerance of ambiguity, cognitive ability and styles, intellectual engagement, creative problem-solving, ability to identify patterns, ability to make unusual connections, tendency to constantly question the status quo, capacity to adapt, emotional intelligence and risk-taking attitude. 

Collectively, a highly innovative team is composed of complementary mindsets and skill sets, has inclusive and progressive traits, to embrace the diverse viewpoints and maximize the collective potential.

• Innovation risk management: Digital strategies are changing frequently and innovation in its basic nature is a high-risk area; more often you are doing something that hasn't been done before. The challenge is having a framework that allows you to say when to quit or simply “can do it” for a while. Innovation Risk Management means stepping away from the accepted "best practice" and asking whether a fundamentally different approach would provide more flexibility, more sensitivity, and more responsiveness. 

The primary focus of the risk management would be to identify and control those risks that can be addressed; financing, market understanding, competitor analysis, identifying the space of opportunity, defining the scalability of the products/services, and what timescale to allow before making a go/no-go decision. 

Innovation risk would also broadly need to consider both endogenous and exogenous drivers. From a finance management perspective, consider what capital you are prepared to risk in managing innovation, never let this be so much that losing it will cripple your business, the best judgment or a qualitative approach is given for risk and innovation.

• Innovation measurement: Innovation is a process, which needs to be measured for making continuous improvement. Innovation has a very low success rate; most Innovation Management initiatives are not successful and are incredibly wasteful. The problem is that the measurement in business has so often been predominantly financial in nature. But the leading indicators for successful innovation are not financial. The key is to properly measure their success behaviors and hold them accountable. 

You choose the performance measurement by deciding which are seen as critical to making progress in order to deliver more innovative products or services. The fewer the better, but they have to be credible and relevant in the eyes of the stakeholders. 

Assuming an organization believes that metrics can lead to continuous improvement and enhance innovation effectiveness, it won’t be just a matter of explicitly communicating the intention behind metrics, but a matter of advancing innovation leadership effectiveness and optimizing innovation process and capability.

Innovations in the digital era are coming at a seemingly much faster pace, with changes and potential disruptions. Therefore, Innovation Management needs to establish the framework to manage innovation in a systematic way. The best framework is good because of underlying data and structural elements. There lies the quandary because innovation may not have the data to back it up! Bridging innovation execution gap requires a systematic execution scenario with a fine-tuned framework, clear-defined stages, decision-making parameters, performance thresholds, metrics selections, combined with the iterative learning process and organizational structure that supports wide-ranging exploration at each stage, to pursue a high-mature way for achieving the great business result.

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