We quite often talk about companies which fail due to the lack of innovation, but we rarely talk about innovation programs which fail. And it is quite surprising given three facts:1- A recent BCG survey highlighted the fact innovation is among top three priorities of 75% CEOs interviewed. 2- Lots of academic research papers showing the positive correlation between Innovation Efficiency and offer price in IPOs. 3- Innovation is one of the most common pillar for external and internal positioning of many enterprises today. In other words, innovation is a top priority for many, many enterprises already communicate how innovative they are, its positive impact on financials is clear, But it is also very clear that there many cases where innovation didn’t deliver its intended ROI. So what are the reasons?
A first attempt is to go and define what it means for a business to be innovative. For example, to answer this question; Gartner developed the Innovation Management Maturity Model and assessment with the six dimensions of innovation management: Strategy and Intent; Processes and Practices; Culture and People; Organization and Infrastructure; Partnerships and Open Innovation; Innovating How We Innovate. Especially the last dimension (Innovating how we innovate) is extremely critical as the super-accelerated change in technology brings the need for enterprises to continuously & consistently innovate to stay relevant. As Omar Abbosh states in his book “Pivot to the Future”: “Disruption is no longer a once-in-a-career problem to be dealt with. It is a constant cycle. In every industry, an expanding trapped value gap between what is possible and what is available is appearing and reappearing with greater frequency”.
Here is my top 10 list to ensure that businesses can to consistently and continuously innovate and deliver the ROI of their innovation programs:
- The enterprise has a clear innovation strategy which is aligned with its higher level long term business strategy. This innovation strategy is driven with a formal innovation program with executive level sponsorship and leadership.
- The enterprise has cultivated a culture that encourages innovation, an environment that nurtures innovation projects and values that reflect a willingness to change.
- The enterprise has established the necessary roles, responsibilities, structures and relationships, within the organization and with outside partners.
- The enterprise has implemented appropriate processes and performance metrics and is using and managing these effectively.
- The enterprise has secured the funding it needs for its innovation program with a budget management process defined- with appropriate external investment mechanisms in place in case leveraging external investments too.
- The enterprise, beyond funding, secured other critical resources including training, tools, mentors, market intelligence and connections across an external network and ecosystem of business partners.
- The enterprise gas implemented the necessary mechanisms of engagement required to engage its employees in the innovation program. The enterprise also uses fair and effective incentives, rewards, and recognition for both individual contributor and teams who make a strong impact
- The enterprise is leveraging both internal and external communications to promote its innovation program internally and its brand externally.
- The enterprise is managing people side of the change with a formal change management program; moving their individual contributors and managers in their journey from awareness to desire to knowledge and ability to make innovation program successful and sustained
- The enterprise has realized and continues to realize ongoing results and outcomes from its innovation program that are having a real, demonstrable, and measurable positive impact on the business, feeding to the positive feedback circle.
“Despite prolific investments, most companies are just tinkering around the edges of innovation, unable to achieve any fundamental changes to their business”, wrote Omar Abbosh. To achieve the business impact and ROI of innovation, these 10 are the required items of any successful innovation strategy and execution in my perspective. And these need to be repeated and repeated again consistently and continuously to renew and reinvent the core of the business.