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Innovation Urgency: A Framework For Success?

Posted By Paul Tate, September 24, 2013 at 7:40 AM, in Category: The Innovation Enterprise

Today’s speed of business waits for no leader. The stark reality of today’s highly competitive markets is that if you don’t innovate rapidly, effectively and continuously – well, you probably won’t be around very long. Pressure from customers, competitors and stakeholders to deliver innovative new approaches to products, services, processes and business models is now intense.

Mendez.jpgDuring one of the most vibrant sessions at a special Manufacturing Leadership Council event at parent Frost & Sullivan’s recent Growth, Innovation and Leadership (GIL 2013) conference in San Jose earlier this month, Angel Mendez, Cisco’s Senior Vice President of Transformation and a member of the Manufacturing Leadership Council’s Board of Governors, revealed some of his latest insights into how to drive innovation effectively. His message – there’s no time to waste. 

“Right now there isn’t sufficient growth in most industries to put wind in a company’s sails by just focusing on internal business productivity initiatives,” argued Mendez. “The fast moving turbulence of global markets, the short lead-times between new ideas and industrial commoditization, and the continuing explosion of customer demands for innovation excellence make innovation a huge issue today. This is not an intellectual exercise or a thought experiment any more. This is really urgent.”

Perhaps the toughest problem with any innovation initiative is bridging the gap between good ideas and final market deployment. “There many examples of how innovations have failed to materialize because companies simply don't have a real framework to nurture ideas and take them through to commercialized success,” he added.

Mendez believes that by applying a more systematic approach, companies can start to deliver much more effectively on their innovative efforts. Based on benchmarking comparisons of some of the world’s leading innovative companies - including Google, IBM, Apple, Samsung and Microsoft - Mendez has identified some of the common elements and best practices that can help an innovation framework to thrive.

1/ Strategic alignment is key. Good innovators have an innovation strategy that is closely aligned with their business strategy so they can identify compelling goals, set credible objectives, and prioritize investments. This is an essential pre-requisite for any innovation strategy as it drives everything from the processes themselves to the focus of innovative creativity.

2/ Successful idea generation goes beyond internal R&D. New ideas may be the ‘cool factor’ of innovation, but companies need to identify how those good ideas can be best generated, and by whom. There are many ideation models for companies to consider, from the use of incubators, ‘skunkwork’ facilities, and dedicated commando groups, to crowdsourcing and directly involving partners, suppliers and customers so that the whole value chain becomes part of the innovation process.

3/ Companies need to actively and diligently manage their innovation portfolio. “Many companies set up good ideation processes and have lots of great ideas floating around, but then they don’t manage their idea portfolios successfully so they go nowhere,” notes Mendez. A more systematic approach, perhaps under the control of an internal Innovation Council or Committee, can help identify key investment areas and the appropriate development timeframes and horizons for the portfolio. For example:

- what ideas are short term and are aimed at building on current product ideas and market share? In successful innovators, these ideas commonly represent around 70% of the innovation investment and focus, notes Mendez.

- what ideas are mid term and may allow the company to enter new markets and gain additional market share in the future? This often accounts for 20% of the innovation focus.

- what ideas are more long term, radical, game-changing innovations that may take the company into a whole new area of business? These ideas often account for the final 10% of innovation activity.

Depending on whether the ideas are product-related, process-driven or creating new business models, an Innovation Council can also decide on the best way to progress different types of innovations to final commercialization. This may be to buy, build or partner, and involves developing critical scaling and launch strategies to rapidly test, refine and finally deliver market-ready offerings. The Council can also set metrics to help gauge the company's innovation success – whether this is measured by the number of ideas submitted, patents registered, ROI on R&D spend, the number of ideas that turn into products, or by market share growth.

4/ Successful innovators build innovative, collaborative cultures. Underpinning all of the above is the development of a strong and vibrant innovation culture within an organization, often driven by senior-level executive involvement. This involves communicating the competitive urgency of the need for innovative ideas, motivating people and collaborative communities across the value chain, empowering talent with enabling tools to help them collaborate and develop ideas, and establishing targets and reward structures to boost activity and enthusiasm. This may also involve formal training to help hone innovative skills, or even unstructured work time so people are allowed to go off and explore the innovative ideas and developments they’re most passionate about.

In the final analysis, of course, systematic frameworks and processes will not necessarily make your company one of the world’s top innovators. Nevertheless, such best practice insights could significantly help manufacturing companies overcome many of the current obstacles in their innovation pipelines, maximize their investments, and finally see their best new ideas making a real market difference.

How do your innovation processes work? Have you already adopted many of these best practices in your organization? What other approaches have you found that deliver innovative success?

Written by Paul Tate

Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive

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Posted on
Good article Paul, hope many manufactures take note. Our TIM Foundation in partnership with PDMA are launching an international Innovation Management Standard at the PDMA conference in Phoenix, Arizona in late October next month.

The standards detail the requirements needed for organizations to develop their framework (Innovation Management System) based on real situations with manufacturers.
Posted on
Hi David - sounds interesting. We would be delighted to hear more details when this is launched. Paul
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