Organizational Innovation

Innovation Behavior

Published date: February 15, 2024 в 2:41 pm

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Category: Innovation,Organizational Innovation

Innovation is a skill, not a gift.  Top organizations drive growth by nurturing and investing in innovation as a competency.  One way organizations make it real is by including innovation within formal competency models.

Professor Rodney Rogers of Portland State University defines a competency as a persistent pattern of behavior resulting from a cluster of knowledge, skills, abilities, and motivations.  It is the persistence of those behaviors that matter most and help your organization succeed.

Competency models are a useful way to formalize that behavior and make it persistent.  They help describe the ideal patterns needed for exceptional performance.  They are a blueprint for the type of person needed for a specific job. And they help diagnose and evaluate employee performance.  It takes a lot of work to develop one, but it’s worth it.

My approach is to see innovation competencies at two distinct levels: The Innovator, and The Innovation Leader. Here is how to think about it.

The Innovator Competencies:

  • Generating Innovative Solutions – Systematically innovates using a model with proven efficacy; routinely innovates products, services, processes, and strategies; values and harnesses team diversity; reframes problems in a different light to find fresh approaches; entertains wide-ranging possibilities others may miss; takes advantage of difficult or unusual situations to develop unique approaches and useful solutions.
  • Seeing the Big Picture – Has broad knowledge and perspective; pieces together seemingly unrelated data to identify patterns and trends and to see a bigger picture; understands the pieces of a system as a whole and appreciates the consequences of actions on other parts of the system; possesses a big-picture view of the situation.

The Innovation Leader competencies are different.  It is not necessarily the innovation leader who must generate new ideas; rather, they must understand how to instill innovation according to Penn State researcher, Dr. David G. Gliddon. “Commitment to innovation as a culture is prevalent in organizations as it is commonly woven directly into mission statements. However, leaders still lack the ability to plan, measure and implement innovative programs, products and services.  These challenges are enhanced by the pressure to juggle several different and often conflicting roles.” said Gliddon.  In a three-year study, Gliddon identified the competencies that underpinned these roles and developed a competency model of innovation leaders.  The competency model can be tailored to any organization as part of a competency-based human resource development initiative.

An innovation leader collaboratively interacts with their employees and supports high levels of teamwork, providing opportunities to share innovations.  Once an innovation has been shared, employees should be empowered to then adopt the innovation if it is useful.  Employees can then support the innovation leader by initially adopting the innovation, and encourage the diffusion of the innovation throughout organization’s social system, Gliddon says.  Innovation leaders must also take personal responsibility for and be dedicated to projects that require innovations.  Therefore, innovation leaders must establish a trust culture and maintain relationships based on trust.  They must display initiative, set challenging project goals, and link those goals to the needs of the customer, department, and enterprise, according to his study. Persistent innovation behavior by the leader and innovator is a recipe for growth.

Mapping the Innovation Gap

Published date: December 7, 2023 в 10:48 pm

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Category: Innovation,Organizational Innovation,Strategy

Once you have a systematic and routine way to innovate, you are confronted with a new problem – how to decide how much innovation is enough.  For many, this is an odd question.  If innovation is essential for survival and growth, most people would want all the innovation they can get.  But that is oversimplifying.  Too much innovation can overload the system, confuse the organization, and lead to ideation fatigue.  So how much is enough?

Here is a useful analysis that can tell you how many ideas are needed to reach your specific growth targets called “Mapping the Innovation Gap.” The steps are:

  1. Determine your revenue goals in each year over a specific time horizon. Base this on your firm’s strategic planning time horizon (usually 3 to 10 years depending on the industry).  Use the actual revenue targets from your company’s business plan.
  2. Break these annual revenue targets down over a mix of products, new and existing, in each year. Some firms call this a revenue cascade or revenue waterfall.  It shows for each year how much of the revenue comes from existing products and how much comes from new products.
  3. Estimate your Innovation Yield (number of new ideas needed to produce one new product). This varies by industry and by company depending on factors such as level of investment, core competencies, and access to technology.  Various think tanks and consultancies have estimates such as the curve pictured above.
  4. Estimate your typical idea-to-launch Lead Time (how much time it takes to develop and launch a product once it is conceived). As with the Innovation Yield, this will vary. Take a look at past product development experience and determine an average time (in years).
  5. Plot the number of new ideas needed in each year to produce the necessary new products in subsequent years. Take the number of new products needed in a specific year and divide it by the Innovation Yield.  Then plot this number back in time by the amount of Lead Time to develop ideas.

What you end up with is the number of new ideas that need to be generated each year to have a realistic chance of achieving future revenue growth targets.  It can be a sobering number depending on how aggressive your targets are.  With this number, a general manager can then task the team to “schedule” innovation, and then hold them accountable for generating the necessary number of ideas.

The bottom line:  To grow, companies need a systematic innovation method, and it needs to be applied systematically.

People Innovation

Published date: October 26, 2023 в 10:28 am

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Category: Organizational Innovation,Sustainable Innovation

Human Resource departments often find themselves tasked with creating a more innovative climate for their firms.  That can make sense given that innovation is a people activity.  It’s a skill, not a gift, and it can be taught and learned like any other business skill.  And it is usually team-based.

My advice to HR leaders?  Experience innovation close to home first.  Use innovation tools on actual people or HR systems before venturing out to the broader organization.  This has the effect of making true believers out of the HR team, it gives them a handy reference point for other departments to benchmark, and it yields creative new approaches to traditional HR processes.

How? Using the five templates of Systematic Inventive Thinking, here are examples of pre-inventive forms within the HR realm.  The key is to envision the pre-inventive form, then find a useful role or benefit for it.

SUBTRACTION: Your training programs have no faculty.  Why?  What would be beneficial about it?

TASK UNIFICATION:  Offer letters to new hires have an important additional role during the first year of employment.  What is that role, and how could it help the organization?

MULTIPLICATION:  Employees receive two paychecks each payday, but they are different in some way.  How are they different?  What would be the benefit?

ATTRIBUTE DEPENDENCY:  Year-end bonuses do NOT change based on performance or other factors.  Why?  How could it motivate employees?

DIVISION:  New employees are hired first, THEN recruited into the organization.  How would this work and why would it be useful?

The real trick in using this method correctly is to envision a pre-inventive form that doesn’t seem to make sense at first.  Then, using a cross-functional team, you outline specific benefits that could be derived for the HR department, the company at large, or some other entity.  Ask yourself: Is it feasible?  How could the idea be modified to make it even more beneficial or feasible?

 

Another approach is to use innovation templates on specific employees – create ideas that innovate their life or career.  Here are five more examples of pre-inventive forms at the individual level:

SUBTRACTION: The employee no longer has a budget but still has to accomplish their goals.  Why?  What would be beneficial about it?

TASK UNIFICATION:  The employee’s office space now performs an additional role.  What is that role, and how could it help the organization?

MULTIPLICATION:  The employee has two bosses, but they are different in some way.  How are they different?  What would be the benefit?

ATTRIBUTE DEPENDENCY:  The employee works fewer hours the more she produces.  How would this work?  What would be the benefit?

DIVISION:  The employee no longer works from 8 to 5, but has to work at different times.  Why?   How could this be useful?

Re-invent others by re-inventing yourself first.

Click to read 4 Ways HR Can Cultivate a Successful Culture of Innovation.

Creating an Innovation Community of Practice, part 2

Published date: September 15, 2023 в 12:59 pm

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Category: Innovation,Organizational Innovation

If you are here, it probably means that I’ve convinced you that you should engage with the idea of establishing your Innovation Community of Practice. Part 2 (click for part 1) of our series highlights “top innovation coaches”, their importance in having an active, impactful innovation community of practice, and the way they become key assets in the innovation community over time.

It is not about taking a course; it is about implementing new skills

(almost) Everyone loves to attend training events and courses. Assuming you have a good trainer, you should have a good time. However, an impactful program is not (only) about taking a-training, it is more about getting things done the day after. Conducting a 2/3/5/10-day training is necessary and an important beginning, but it is not enough. It doesn’t cut it. From an organizational perspective, as well as from a personal one, individuals must implement what they learned to generate growth and impact. In other words – innovation training programs, like innovation projects, must integrate an implementation phase, otherwise – it is just an exercise we once engaged in, maybe even a good learning memory.

With everything I know about training, learning, innovation (and some other things), this criteria was very clear to me when I stepped into leading my first innovation training program 7 years ago. It was obvious that I needed to provide more than “just” new knowledge. In fact, the strength of our programs – then and now – depends on engagement, especially in the post-training phase – where we get to see what participants  do (or will not do) once our team is not there 24/7 to train and mentor.

Over time, I started to notice a pattern – when you take a group of smart, talented, capable individuals, and train them to do something useful – they will all take something from the training to their professional (and personal) lives. Yet only some of them will do that in a way that brings true impact to the innovation community, to the organization (and to their career), and bring new ROI to the innovation network. Those are our top innovation coaches, the top runners.

Meet the top runners, your network’s true X-factor  

All iCoaches need to be active, promoting innovation buzz, engagement, new ideas, and small-scale initiatives. We know that they all do it in different ways, and over time – some get more active, and some – less. This is the nature of group behavior and normal statistics, and yet another important reason to consider onboarding your innovation coaches over time, using a cohort system.

Granted that top coaches are active coaches, but to be a true top runner you need something extra – which makes you a key asset to the innovation community. In other words, top runners are active in a way that highlights constant engagement, as well as a strong desire to drive business impact. They are not necessarily the ones who run the most mini-sessions or know all the tools and methodologies, yet they are the ones who bring the most added value to the innovation effort as a whole; they are the ones whom you cannot imagine your community without. It is no wonder that over time the strength of this sub-group – as individuals and as a team – will determine the strength of your innovation community.

What is this X-factor? One of those things that may be a bit difficult to explain in one sentence. It is a unique combination of skills and attributes who differentiates them from others, making sure that they will do something very useful with their learning, and by doing so – become important members in the innovation community. In some cases, top coaches are simple to spot, in others – not as much. To find these candidates, one should try looking for the ones whom you cannot imagine your network without, and the ones whom you always reach out first with every new idea, initiative or challenge, or when you need to think with someone you trust. These are your top runners.

Each innovation community is different, and so are top runners, yet they all share similar aspects and characteristics. After training hundreds of coaches, exploring their activities, what helps them to succeed, and what prohibits their efforts, let’s meet our top runners:

  1. Ben the Connector. Ben knows everyone in the organization, making him the network’s matchmaker – bringing together people, topics, and resources. He takes the time to connect, introduce, and to be introduced in all key teams and functions in the organization, knowing what they are up to, and connecting them to a relevant fellow iCoach to lead a mini-session around a specific topic identified. Ben also takes the time to make sure that topic owners and coaches are connected over time, helping them to follow up with results and ongoing innovation opportunities.
  1. Problem Solver Michael. Mike’s idea of a good day is a day in which a complicated problem was solved, preferably one that others were not able to fully grasp. Mike will always find all the time in the world to explore topics and challenges using different tools and methodologies, as well as his endless curiosity to find out different tracks and tools. People often reach out to him with a topic that others gave up on or are not sure how to address; from time to time, he will even present one of those topics to the iCoaches community, to inspire them to provide him and others with more problems to solve.
  2. Together Tammie. With some time passed since her training, Tammie became all iCoaches best wing-person for every session or activity, making her one of the network’s most active and knowledgeable coaches. Her engagement, experience, and familiarity with all iCoaches makes Tammie a key resource in many exciting initiatives, providing her with a rich pull of success stories and examples as well as an opportunity to make sure coaches meet from time to time – in small groups or as a full team.
  3. “Let’s go for it” Ellen. Ellen has no fear in leading sessions, meetings, pith, or town-hall meetings designed to showcase the network’s progress and business contribution. Ellen has top moderation skills, continually improving as she seeks additional opportunities to engage with teams, topics, and events. It is no wonder that over time Ellen became an important resource in supporting difficult sessions, as well as promoting the network’s overall wow effect.
  4. Melissa’s Management. Melissa masters innovation and organizational skills, to perfectly echo her key role in the organization and manager’s support. This unique combination makes Ellen the best person to engage with senior management and stakeholders when asking for new resources for projects and events, training opportunities for iCoaches and adjacent teams, and dealing with political problems in general. Melissa works closely with the community’s senior sponsor and is considered as one of the architects, responsible for the network’s success.

Top runners are presented here as Personas, these are not real people. Yet, I am confident that some of you will see yourselves in one of those team members, or maybe as a combination of two. Learning what makes an iCoach a top runner is useful for coaches who wish to advance, contribute, and understand how they can add value to their network; and for community leaders – when looking into improving their team’s performance as well as in the nomination phase of new coaches to be.

And what about other iCoaches? Most coaches’ networks, like most groups in general, exhibit a standard spread of motivations, skills, interests, and circumstances. It is very difficult, not to say – unlikely, to have a group in which every iCoach is a top runner. Having said that, some networks – and their senior managers, have been doing better than others in nominating, training, and mentoring their networks – improving their ratio and network strength.

Want to become more like Ellen, Michael or Melissa and master their skills and capabilities? Want to make sure you identify and nurture your top talents? Comment below or write to us directly.

While finalizing this article I was toying with the possibility of designing an innovation community in which every iCoach is a top runner. Not sure if this idea can indeed become a live innovation community of practice, but the more we highlight iCoaches’ nomination process, post-training mentoring and organizational buy-in, the closer we get. What do you think? Could you imagine this dream team in your organization?

Corporate Innovation Strategy Template

Published date: August 31, 2023 в 2:55 pm

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Category: Innovation,Organizational Innovation,Strategy

I keep six honest serving-men (They taught me all I knew); Their names are What and Why and When And How and Where and Who.

          Rudyard Kipling (1902)

 

Here is a simple template to create your company’s innovation strategy:

WHAT:

  • Determine what business lines are to be innovated.
  • Determine what products or services within those business lines need innovation.
  • Establish a portfolio model that compares innovation output from one business line to another.
  • Rank order business lines based on the strength of their innovation portfolio pipelines.

WHY:

  • Determine how much innovation is needed.  Use a tool like Map-the-Gap.
  • Tie innovation to a strategy framework such as The Big Picture.
  • Focus innovation exercises to link directly to the strategy framework.
  • Use the framework to identify market adjacencies.

WHEN:

  • Schedule innovation workshops at the front end of the business cycle to help determine what projects will get funding in the next budget cycle.
  • Schedule innovation workshops after the planning cycle to jump-start new initiatives for the upcoming year.

HOW:

  • Choose specific methods of innovation to be used based on efficacy and results.
  • Combine different methods to leverage the strengths of each.
  • Integrate the methods by using the output of one as inputs for the others.

WHERE:

  • Set aside space with the specific purpose of conducting innovation workshops.

WHO:

  • Form innovation “dream teams” to maximize the success of innovation efforts.
  • Schedule training on how to use innovation methods.
  • Examine the company’s innovation culture to diagnose where it is weak.
  • Establish an innovation competency model.
  • Designate and empower commercial leaders to drive innovation efforts.

Innovation communities of practice – Part 1

Published date: May 31, 2023 в 12:34 pm

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Category: Innovation Facilitation,Organizational Innovation

Innovation Coaches in action

This one is for all our worldwide Innovation Coaches community of practice, their supporting managers, and everyone interested in launching an organizational innovation program.

Nowadays, the term “coach” is widely used for almost any role that has to do with helping others attain or practice new skills, overcome a barrier, or generally improve. Given that innovation has a crucial function in business, strategy, and organizational change processes, it is no surprise that SIT has worked for many years to develop and advance Innovation Networks in which Innovation Coaches take an active role.

Over the last years I’ve spent most of my working hours designing, managing, and leading innovation networks and training programs. With the sustainable innovation approach becoming more and more common, I am often asked under what circumstances an organization should develop inhouse innovation related capabilities. Two recent – very different in scope and style – training cohorts, led me to think about all the innovation coaches I’ve trained, their inspiring success stories, and diverse challenges.

So, in case you never had a chance to collaborate with an iCoach – I hope to convince you that you should; and if you are an active iCoach – this is the moment where you get to kick back, recall how amazing and important the work you do is, and then – share with your friends and colleagues. I am confident that many people in your organization will be happy to learn more about your innovation training, knowledge and activities, and how you can help promote innovation and business impact.

Making room for your innovation community

Innovation coaches help others to innovate in what they do, primarily by driving small-scale innovation activities aimed to generate new ideas, solutions, collaborations, and inspiration which in turn drive business impact. Most organizations we (SIT) advise have adopted our role definition and refer to someone as an innovation coach (iCoach) upon completing our onboarding training and practice. These initial programs make them valued members in the organizational community, as well as part of SIT’s global innovation community of practice.

The idea of defining a new – innovation based – role to individuals is key to designing and rolling out a fruitful organizational innovation strategy. Setting such a mechanism is key to the organization’s ability to nurture and scale innovation efforts alongside its core activities. Strong innovation communities can also enhance additional organizational efforts such as promoting new concepts, ideas, tools, and insights – which many organizations find challenging to implement when merged into their day-to-day tasks.

A community of active innovation coaches is at the core of a meaningful, impactful innovation framework. It is where the top-down and bottom-up strategies come together in the form of ongoing activities providing additional value. Community size will vary based on organization’s size and structure and innovation objectives – from 10 to +1000.

 

What does an innovation coach do?

Innovation coaches are trained to initiate, plan, and moderate internal innovation activities to generate new ideas and solutions in the context of a specific business topic. When designing the coaches training program, we define and adjust the role to reflect the organization and its innovation strategy and capabilities so that in time (and practice) they will be able to meet Return on Innovation (ROI) goals.

SIT’s Innovation Coaches are trained in conducting Mini-Sessions using a structured and systematic method. These sessions in which one or two coaches collaborate with a small group of colleagues to generate new ideas, solutions, and insights to benefit a specific business topic across the innovation process and framework. Active and impactful innovation coaches will usually run around 10 Mini-Sessions a year (and participate and lead additional innovation activities – alone and with their fellow coaches).

 

Who should become an innovation coach?

This is one of the questions I am most frequently asked. Anyone in the organization can innovate and contribute through innovation. Yet iCoaches hold a unique function and therefore their nomination is important on the individual, team, and the organization levels.

 

Here are three useful tips to consider when nominating iCoaches:

  1. Having an active interest and motivation in innovation is a strong indicator to one’s success and activity level over time. The importance of being passionate or interested is true for most endeavors, and it is more so for tasks that require taking initiative, challenging existing practices and mindset, and engaging others.
  2. Active and impactful iCoaches are usually the ones who are “going places” within the organization. They bring in their organizational experience and knowhow to achieve goals yet are not so senior that won’t have the time to take on additional responsibilities.
  3. Having a group of motivated and experienced nominated individuals in your iCoach team is great, but not enough. An effective iCoach team is aligned to the organization’s business functions and echoes its structure and strategy. This way, as a group can form an active, interactive community of practice.

Building your dream team of iCoaches is kind of a combination between science and art. If you are currently engaged in this process, here is my (maybe surprising) advice: look for those people that everyone would like to have in their team, those who are busy yet somehow always take on another interesting and challenging task (or two).

An active innovation coach requires training, mentoring and management support.

In our next post we will share insights about the life of an iCoach. Meanwhile, we invite all our active iCoaches to share their thoughts via email, DM, or comment below.

We know you are here 😊.

HOW BRAINSTORMING AND DESIGN THINKING f-AI-l

Published date: May 25, 2023 в 10:46 am

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Category: Methodology,Organizational Innovation

Automatizing Brainstorming using LLMs can result in plenty of rubbish. If people can create dozens of useless ideas with BS, imagine the sheer volume that can be generated with an LLM. AI can dramatically accelerate innovation, but the challenge is to do so effectively, getting rid of BS and its harmful effects on Design Thinking and innovation.

 

How did Brainstorming and Design Thinking become synonymous with ideation or innovation in spite of their flaws? 

Brainstorming initially played an important role promoting creativity in corporations, as executives received a license to share ideas freely. In the hierarchical culture of those times, this was a revolution. But 70 years later, both users and academic research confirm that it does not lead to novel ideas.

Why, then, do BS and DT continue to dominate the innovation field? Two possible reasons:

1) Both have cool proponents with strong PR (ad agencies and IDEO respectively).

2) Both give the illusion that innovating is easy and fun.

Design Thinking is useful in many aspects and therefore recommended for any innovator. BUT – it is flawed at the core. It consists of three steps:

1) Empathize and define needs

2) Ideate

3) Prototype and Test

DT is therefore a useful collection of tools for harvesting insights, visualizing and prototyping, organized in a sensible 3 (or 5) step process, but, since step 2 relies on BS, it lacks a method to break mental fixedness. Moreover, DT makes the baseless claims that to innovate:

a) One needs to think like a designer, and

b) All you need is to empathize and prototype, and

c) That the best way to innovate is to have fun.

BUT, in reality:

a) Why should designers be a model for rethinking company strategy, a chemical process or a history class? Some innovation, especially product development, has to do with design, but why should all innovation be conducted as if it were a design task?

b) The missing middle – Ideate – requires breaking one’s fixedness. This can be done with structured tools, such as ours, SIT, or other non-Brainstorming methods. Otherwise, old ideas are rehashed.

c) Having fun is nice but does not lead to innovation. Enjoying oneself may enhance persistence, but true innovation is contrary to “having fun”, requiring the pain of changing the way one thinks, and often arising from discontent and discomfort.

Brainstorming and Design Thinking are popular because they have great PR, are easy to use, give the illusion of novelty and are useful for non-innovative tasks. What does work, is a combination of empathic design, visualization, prototyping and experimentation, with a robust methodology for breaking fixedness.

Innovation Stigma

Published date: May 11, 2023 в 5:37 pm

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Category: Innovation,Organizational Innovation

There is an inherent bias against innovation despite the enormous value it holds for organizations.  Corporate executives know that innovation is the only true long term growth engine for their firm.  Yet innovation carries with it a certain stigma, a perception in the minds of executives, that it is “soft” and frivolous compared to other hard core business activities like productivity, quality, and demand generation.  This stigma deters executives from taking risk and investing in serious innovation initiatives.

The innovation industry itself is partly to blame.  Participants in the innovation space tend to perpetuate a mystique about innovation and creativity as though it is a deeply hidden secret that needs to be unleashed.  Walk into many innovation sessions and what you see are cans of Silly StringTM, Slinky(R) toys, Frisbees, and funny nose glasses.  The notion here is that people need to be more playful to have that “eureka” moment and invent the next blockbuster idea.  People are conditioned to believe innovation requires “skunk-works” in a specially-designed room to pursue “white space opportunities.”   Innovation is voodoo.

In an effort to differentiate themselves, participants in the innovation space create novel names for their programs and services.  Here is a very small sample: Innovations-Radar(R), Innovation Cube(R), Challenge AcceleratorTM, 360-IA(R), SpinnovatorTM, Idea BucketTM, AlphaStormingTM, Excursion DeckTM, Mindscan(R), IdeaSpring(R), Super Digilab(R), etc, etc.  The list is overwhelming and it tends to confuse the market.  More importantly, what is the efficacy of these tools?  Do they work?  The granddaddy of them all, Brainstorming, is certainly suspect given the many studies that suggest otherwise.

Is there an innovation bias?  I am polling Fortune 100 executives to describe the characteristics of people who champion certain business causes.  I ask them to describe the typical age, experience, credentials, aspirations, and personality of:

  • Productivity Champions
  • Process Excellence Champions
  • Innovation Champions
  • Leadership Champions
  • Brand Champions

The early feedback suggests innovation champions, compared to the others, are seen as more eager, altruistic “dreamers” who are out of touch with the business.  One executive described innovation champions as necessary but had low expectations of actual results.  Of more concern is the perception executives have about themselves in this role.  My sense is business people shy away from championing innovation because they believe the stigma of failing at innovation is more career-damaging than failing at other ventures.

The innovation industry needs to play a role in improving the image of innovation.  Fortunately, there are resources like Innovation Tools and CREAX that consolidate the innovation space and help companies make sense of the different offerings.  More prominence needs to be given to the classic researchers in innovation and creativity like Ronald Finke, Thomas Ward, Mihaly Csikszentmihalyi, and Jacob Goldenberg.  We need to get back to the basics of what makes innovation work so we can skip the hype.

The innovation bias has to be overcome if companies want to make progress and grow.  Leaders need to address this head on.  How?  Just as they learned to champion leadership by first becoming an authentic leader, they need to champion innovation by first becoming an authentic innovator.

Innovation Under the Threat of a Recession?

Published date: March 9, 2023 в 4:11 pm

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Category: Innovation,Organizational Innovation,Strategy

Cutting budgets of new projects, whether they are under the bucket of “innovation” or not is commonplace in times of economic uncertainty. This phenomenon is quite logical, especially for those classified as “innovation”.  Innovation’s ultimate goal, after all, is to spur growth.  In a period when growth is pretty much out of the question, investment in innovation seems capricious.  Companies need to become more insular, stop the bleeding, cut the “luxuries” they have become accustomed to in times of plenty, and weather the storm.  Not to mention the shareholders breathing down the Board’s neck to show some sort of profit margin.

 

The problem, however, is that these companies are overlooking two essential aspects of innovation.  Firstly, while the output of innovation should always be value-add (usually equivalent to “growth”), innovation should never be applied to issues that are not strategic to the company at that time.  This is one of the ways that many companies inadvertently marginalize innovation: they imply that while the current projects circulating in the company are there to keep margins steady, these extra projects are for growth.  “Innovation projects” are then perceived as nice-to-have additions to one’s everyday work (unless you happen to be the unfortunate one who received the extra work brought on by these projects.  Then they are not-so-nice-to-have).  Thereby, management separates innovation from the core activities of the company and only innovates when the company has excess resources to invest.  Or – even worse – when they panic due to a need to react to a bold competitor move or other market threat.

 

But this is not where innovation efforts should be placed.  Innovation should be applied to tough projects and processes that are already occurring in the organization.  It should be used to improve them – to make them more efficient, more effective, or to leverage them for growth.  Innovation should not be invasive, it should be a tool for getting the most out of what is already happening or what you already have.  It has become somewhat of a slogan for us in recent years: “Don’t do innovation; innovate in what you do”.

 

I doubt that “thinking and acting differently to achieve your goals” becomes irrelevant in times of a recession.  Perhaps the opposite is true?

Interestingly, for those bold enough to resource traditionally-defined innovation efforts, the research shows that this is the time for even more substantial ROI.

Professor Jacob Goldenberg of Columbia University Graduate School of Business pointed out to me that research shows that times of recession are when true change happens in the marketplace.  When the market is strong, the large companies and small companies typically both grow by gaining more customers – but at a rate proportional to their current market share.  When the market is small is when there is an opportunity to convert just a small group of customers from the competitor’s offering, thereby having a greater effect on market share and the balance of power post-recession.  Those smaller companies who had wisely increased their expenditures during a downturn, taking an aggressive approach, are those who were able to come out of the recession market leaders.  This implies that market leaders must take a similar approach simply to ward off their competition and retain their position in the future.

So, is a recession the right time to invest in innovation?  Common wisdom says no.  Then again, innovation isn’t about doing what’s common.

Innovation Follows Strategy

Published date: March 2, 2023 в 12:42 pm

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Category: Innovation,Organizational Innovation,Strategy

Innovation that is done in the context of business strategy tends to be more focused, efficient, and business-model relevant. Innovation should not be viewed as a way to take the organization off its strategic track and in new directions. Rather, innovation should be applied in a way that makes the current strategic track more successful and profitable…true growth.

Yet the tendency is to view this approach as incrementalism and not disruptive enough in the Christensen sense. Some would say that starting with your current situation is not bold and is risk adverse. “We’re not thinking outside the box” is the usual incantation at this point. Instead, there is a preference to chasing “white space” and “open source” innovation as a source of growth. Some executives prefer the lure of white space and opportunity spotting, and they readily acknowledge that it is “low yield by design.” The Scarcity Principle tends to make these opportunities seem more valuable than they really are. White space chasers position themselves as fighting the heroic fight. Resources come pouring in.

The best Fortune 100 companies pursue high yield, organic innovation efforts… not “low-yield-by-design” efforts. High yield innovation comes from tying innovation directly to the strategic marketing context of the firm. Ideas generated this way help the organization stretch its model in a way that is achievable and internally-sellable.

How do you tie innovation to strategy?  Professor Christie Nordhielm from Georgetown University has developed what I consider the best single contribution to marketing thought since the 4P’s. Her Big Picture framework of the marketing management process provides the context for innovating across the entire business model. Applying systematic innovation tools to each aspect of her Big Picture model can yield amazing insights at both the strategic and tactical levels of the business. It is the intersection of these two ideas…Big Picture Strategy and Systematic Inventive Thinking…that will yield consistent, profitable results. Innovation follows strategy…not the other way around.

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