Integrated Approach to Managing Business Innovation

In order to survive, compete and grow in a global economy, businesses must innovate.

Innovation is often about small, incremental changes to products, services and processes. It involves all managers in every department from Finance to Customer Service. It should be planned and managed as a core business process covering all parts of an enterprise.

It needs to be integrated into the business at both strategic and operational levels. It is the core business skill, the heart of the business.

Planning and Innovation

Innovation needs to be aligned with strategy and the business planning process.  Innovation activities must be driven by strategy and current business imperatives. The extent and type of innovation you practice should be determined by current business performance and future expectations and by your organization’s tolerance for risk.

For organizations heavily involved in process improvement, product development and market development, they can probably innovate to a greater degree with existing resources and skills.  New product ideas tend to be focused on extending the existing range of products rather than being truly innovative.

In situations where a business must address a key issue or crisis, new capabilities and resources might be necessary. A company breaking into a new market with its current product range might need to acquire new manufacturing or sales capabilities.

For truly innovative strategies, in areas such New Business Development and Strategic Change, the acquisition of new resources, capabilities, ideas and possibly even leadership could be necessary.

How far innovation is integrated with a business’ strategy is also dependant upon a business’ appetite for risk and its risk profile. Differing types of innovation strategies and projects have different risks. A balanced portfolio of innovation projects should be adopted when assessing the risk factors involved and the numbers of ideas or innovations being managed at any one time.

Innovations and ideas can come from any part of an organization. It is not the preserve of the R&D department or Marketing. Nor is it merely limited to an employee or customer suggestion program.

A successful innovation culture embraces all aspects of a business and should be managed as effectively and efficiently as any other core business process. To that end, successful innovation companies operate an ‘Innovation Hub’ where all ideas and innovations are collated and coordinated.

Creative processes and analysis can be used to stimulate new ideas in four basic areas:

• Business Innovation - new business or supply chain models
• Product or Service Innovation - new or modified products or ways of providing a service
• Market Innovation - opening a new market or creating a new customer base
• Process Innovation - improving or changing internal processes

Ideas should be effectively screened and ‘bad’ ideas killed off quickly but sensitively. The number and type of ideas will be determined by the ‘performance gap’ and available resources. 

An effective screening or filtering process prevents ‘innovation overload’ whereby a company is almost paralyzed by the sheer volume of innovations and ideas generated from the multiplicity of sources previously mentioned. If new ideas and innovations are to make a difference, they must satisfy five basic criteria.

Value - The idea must deliver tangible benefits to the organization. This helps eliminate those ideas and innovations that are good in principle but add little or no value to the bottom line, now or in the future.

Suitable - It consistent with business strategy and the current marketplace environment. This helps eliminate those ideas that are potential distractions and move the business needlessly away from its core business focus.

Acceptable - It is crucial that proponents of an idea or innovation spend time and effort on selling the idea internally and gauging the level of support for it. This is often overlooked and failures are often attributed to ‘office politics’. Stakeholders are an internal barrier that must be negotiated as if they were a formal process.

Feasible - The innovation must be managed within existing budgets additional funding provided as required.  New skills must be acquired to implement this idea effectively. The above will affect the timeline for implementation and the potential return on investment calculation. It is often seen as a reality check.

Enduring - The idea must deliver value in both the long and short term. If a new idea or innovation is to be truly strategic will it survive the rigors of time? Is the long term gain worth the short term pain of bringing a new idea to market?  This also highlights the return on the investment to be made.

The Innovation Process

Innovation should be built into business routines at three distinct levels - at the Annual Business Planning (ABP) process, through structured themed Quarterly Innovation Workshops (QIWs), and ad hoc day to day activities. 

Some of the routines are ‘proactive’ by nature, a conscious focus on bringing ideas and concepts forward into the innovation process such as ABP meetings and QIWs. Some routines are passive or reactive, such as creating a culture of innovation where day to day activities and management seek to enable innovations to flourish.

Ideas and innovations should be driven by market, customer or competitor insights (MCIs) and progress reviewed on a monthly basis.  A robust project management process is often a prerequisite for effective implementation and communication.

Set up an ideas market culture by which heads of business units or departments have established budgets for innovations and get together to fund ideas, irrespective of where they originated; this is an internal market for ideas, innovations and people. Getting to this point may take a major culture change and is unlikely to be a quick fix.

Innovation And Performance

Creating an innovation process and installing an innovation culture must be managed and measured on an ongoing basis. Monthly and weekly meetings should focus on the progress and performance of both new ideas and the implementation projects.

Issues should have a process by which they are escalated and associated risks managed where appropriate. The performance of the innovation process and the issues raised should drive and inform the next planning process and review of strategy.

The frequency of performance measurement is often dependant upon how critical the innovations are to the overall business performance. Performance measurement is intimately linked to the innovation Platform used by the organization.

A clear business strategy that integrates innovation appropriately at its very heart combined with effective and efficient operations which allow innovation to flourish will stand a greater chance of succeeding.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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