Strategy Driven Innovation

By M. Isi Eromosele

Innovation makes a big difference. But some companies are much more successful in innovating than their industry counterparts. Companies that focus on the innovation with focused management and rigor greatly improve their business performance compared to those that see innovation as something best left to chance.

Innovation excellence means making a clear choice between three sources of value creation and then aligning innovation efforts towards one of those choices.  Each one requires unique approaches to be successful towards building a predictable innovation engine.

The right choice for innovation for value creation depends on the business strategy. Two companies in the same industry can make very different choices.

Successful innovation is not about how much you spend, but why and how you spend it.  In other words, it’s about knowing what kind of value your business is aiming to create and then managing innovation in the most appropriate way given the context in which your business actually operates.

Therefore, innovation must be targeted towards a clearly defined value creation focus:

• Top-Line growth - innovation activities that primarily generate revenue.
• Bottom-Line optimization growth - innovation activities that yield profit.
• Shareholder value growth - innovation activities that increase the value of the
• Company - elements that will increase Net Present Value (NPV).

Unforgiving Markets

Along with productivity and cost control, the imperative to innovate transcends economic cycles and remains constant as the only long-term means of creating and maintaining the value of the enterprise.

Over the last three decades, focus and attention on quality, strategy execution, process automation, etc. have given business leaders strong results in achieving cost containment, process improvement and operational efficiencies, all tools for improving corporate performance.

There is only one roadmap to long-term sustainable value generation - continuous, profitable, top-line growth.  Historically, the market has consistently rewarded profitable companies with higher values than those organizations that achieve their growth primarily through cost-cutting.

Accepting that profitable growth drives shareholder value, the next logical question is: What are the primary drivers for profitable growth?  While the list of growth levers -  addition of product lines, expansion into new markets, acquisitions, strategic alliances and partnerships, joint marketing, among others is certainly large, research indicates that innovation sits at the heart of profitable growth strategies.

Return on Invested Capital (ROIC) is achieved best when an innovation framework is aligned to corporate strategy and when it is enabled with the Voice of The Customer (VoC) every step of the way.

There is a direct correlation between innovation and sustainable growth. Discontinuous growth (the opposite of modest, gradational, ongoing, incremental growth) initiatives represented 14% of total projects but fully 38% of new revenues and 61% of new profits.

Sustainable, profitable growth drives value creation; this principal holds true regardless of economic conditions or legitimate focus on cost containment and productivity in the near term.

Still, relying on growth to justify market values is a high-stakes game. With so much value tied up in the promise of future continued growth, companies cannot afford to lose sight of the growth imperatives; because when they do, or when they miss their growth targets, the punishment by the markets is swift and severe.

Value Creation Through Organic Growth

Why organic growth? The major source of growth in the past has been acquisitions, which often proved a valuable way to complement and consolidate existing offerings and expand into new markets. But many companies are finding an acquisition strategy inadequate to meet growth targets.

There is one substantial difference in acquisition vs. innovation strategies to grow: Acquisitions are an all-or-nothing path since they require the company to commit completely at the time of acquisition.

Innovation and the subsequent organic growth, if done right, allows the company to place smaller bets with similar payoff. While focused acquisitions will always be an important option for increasing market footprint, companies will have to rely on organic growth to a far larger extent to sustain above-average shareholder returns.

Innovation and growth are central to value creation, regardless of economic cycles or the industry. While the absolute size of the growth premium clearly changes as market conditions change, the larger point holds.

Institutionalized Innovation

While sustainable growth through innovation is not optional, it is central to the valuations of large commercial enterprises regardless of economic conditions. While large companies possess resources and capabilities, that give them unique opportunities to innovate, very concrete roadblocks often stand in the way.

The central questions relating to the innovation imperative then, are not whether to

innovate, or even how to, but rather how to institutionalize innovation, especially in a large company environment.           That is how to build a climate and culture of innovation, agility, and entrepreneurship while maintaining standards and controls necessary for ongoing governance.

Innovation Barriers

What must CEOs do to embrace innovation while managing the associated risk and overcoming the barriers?]

The answer lies in developing a clear Innovation Mandate - a strategic statement that describes innovation in the context of your business, the value it promises to generate for growth and disciplined process by which to get there.

The Innovation Mandate must be vividly clear for everyone in your organization; it must be concise to help drive alignment to business unit initiatives and it must help articulate specific employee behaviors necessary at all levels for innovation climate to take root. When designed correctly, it must be clearly linked and driven by your business strategy.

Additionally, keys to become innovative are highly dependent on your ability to address four critical barriers that are incumbent in most organizations.  When not addressed together, the journey towards sustainability and value creation invites a higher risk of failure, potentially minimizing the results of innovation investments.

The first barrier is that most organizations do not have the mindset to harvest ideas and manage those ideas as Venture Capitalists do.   

The amount of “innovation opportunities” available to large companies dwarfs the potential available to small companies. So the myth that only small, nimble businesses can be most agile and innovative is completely false.

New ideas are easy to find in every corporation; it’s the distinctive capability of turning them into commercial ventures that most companies fall short on.

The second barrier is not recognizing and not aligning the  abundance of resources available to large organizations for investment in innovation. Even when overwhelming evidence shows that the companies who invest in innovation consistently outperform their peer groups, why haven’t most organizations taken innovation seriously?

The challenge is not that an organization does not have resources to invest in innovation; rather it’s where to most effectively funnel those resources. Innovation in most organizations is a mandate that cuts across functional areas, making effective resource allocation decisions very difficult.

Resources are available, but the allocation and ownership for innovation is fragmented across most companies.

The third barrier is to recognize the sheer size of the human capital assets that are under-utilized and disengaged from an organization’s creative capacity. The opportunity for most organizations is to dedicate talented teams, focused on harvesting the creative ideas and leadership competencies to build new top-line growth capacity.

Developing a holistic and integrated human capital strategy for innovation is critical because it promotes value creators and rewards them to continue to create value while staying in workable compensation systems.

The fourth barrier relates to the broad product and delivery capabilities that large-scale organizations possess. For example, the typical institution in the financial services industry has gone from handful of delivery channels in the 1980s to literally 15-20 channels (Branches, Direct Mail, Internet, National Sales Force, Business ATMs, Corporate Cards, Affinity Marketing, Wireless, etc.); all the while expanding its product offerings by ten-fold. 

“Anytime, Anywhere” banking has become the price of entry across the industry as providers strive to meet the need of large and diverse customer bases. This has created a huge challenge, since those dedicated assets to serve the wide variety of customers are not fully leveraged for new innovation.

The accomplishment of end-to- end alignment between products, channels, and talent acquisition (employment offers) is the single largest challenge facing large companies today.

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

Copyright Control © 2012 Oseme Group

Innovation As The Key To Business Success

M. Isi Eromosele

In order to not only compete and grow but to survive in a global economy, businesses must innovate. To date innovation has been approached in a piecemeal fashion often linked solely to the new product development process.

Innovation is often about small, incremental changes to products, services and processes. It involves all managers in every department of a company, from Finance to Customer Services. It should be planned and managed as a core business process covering all parts of a business. It needs to be integrated into the business at both strategic and operational levels.

Innovation and Planning

As with all other core business processes innovation needs to be linked to strategy and the business planning process.  Innovation separate to business strategy runs the risk of diverting key resources and damaging the focus of an organization. This syndrome must be avoided at all costs.  Innovation activities must be driven by strategy and current business imperatives.

The extent and type of innovation should be determined by current business performance and future expectations and by an organization’s tolerance to risk.

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.

The Innovation Pipeline

Once innovation, as a concept, has been accepted at a strategic level, the practical implications of having an integrated innovation process or system have to be addressed. An effective starting point is to understand where innovations originate from and how they can be collated and screened.

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 scheme.

The sources of innovation are many and varied but they need to be collated, coordinated and managed as a source of valuable information and are core to the future of an innovative business.

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 innovative 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, for example
• 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 sympathetically. The number and type of ideas should be determined by the performance gap and available resources. 

Many organizations find that 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 a multiplicity of sources. If new ideas and innovations are to make a difference, they must satisfy five basic criteria:

Value - does the idea deliver tangible benefits to your organization? This question 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.  Tangible means that proponents of the idea or innovation will have to estimate or calculate the specific benefits that will arise.

Suitable - is it consistent with your organization’s strategy and the current market environment? This helps eliminate those ideas that are potential distractions that could move the business needlessly away from its core business focus.

If an idea or innovation is not suitable it still may have value, but in other ways - such as outsourcing it under license to third parties or even spinning it off as a separate product within a separate business entity.

Acceptable - will all stakeholders support it? Often innovations fail in large companies because of the not invented here syndrome. 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 - are there sufficient resources and time? Can the innovation be managed within existing budgets or will additional funding be required?  Do new skills need to be

acquired to implement this idea effectively? The answers to these questions will affect the timeline for implementation and the potential return on investment calculation. It is often seen as a reality check.

Enduring - will the idea 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?  Again this 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 process, through structured themed Quarterly Innovation Workshops, 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.

In all cases, ideas and innovations should be driven by market, customer or competitor  insights and progress reviewed on a monthly basis.  A robust project management process is often a prerequisite for effective innovative implementation and communication.

There are a few critical success factors when installing and running an innovation process within your organization:

• A focus on opportunities of high value - and lesser ideas are discarded quickly. This is done through a robust and widely known filtering process using the V-SAFE process, or similar. Active commitment of top management through visible leadership and use of the process by senior management. As soon as an informal process to fast track ideas from senior management is used the innovation process breaks down.
• Build techniques into business processes - the most successful innovation cultures are those where the core innovation process is as natural as all other business processes such as budgeting and planning. Easy to state, difficult to do!
• Develop innovation as a core skill - in all staff and especially in managers.  It can be done and managers can be encouraged to put forward their and their staff’s ideas. Thinking innovatively is a skill that can be acquired.
• Tools to support the application of concepts - using the Internet and some tracking software, ideas can be tracked and innovations planned. You would not think of running any other core business process without a tool or system of some sort, so why should innovation be different?
• Reward people for sharing ideas & knowledge - and this does not just mean a cash bonus. Performance can be improved through good management and a reward system that recognizes group effort and sharing ideas rather than just the individual.

Innovation and People

Research has indicated that one of the most important factors in installing an innovation culture within any company is having leaders and teams with ability and commitment. Senior managers need to understand the strategic direction and how innovation can help. They also need to be able to motivate others.

Creating a culture of continuous innovation requires leadership and commitment from the senior management team.. This is imperative, a necessary prerequisite for success. It also requires agents of innovation and innovation teams across the organization, champions who will assist project managers with the implementation and tracking of ideas, innovations and changes.

If there are no boundaries and structure to the innovation process, staff  confidence is often affected. If there is no method then the chance of success is reduced. Organizations that truly invest in their people and understand the value of their ideas ensure that facilities, equipment, time and resources are organized to help foster ideas and innovations.

This might be, for example, using facilitators to help engender innovation in business meetings or setting aside quiet areas for people to think through ideas or even having informal coffee breaks where people in different departments who would not normally meet or socialize get together for a quick break and to chat.

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. Performance has to be linked to strategy and measures and key performance indicators (KPIs) set.

The frequency of performance measurement is often dependant upon how critical the innovations are to the overall business performance of your organization.

Performance measurement is intimately linked to the innovation platform used by the organization. It should give managers real time information on how innovations are progressing and their performance against the selected KPIs.

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

Copyright Control © 2012 Oseme Group

Innovation As The Key To Business Success And Growth

By M. Isi Eromosele

Innovation is often about small, incremental changes to products, services and processes. It should involve all managers in every department from Finance to Customer Services. It should be planned and managed as a core business process covering all parts of a business. It needs to be integrated into the business at both strategic and operational levels.

Innovation + Strategy Planning

As with all other core business processes innovation needs to be linked to strategy and the business planning process.  Innovation separate from business strategy runs the risk of diverting key resources and damaging the focus of an organization. This must be avoided at all costs.  Innovation activities must be driven by strategy and current business imperatives.

The extent and type of innovation should be determined by current business performance and future expectations and by an organization’s tolerance to risk.

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.

Creating An Innovation Pipeline

Once innovation, as a concept, has been accepted at a strategic level, the practical implications of having an integrated innovation process or system have to be addressed. An effective starting point is to understand from where innovations originate and how they can be collated and screened.

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 scheme’.

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, for example
• 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 sympathetically. The number and type of ideas will be determined by the performance gap and available resources.

Many organizations find that 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, Suitable, Acceptable, Feasible and Enduring.

Value

Does the idea deliver tangible benefits to the organization? This question 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

Is it consistent with strategy and the current situation? This helps eliminate those ideas that are potential distractions and move the business needlessly away from its core business focus.

Acceptable

Will all stakeholders support it? 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.

Feasible

Are there sufficient resources and time? Can the innovation be managed within existing budgets or will additional funding be required?  Do new skills need to be acquired to implement this idea effectively?

Enduring

Will the idea 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? 

Implementing Innovation

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.

In all cases, ideas and innovations should be driven by market, customer or competitor insights and progress reviewed on a monthly basis.  A robust project management process is often a prerequisite for effective implementation and communication.

If there are no boundaries and structure to the innovation process, then staff confidence is often affected. If there is no method, then the chance of success is reduced. Organizations that truly invest in their people and understand the value of their ideas ensure that facilities, equipment, time and resources are organized to help foster ideas and innovations.

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

Copyright Control © 2012 Oseme Group

Innovation As An End-to-End Process

By M. Isi Eromosele

Innovation is value-creating process. It must be new, but it should also create value for the business. The key is for a company to leverage its capability at all levels within the organization and to increase the speed and scope of idea generation and transformation into marketable products that result in new business value.

Unless an innovative idea for a product, service or business model is carried through to the customer, it will fail to generate cash or other value for the enterprise. It is therefore a process, rather than an activity.

The rise of open collaboration cultures at companies such as Apple, Amazon and Starbucks has begun to create awareness of innovation as a process that starts with ideas. Many companies are now making good use of feedbacks from their customers and suppliers to broaden the source of ideas for enhancements to existing products or entirely new products.

In the journey of creative and successful innovation, ideas, whether incremental or radical are just the beginning and they need to move from discovery to impact on the business. Managing a set of ideas beyond discovery through logical phases of incubation, acceleration, and scaling are the execution steps upon which most companies falter.

The following summarizes the key activities in each phase:

Discovery phase - The primary purpose here is the exploration, identification, ideation, screening, and selection of ideas to determine feasibility and create a proof of concept. A key problem is to generate a constant flow of ideas. Driven by open innovation paradigms, the sources of ideas increasingly include customers, suppliers, partners and other external organizations or individuals. This open collaboration model has become a best practice among innovation leaders.

Incubation phase - This phase eliminates technical risk by creating working prototypes and pilots and explores additional ideas regarding the value proposition among buyers, users and beneficiaries. Companies that do not address problems in this phase are unlikely to advance innovations beyond discovery. The prototypes and pilots provide the basis for conducting additional product and market research to develop a robust business plan for the innovations needed to advance to the acceleration phase.

Acceleration phase - This phase eliminates the initial commercial risk by demonstrating that there is a meaningful market among various target segments. As such, this phase requires a large commitment of resources and time. As such, problems related to commercialization of a product, process or services are solved here. The team applies more formal structures and practices to ensure greater discipline, yet remains flexible enough to exercise agility in adapting the product, process or service to the market’s needs.

Scale phase - In this phase, the primary problem to address or the risk to manage is the size of the market opportunity. The result of the acceleration phase will now be fully established as a core product or service offering.

Challenges and risks facing an innovation don’t stop if their nature changes during different phases of the life cycle. All great ideas sourced in the discovery phase will encounter numerous execution challenges in all phases or problems that need solutions, for which structured problem solving can deliver dramatically better results.

It is important to note that only a fraction of ideas move through the full life cycle, not all ideas can overcome all challenges and risks encountered during their development. As few as one in a hundred seemingly great ideas may eventually succeed and become a commercial offering.

Built into disciplined problem solving are mechanisms to drop ideas when core problems have been exhaustively examined for solutions, which should be done as early as possible in the life cycle.

This approach is often referred to as a fail fast strategy, so that only the most promising ideas move forward. Organizations also learn from failure. Fast, frequent, frugal failure decreases the learning cycle time and allows organizations to come up with better ideas faster in the future.

Enterprises should treat innovation as an end-to-end process from idea to value creation, and each problem faced in this process as an opportunity to invent a solution that moves the process forward. In many cases, the problem/invention challenge identifies and clarifies the real opportunities for sustainable competitive advantage.

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

Copyright Control © 2011 Oseme Group

Disciplined Innovation In Corporate Development

By M. Isi Eromosele

While innovation can be groundbreaking, it is more often incremental improvement of existing practices underpinned by evolving technologies that transforms the way a company does business.

Innovation is hard. It is one of the business activities that does not benefit from economies of scale. Large businesses are no better at it than small ones and, in fact, are often worse. But the notion that only brilliant individuals create all extraordinary innovations is a myth. Implicit in the myth is the idea that innovation is beyond the reach of an organization’s process improvement and discipline, and is resistant to management influence.

Innovation is highly desired by CEOs in virtually any industry. In the past, they might have focused on growing market share to drive growth. Now, they increasingly are focusing on innovation in new products and services in a highly competitive global market.

Problem solving is crucial to innovation. Problems are what inspire innovators to look for answers. Problems often surface as pressure, such as loss of market share, decline in profitability, dissatisfied customers, and others. Natural innovators are good at defining the problems; they often see problems that others do not.

Almost all innovation involves the application of a known solution to a problem or part of a problem from one domain that also applies to a different domain. A culture of open collaboration, as a source of ideas that address design problems, succeeds because it exposes the challenge to a large number of people from different knowledge domains. This increases the likelihood that someone will intuit what the problem has in common with a solution outside the domain.

The combination of these two themes reveals how enterprises can recast invention challenges into problem-solving tasks. Thinking about the invention challenge as problem solving task and using patterns and principles that already exist greatly simplifies the invention task and transforms it into a process of knowledge search and pattern recognition. In the transformed invention task, process orientation and technology will play a bigger role.

This problem-solving approach typically involves four steps, as follows below

• Understand and specify the precise functional problem that needs to be solved - anything from an operations or market issue to a business model challenge. For example, despite the existence of many search engines, Google’s Larry Page understood and focused specifically on the problem of relevance in search results.
• Abstract the specific problem to a general principle so it can be mapped to a generic version of the problem. Rather than seeing the problem of poor search results as unique to the Web, Larry Page saw it as a general ranking problem, which he then mapped to other domains.
• Identify generic solutions to the generic problem to generate candidate solutions or approaches to the specific problem. This activity often means a creative mix and match of partial solutions to parts of the problem. The domain of academic literature and how it ranks the popularity of research led to the insight that Web links could serve a similar purpose.
• Translate the generic solutions into specific solutions to the specific problem and thereby invent a new approach. In Google’s case, this was the page rank algorithm.

Without a system or discipline, such problem solving will not sustain cohesiveness. If an organization can have a disciplined culture to make it happen more often, with more people, to yield more productive outcomes, then the organization would have higher innovation performance.

If this approach to problem solving, invention, and innovation is so powerful, so well specified, and so developed, where has it been all this time? One challenge is that most enterprises view innovative problem solving as a disjointed activity, limited to the R&D and product development departments.

Clearly, if enterprises start to look at innovation as an end-to-end process, they could improve their innovative performance. This means marketing, product management, sales, customer support, strategy, IT, and even human resources need to incorporate creative problem solving in their daily jobs, supported by a disciplined and technologically advanced infrastructure.

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

Copyright Control © 2012 Oseme Group

Innovation - The Critical Driver of Business Growth

By M. Isi Eromosele

In the current highly competitive global marketplace, an organization’s ability to innovate has become an increasingly crucial brand differentiator. Organizations need to recognize the competitive importance of innovation and implicitly recognize that. For innovation to be a truly growth strategy, it must be approached as a strategic business initiative, with a focus on achievement. As such, before an organization implements a wholesome innovation strategy, they must define innovation within the context of its business goals. The following factors need to be considered:

• Is the primary purpose of innovation to create new products, new markets or better ways of relating to customers? What business gains would the organization realize from the soon to be implemented innovation strategy?
• Which employee groups are most vital to the implementation of the innovation strategy? As an example, if the creation of new markets is the goal, sales and marketing would be crucial to its success
• Is the innovation strategy expected to be incremental or wholesome?
• How would this innovations strategy affect the corporate culture of the organization?

A corporate culture that does not fundamentally sustain work progress and behaviors that encourages innovation will ensure that such strategy will fail. The success of an innovation strategy is not a function of financial investment, but really depends on the quality of the organization’s innovation processes. To succeed, innovation efforts must be aligned with the organization’s business strategy and its organizational  systems and structure. Innovation cannot succeed if it is attempted in a vacuum. It must be an integral part of the organization’s overall business strategy. It must be an integral part of how the organization operates. .

Creating A Culture Of Innovation

There are a number of levers companies can pull to drive innovation within their corporate culture. These levers can be grouped into the following categories:

Technology – What changes in product or underpinning technologies can be made to provide new or unmet customer needs?

Process – Which processional activities need to be changed to increase the efficiency of the creation of new products and their effectiveness?

Structure – What changes are needed organizationally to increase innovation within the company?

People – How does the company align the decisions and behaviors of innovation critical talent with other employees to create a hybrid culture that drives the concept of innovation?

Every organization has multi-faceted processes and levers it can use to drive innovation-focused decision making and behavior. Interestingly, these levers are hardly exploited to their potential as operational and management tools.

Performance Management

Focus specific lines of business on achieving growth targets that are significant stretch, while placing secondary considerations on profit making. This will force business unit management to aggressively pursue innovation in order to accomplish the growth targets. As part of the budgeting process, an organization could conduct annual meetings with the leaders of each business unit, challenging them to identify additional growth opportunities through innovation.

Roles/Career Progression

In identifying roles that can serve as innovation champions, organizations can capitalize on the sharing of best practices and avoid duplicative efforts. As an example, employees in a particular department could be designated as such champions and explicitly tasked with both leveraging best practices from other parts of the organization to improve the performance of the department.

Business Literacy

By educating managers, supervisors and employees o how innovation drives business performance, they can better appreciate the economic impact of such innovation, understand how employees in different roles can drive innovation and learn how they  may contribute individually and collectively.

Innovation is the perfect antidote for companies struggling for growth. Companies that can put innovation on the same economic footing as other strategies through a value-driver framework will have greater success realizing its full potential.

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

Copyright Control © 2011 Oseme Group