Tuesday, February 16, 2010

Weaving innovation into the corporate structure

I'll get up and bang on my innovation drum all day, hoping that people will listen to the message.  What's heartening is to find other firms and other people who do the same.  Well, perhaps their drums are a little louder or more in tune, but the songs they are playing are the same.

Accenture has come out recently with a survey entitled Overcoming Barriers to Innovation.  Their subtitle is "emerging roles of the Chief Innovation executive".  The survey looks at what's succeeding, and what's failing, in corporate innovation, and from this work concludes that a "Chief Innovation" executive is required.  While I agree with many of their findings, I'm not sure I'll draw the same conclusions.

The first point that I think is salient in the survey is the reported gap in satisfaction between the CEO and other executives around innovation.  In almost every attribute around innovation, the CEO's reported satisfaction is anywhere from 20 to 30 percentage points higher than mid and senior level management in the same firm.  This result can be caused by one of three factors:
  1. CEOs had a very low expectation of innovation, so any positive outcome is great
  2. Mid/Senior level executives had a higher expectation of innovation than CEOs so their disappointment is evident
  3. CEOs don't have a clear understanding about what innovation is actually happening so they have no reason to be disappointed, yet, while mid/senior level executives understand exactly what is happening and are already disappointed.
In case you weren't sure which factor I felt was most likely, my vote is with number three.  My experience is that CEOs have big expectations about innovation but aren't clear about the commitments and investments necessary, while mid-level and senior executives understand the costs but don't expect much in the way of outcomes.

Another point made was that CEOs must do more than simply create a vision for innovation - the CEOs needs to take ownership and create accountability for innovation execution.  It's not enough to stand on the mountain top and tell Wall Street we're going to innovate, the CEO must put programs in place and hold people accountable to ensure his or her words are backed up by corporate action.

To do that, and this one is near and dear to my heart, since we believe in innovation as a sustainable business process, "companies must treat innovation as any other business discipline by aligning resources, tools and processes with a clear set of performance goals and metrics".  This statement is the difference between talking about innovation and doing innovation.  After all, as we at OVO have said many times, every business organizes around consistent processes.  Processes describe workflows, define roles and responsibilities and ensure a consistent flow of products, services and information.  Well defined and rehearsed processes leave little to chance.  Most current innovation efforts have none of these characteristics and leave everything to chance.

Finally, since many organizations don't have processes and methods for innovation, and aren't clear about how to convert ideas into new products and services, the conversion rate for ideas is low, and the timeframe is long.  In fact the survey goes on to say "organizations need to focus on findings ways to accelerate innovation frequency and speed.  This is a major weakness, which has been identified by the survey, and which could serve as a major source of competitive advantage...".  Note the words frequency and speed.  If innovation is treated as a discrete, occasional project, the frequency is based on how often we kick off the projects, and the speed is dictated by the urgency of the project and the abilities of the team.  If innovation is treated as a core capability, frequency is dictated by how often we spot new opportunities and speed by the knowledge and understanding of the innovation process.  Note one other point that Accenture stuck in there at the end - "a major source of competitive advantage".  Here's another point on which we agree.  Firms that are more adept at innovation than their industry peers gain competitive advantage, driving higher prices, better margins and more market share.

So, what's it going to take to weave innovation into the corporate structure?

  1. Ownership by the CEO
  2. Accountability by senior executives reporting to the CEO
  3. A defined, consistent innovation process adequately resourced and regularly measured
  4. Working consistently to generate ideas and create new products and services, with regular frequency and top speed
You want to know what it takes to be innovative?  There's your information, supported by an Accenture study and OVO's experience.  While Accenture concludes that a Chief Innovation Officer is necessary based on this information, we can look at a number of firms that are innovative and meet these criteria that don't have a "Chief Innovation" officer.  The attributes are more important than the individual, in fact if the attributes don't exist then the individual will fail, as will an innovation focus.
AddThis Social Bookmark Button
posted by Jeffrey Phillips at 11:10 AM

3 Comments:

Anonymous Fiverr clone script said...

Nice post. Thanks for sharing. It was very interesting and meaningful.
Groupon Clone Script| groupon clone| Angry birds clone|

2:46 AM  
Blogger felicity said...

Hello,
This is an awesome blog post found here... Would like to say thanks very much for the share...
home treatments for hemorrhoids

9:00 PM  
Blogger felicity said...

Hello,
This is an awesome blog post found here... Would like to say thanks very much for the share...
home treatments for hemorrhoids

9:00 PM  

Post a Comment

<< Home