Monday, December 12, 2011

Bridging the gap between ideas and products

It's time to assess where things stand from an innovation perspective.  Clearly it won't be news to alert you to the fact that the vast majority of CEOs report that innovation is very important for the success of their businesses.  Increasing competition, from a wide range of countries and geographies, increasing customer expectations, rapidly shifting business models, new entrants and a host of other governmental, financial and demographic shifts mean that innovation is no longer a "nice to have" but a must-have for ongoing success.  Firms that have spent the last two decades right-sizing, outsourcing, cutting costs, getting "lean", implementing Six Sigma and a host of other management tools are rapidly realizing that you simply can't cut your way to growth and differentiation.

The economic conditions in the global market suggest that smart firms will hunker down, save their ammunition in order to fight another day once consumer demand returns.  This approach seems reasonable from behind the confines of the ivory towers built in many large, complacent organizations.  Meanwhile,  emerging new entrants are developing interesting, valuable products and services and learning to compete in this environment while established players simply hunker down.  Right now, as the first "green shoots" of economic growth are becoming visible, is the time to develop the skills and capabilities to improve innovation processes and disciplines within your firm and build innovation networks to spot and adopt great ideas that exist outside your firm.  The real question becomes - what are the critical skills necessary to thrive in an environment where innovation becomes a critical success factor.

In many organizations, good ideas are a dime a dozen.  In fact one could argue that there are too many ideas about too many different priorities.  Executives must do a better job of defining important corporate goals that innovation should support.  Once fewer but better ideas are generated, the real work begins:  spotting ideas that have the best chance to become disruptive products and services and moving those ideas through the decision points and approvals to become a new product or service.  This is the key innovation problem that all firms face.  There is a yawning gap between idea generation and product commercialization.

This problem can be addressed in one of two methods.  First, we can train innovation experts who understand innovation challenges and goals, and are very experienced in every phase of an innovation effort.  These individuals will work above the existing business as usual processes and will have the opportunity to supersede existing products, services and processes.  The challenge with this approach is that very few people possess the knowledge, skills, breath of insight, thick skin and simple desire to help ideas accelerate through the barriers that they must clear to become new products or services.  In this model, the necessary skills to succeed include excellent vision, the ability to spot promising ideas, the strength to champion an idea over a long period of time against significant odds and the ability to attract funding to the ideas they favor.  Few people possess all of these skills and can survive and thrive in existing corporate environments.

The other model is to develop an innovation process which defines how ideas should be recognized, developed, evaluated and converted into products and services.  These roles are filled by many people throughout the organization rather than one "champion" trying to do all of the work.  This innovation process ensures that more people are involved which brings more skills and insights into the process.  The process should be funded on an annual basis, so searching for funds should be less of an issue than in the "champion" model.  Since the process is dominant, rather than the ideas or champions, there's less chance of exhaustion or frustration of any one individual.  In this model it is important that a broad range of people gain skills in each of the critical steps and phases of the innovation process.  In this regard many people can fill the roles necessary to improve ideas and move them through the innovation process.

So, if you choose to follow the "champion" model, you should be recruiting a few people with a very broad range of skills who can spot great ideas, develop the funding and approval models and move them rapidly to new products.  You'll need to constantly recruit these people, as they will burn out rather rapidly and will be hard to find and hard to replace.  Most of the innovation effort will be centered on these individuals.  They will be unlike your typical recruits.

If you choose to create a systematic model for innovation, then the skills you need have far more to do with defining and improving innovation processes.  There may be a bias to simply apply your deep lean and Six Sigma skills to innovation efforts.  They can help with defining a process and improving the process, but the vision and perspective for innovation is far different.  Ensure you set big goals, including differentiation and organic growth as the targets for your innovation process, otherwise a bias toward process perfection may lead to incremental ideas.

The first model is about finding a few PEOPLE in whom your innovation potential rests.  The second model is about defining an innovation PROCESS, which is less reliant on any small group of people.  In the end it really doesn't matter which model you choose.  The real choice is in whether or not to consider innovation as a key capability or discipline.  That choice, and the investments to bring the choice to reality, are what will matter. 
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posted by Jeffrey Phillips at 5:12 AM


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