Tuesday, November 03, 2015

"T" time for innovation

Lately I've worked with or encountered a number of corporate clients who are trying desperately to innovate.  Their executives and management teams recognize the importance of innovation, and even include innovation as top three priorities or as a component of the annual strategy.  What's worse, unlike in the past, executives are starting to demand action on innovation, rather than simply use it as a speaking point or throw-away line.  So, mid and senior level managers are starting to wonder, how, exactly, can we "do" innovation and keep the everyday activities and "business as usual" processes running effectively?  Especially in an organization where the vast majority of people are already working 50 hours a week, and spend the majority of that time in back to back meetings.

I've written before but it bears repeating, innovation, that is, thinking up, designing and creating something new and different that drives value for customers, isn't going to happen in your day to day business as usual environment.  The efficient, effective environment isn't a good development platform for new thinking and new ideas.  It isn't designed or constructed to conduct discovery of new ideas.  Your existing product or service development programs are likely overworked and will reject ideas or solutions that require new capabilities.  In short, your day to day business as usual processes aren't going to welcome innovation work.  But I digress, since in your gut you know this already anyway.  We just both had to acknowledge it before we can move on to the real ideas.

Three internal innovation options
Once you've accepted that your day to day business as usual process, culture, reward structure, etc isn't going to accommodate innovation, you have three options:  force innovation to work within the existing confines and hope for the best, or design and develop a parallel system of innovation activities that embraces the processes, tools and thinking that good innovation requires, or adapt your existing business as usual models and processes to welcome more disruptive ideas and activities.  Of course there are other ways to get ideas, primarily from third parties or by acquiring intellectual property, and those are right for some situations and conditions, but this option is relevant only part of the time.

Working within existing confines

Let's be honest - we know what happens in this case because this is what most organizations try to do.  They want to learn new innovation tools but want to manage innovation within the comfortable confines and predictable outcomes of existing business as usual processes.  What this leads to is "me too" innovation, where the innovations are indistinguishable from existing products.  We already know this doesn't work, we already know the outcomes because most of us have seen this play before.

Parallel Systems

Perhaps the fastest way for an organization to do more innovation is to design and implement a team or process that works in parallel with the existing business as usual processes but isn't hampered by the existing constraints.  However, this typically means adding new people, learning new processes and the uncomfortable reality of two teams aiming at the same markets, one incremental and sustaining in nature, another disruptive and creative in nature, almost always at conflict, with two different goals or purposes.  The first team wants to sustain existing products and profits and not ruffle feathers.  The second wants to disrupt the market and shift business models, growing share and profits without regard to existing customers or expectations.  This model, when tried, almost always results in a collapse of the innovation team, but it is rarely tried since it requires so many additional resources.

Adapting existing Models and Processes

If you are going to do "in house" innovation consistently, I'll continue to argue that the most effective way to do that is to create an ambidextrous process that is scalable enough to manage day to day efficient processes effectively and to manage larger, disruptive ideas simultaneously.  Your people have the ability to manage both efficiency and innovation, and you don't need two disparate teams with wildly different foci.  You need one really good and agile team able to do both incremental and disruptive work.  But this requires a shift in talent and thinking, introducing and bringing us back to the "T" time of the title.  Because to adequately manage two different methods or processes within one team, you'll need:

Time - time to do the "business as usual" stuff and time to do the innovation stuff. Right now, in the absence of any direction or balancing of duties, all of a person's time is given over to efficiency and current products and processes.  You simply cannot do good innovation without giving people time to think, discover, investigate ideas and develop the ideas.  Employee time is your company's most valuable asset.  How is it being used to help drive future revenues?

Talent - you'll want to consider who is part of the product concept, product development and product realization team, and consider it an end to end capability. Today the "front end" is artificially divorced from the "execution" engine, when they should be firmly fused if not iterative.  The talent for the team needs to embrace people who are discoverers and ideators as well as people who are execution oriented.

Traction - there is so much embedded inertia and intellectual and psychological barrier to innovation that without a lot of momentum and traction, innovation isn't going to get done.  We create traction by demonstrating how important innovation is, by demonstrating a definitive plan of action, by funding innovation, by measuring it and by rewarding results.  Without traction, it's much easier to simply revert to the frictionless world of efficiency.

Training - Developing an end to end process that incorporates divergent thinking, exploration and ideation with product management, development and execution is going to require developing new skills and introducing new tools.  There are a lot of product development and execution tools that can actually accelerate this, including ideas like Agile, Lean, MVP and so forth. But these need to be balanced with divergent thinking, exploration, discovery and insight to customer need.  Blending these skills isn't impossible, but will be difficult until you see them all as piece of one greater capability.

Transparency - Product development and product execution are transparent.  We have very specific ways of measuring the development cycle (Stage Gate/Agile) and the commercialization (revenue, profits).  The Front End of the product cycle however is exceptionally murky.  We need as much transparency, commitment, communication and clear strategy in the front end as exists in the "back end".

One other item to notice:  while blending innovation into your product concept to product commercialization process can be challenging, it doesn't have to be expensive.  Good innovation can be done inexpensively, and in many cases has an exceptional return on investment when done well.  And yes I've described it as product concept to product commercialization, but you are free to change the word "product" to "service" or "business model" and the same still holds true.

In the end there are three ways to innovate:  buy intellectual property from someone else, have a design firm or consulting firm generate and develop ideas for you, or develop the capacity for innovation in house.  It's reasonable to consider all three options, and sometimes one may be a better solution than another, given circumstances.  But all three are important and you need to consider how to build an in-house capability.  To do that successfully, think about innovation as simply another phase of product or service development, tightly linked to development and commercialization.  Then think about how to manage innovation and day to day operations within one framework, using the five "Ts" I've described here.
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posted by Jeffrey Phillips at 7:02 AM


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