Thursday, March 09, 2006

Working from the instruction manual

This is great! There's an actual discussion online about innovation and what's necessary to support and nurture innovation in a firm. Well, it's a discussion between two people at least.

Greg Eisnach at Grassroots innovation posted a short response to my "Making it up as we go along" post. My post indicated my firm belief that innovation is the only business function which lacks a defined methodology and process. Purchasing and Inventory control folks have APICS. Financial teams have GAAP. Quality teams have Six Sigma. CRM and Sales have several sales methodologies. What's innovation got? I will still argue that innovation teams have very little defined methodology or process to help move an idea from its conception to its release as a product or service or business model.

But Greg rightly points out that I don't become Charlie Trotter by buying his cook book. I can become a better chef by using a cookbook from the best chefs in the world, but that by itself does not make my food taste significantly better. I also need:

- the best ingredients
- the right tools
- the desire and time to cook the food correctly

Greg points out that Six Sigma demonstrates a process for quality, but engineers and people on the shop floor of most manufacturers knew they could build products with higher quality, they just didn't believe it was what management wanted. To a great extent, I concur. The documentation of the process alone is not nearly enough. We've got to have the right ingredients, the right tools and the right motivations.

Let's look at innovation in that light. Do senior management teams express interest in innovation? Unfailingly, yes. Several studies by management consulting firms all agree that over 66% of CEOs interviewed identify innovation as a top priority. So, at least at the senior management level, we've got the focus and the interest.

Do we have the right ingredients? Most people I talk to within firms that are trying to become more innovative say they have too many ideas. I think that's true, but I also think they have a lot of poor ideas and few really good ones. There's definitely a problem when "no idea is a bad idea". What most firms need is not more ideas but better ones. Better ideas come from clear guidance about what's important and where the firm is heading - so encouragement and direction from senior management, coupled with creative minds and talents.

OK, if the management team is willing and we have some of the ingredients, do we have the tools and processes necessary to move beyond merely generating ideas? Can we actually implement these ideas and create new products or services in a sustainable fashion? The truth of the matter is, no. Most firms create new products and services through sheer force of will and heroic actions by individuals rather than through any well defined, well implemented process or tools.

To use the quality analogy - I agree that people on the shop floor knew some of the problems with the quality of the products they were making, but anecdotal evidence and suspicion never satisfies a manager. Six Sigma gave those folks the ability to set goals and measure results and prove out theories. To badly mangle a line from A Few Good Men "It doesn't matter what I believe. It only matters what I can prove." In the end, the folks on the line make actuators or washing machines. They make them with a 10% rejection rate or a 1% rejection rate, but they are still making the same things.

When we ask teams to become more innovative, we ask them to step into a function has has a much higher failure level than anything they've done before. Innovation is a new process and not well defined or documented, so anything we can provide to give insights and processes is going to be helpful.

No, a defined process by itself is not the only answer for innovation teams. It just seems that many of the other factors are present, while there remains very little defined process for innovation.
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posted by Jeffrey Phillips at 5:00 AM


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