Thursday, June 19, 2008

Innovating with Intent

So you've made it over the first hurdle - everyone agrees on the need to innovate in your business. If you are like most firms, you'll conduct a few brainstorms, investigate a few trends or new opportunities, and speak with a few consulting firms. Sooner or later it will dawn on you or your team that you don't really know what the intent of innovation is.

Most management teams view innovation as a way to grow more business and revenue, driving what's called "organic" growth (that is, growth that does not come from acquiring another company). Organic growth comes from selling existing stuff to new customers or new things to existing and/or new customers. This raises a few questions:

  1. Should the innovation team focus on developing ideas to better position the existing products for new customers?
  2. Should the innovation team focus on incremental but new ideas for the business to create?
  3. Should the innovation team seek methods or process improvements to dramatically cut costs (thus increasing profits)?
  4. Should the innovation team consider reworking the business model of the organization (using Dell as an example and changing the predominant industry paradigm)?
  5. Should the innovation team consider radical or disruptive product innovation?
After all, what does the management team actually want? If you have this knowledge, we call this strategic intent. Innovation is a good set of tools and capabilities, but needs to be guided by the strategy of the business and clarity in what the management team wants and expects. Too often, innovation teams can see many different paths and opportunities, but they aren't certain about the expectations and desired outcomes - they don't have clarity around intent.

What happens then? Safety and inertia set in. Innovation teams work on very safe, simple innovations - incremental solutions for existing customers. Instead of changing the existing market or creating new products or markets, they settle for working within the existing paradigm. After all, if there is a lack of clarity, it makes sense to work within the constraints of the existing business. Frankly, this is probably what some management teams want - a thin veneer of innovation without a lot of risk. However, many senior management teams expect more and want more from their teams. They want ideas that are going to drive real value and growth. They want to differentiate and have their firms viewed as innovators. They are frustrated because they don't see the kinds of ideas that will make a difference in the organization.

Working with a number of innovation teams, I encourage them to create their own scope and intent and play that back to the senior executives. When doing that, it is much better to stretch the scope and intent of innovation as much as possible - better to ask for forgiveness for being overly aggressive, rather than settle for a very confined innovation effort and scope. As an innovation team, if you aren't given a clear mandate and if the strategic intent isn't clear to you, then stop what you are doing and write your own ticket and have it validated by the management team. Otherwise you'll revert to innovations that are simply too safe to be considered as innovation, or you'll focus on innovations the management team doesn't view as integral to the business.

Doing a few things well at the outset of an innovation program or initiative, especially getting clarity on the expectations, scope and strategic intent, will provide tremendous value down the road. Neglecting this work only sets you up for failure.
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posted by Jeffrey Phillips at 6:07 AM


Blogger Ravi said...

Nice post. Is there some Innovation Capability questionnaire available that can be administered to measure a team's capability to innovate? Any pointers will be useful.

7:07 AM  
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