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Successful Innovation Programs

There are two main factors that you should consider when selecting innovation programs and structures to put into practice in your organization: strategic fit and cultural fit.

Strategic Fit means that your innovation program should support your organization’s strategic goals. Strategy will determine the degree of investment in your innovation program, as well as the goals you will assign for the program.

Innovation strategies differ by industry, and so should programs. Software makers spend the highest percentage of their budgets on innovation, and most of the money is devoted to application development. Consumer products firms invest more in consumer insight work, while companies in mature industries often concentrate on engineering.

Likewise, if your strategy is to outflank the competition, you should invest in non-traditional innovation programs and structures, such as customer/user experience, analysis of non-customers who may become customers if you can design innovative solutions for them, and open innovation programs to link with communities outside of your company.

Cultural Fit is the main factor that determines whether your associates will foster or frustrate your innovation program. Any new initiative must take into account the current beliefs and behaviors in your organization. If change is required, top management must take the necessary steps to socialize the change so that attitudes and behaviors actually change.

If your current employees were selected for compliance and conformity, you may have to retrain them or hire some mavericks. If your current culture is risk-averse, you may have to set up a separate operation – either in-house or outside – to pursue new ideas with higher risk-reward ratios.

Although other companies have succeeded with many innovation programs, don’t be too quick to borrow them. Check for strategic fit and cultural fit first.

Related reading: The Ten Types of Corporate Innovation Programs

 
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Posted by on November 7, 2016 in Uncategorized

 

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Design Thinking: Buzzword or Benefit?

Design Thinking can revolutionize your approach to business, and it can improve your results dramatically.

Apple used design thinking to become the most valuable corporation in the world. Wal-Mart became the largest corporation in the world through design thinking. Amazon, Bharti Airtel, Uber, Oyo and IndiGo disrupted industries and became market leaders with design thinking.

Organizations don’t use Design Thinking primarily for two reasons: they don’t know about it, or they are not comfortable changing their beliefs, attitudes and habits. Sadly, if they ignore Design Thinking, they risk being surpassed by competitors.

Here’s a brief introduction to get you started. Design Thinking is based on empathy. To succeed in any endeavor, you must understand and appreciate how your customers perceive and interact with your solution. I teach that business managers must become like brain surgeons, so they can look inside the skulls of users to learn how they think, and like heart doctors, so they can learn how users feel. Only then can the managers design solutions that will be both effective and acceptable to customers.

The second pillar of Design Thinking is creativity. Too many organizations pay only lip service to creativity, but what they really value and reward is conformity and continuity. Questioning the way things are done is discouraged. New ideas are dismissed or delayed in favor of existing initiatives and activities. Creativity is squelched, and the organization never benefits from the original thoughts of its employees. To correct this deficiency, an organization can establish programs and policies to increase the creative output of its staff.

Design Thinking has become a hot business buzzword. I hope you will take steps to change it from a buzzword to a benefit in your organization.

Related reading: The Power of Design Thinking

 
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Posted by on September 26, 2016 in Uncategorized

 

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Overcoming Cultural Barriers to Innovation

Two kinds of barriers – attitudinal and institutional – can block innovation in your organization. Of the two, attitudinal barriers are by far the more dangerous. What can you do to overcome them?

World-class innovators use three powerful levers to change the attitudes and behaviors of their workers. The three levers are innovation policies, innovation programs, and innovation structures.

Policies tell workers what behaviors are expected. In a culture where words are understood to express feelings, hopes and social niceties, rather than taken as commitments to act, it is essential that corporate leaders go beyond inspirational speeches. The leaders themselves must “walk the talk” of innovation, and the company’s policies must demonstrate that innovation is a requirement, not an option.

Programs are organized activities that promote innovation in the company. These may range from special events and workshops to innovation projects to corporate-wide campaigns. Innovation programs give employees opportunities to participate directly in the work of innovation.

Structures are departments, offices and positions in the organization where various steps in the innovation process will be managed. Unless specific individuals and groups are assigned to look after the process and held accountable for its outcomes, it can be difficult to assess and improve an organization’s performance in the area of innovation.

Attitudinal barriers to innovation may come from your national culture, your industry culture, or your corporate culture. No matter the source, you can create policies, programs and structures to make world-class innovation happen in your organization.

Related reading: You Can Innovate Anywhere – Even Insurance Companies!

 
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Posted by on September 13, 2016 in Uncategorized

 

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Innovate Like Google

An organization that practices world-class innovation is marked by three things. It invests human and financial resources in innovation, it uses best-of-breed innovation tools and techniques, and it chooses a single definition of innovation to apply across the firm. Google is a great example to imitate.

Google’s 20%-time policy allows engineers to work one day out of five on projects that they – not their bosses – select. Would you divert 20% of your engineering budget from customer projects to projects that generate no revenue? Google is happy to do so.

Google is also known for its scientific approach to innovation. World-class scientists conduct groundbreaking research. Small teams are formed to assure that projects move quickly without bureaucratic interference. New product ideas are tested through rigorous experiments. Does your company practice innovation as a science?

Everyone at Google knows what innovation means. The organization’s mission is made clear to workers at all levels. Values such as learning, organizing information, and entrepreneurship are promoted. The goal of innovation is to create applications that will make customers’ lives better. Do your leaders, mid-managers and workers all know what innovation means in your company?

You don’t need billions of dollars in revenue or market capitalization to innovate like Google. If you invest strategically in innovation; practice innovation in a disciplined, scientific manner; and adopt a single definition of innovation for everyone on your team, you’re on your way to success.

Related reading: How Google Innovates

 
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Posted by on August 29, 2016 in Uncategorized

 

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Anthropology and Innovation

In world-class innovation, our goal is to invent a solution that will create value for customers (external or internal). Most new product development departments share that goal: to create a new product that customers will purchase.

Martin Lindstrom, the #1 branding consultant in the world according to many sources, analyzed American consumers’ preferences for canned pasta sauces and discovered that there is no single pasta sauce that will satisfy all consumers. Instead, he identified three groups of sauce buyers. Each group valued a different quality of the sauce, such as chunkiness or stickiness.

Lindstrom reached his conclusion by combining anthropological research with sophisticated data analysis. The pasta sauce brand that engaged him used his findings to launch new varieties for the three consumer groups. The result was a huge gain in market share and profitability.

Innovators can learn much from Lindstrom. For example:

  • Challenge your own wisdom. Your customers most likely understand your product differently from the way you understand it.
  • Look into your customers’ heads and hearts. Use ethnographic and empathetic research to learn what drives and motivates them.
  • Experiment prolifically and rigorously. Only well-designed, controlled experiments will yield reliable data upon which to base managerial decisions.
  • “The value of innovation is in the insight, not the idea.” I teach this consistently. Those who apply it, benefit consistently.

Lindstrom has documented his work in seven books. I plan to study his techniques, and I recommend that you do the same.

Related reading: A Not So Elementary Exploration of Brand Insight

 
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Posted by on August 17, 2016 in Uncategorized

 

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Innovation that Succeeds

Innovation is supposed to make your organization more successful. That may mean higher profits, happier customers, productive employees, or any other measurement you use to determine success. Why then do some companies reap the fruits of innovation while others encounter disappointments and failures?

The keys to successful innovation are easy to learn but not always easy to implement. To be a world-class innovator, you need three ingredients: 1) a single definition of innovation that is shared across your organization, 2) the right level of investment of human and financial resources, and, 3) world-class innovation tools and techniques.

Some organizations cut corners in one or more of the three areas, so they do not gain all the benefits that are available. Others make a good faith effort to excel in all three areas, but some of their projects stall due to issues in their corporate culture or their corporate hierarchy.

Another simple way to keep your innovation projects on track is to ask the right questions. Recently, Steve Glaveski published a list of 11 innovation questions, such as, “Can we test it relatively quickly, economically and effectively using our existing networks and ability to prototype?” and, “Will it cost less to deliver than people are willing to pay for it?”

The three keys listed above and the questions from Steve Glaveski’s list are signs that you take innovation seriously. A serious approach to innovation – one that includes planning, monitoring, investment and evaluation – will succeed far more often than an unorganized, underfunded innovation effort.

Related reading: 11 Questions to Ask Before Starting an Innovation Project

 
 

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What Kind of Innovation?

What kind of innovation is right for your company?

To answer this question, you must first determine your goals for innovation. Do you expect innovation to bring you new products and services, more effective marketing, lower-cost operations, happier employees, or some other goal? An R&D lab will produce different innovations from a Kaizen program in the factory. Make sure your innovation effort aligns with your goals.

Next, consider the resources you are willing to commit. If you spend only enough to host an annual innovation awards competition and banquet, you may receive amazing ideas from your employees—or you may not. If you hire a full-time innovation team and invest in journeys of discovery, you should expect a steady stream of profit-improving innovations. Scale your investment according to your priorities, and measure your return on investment.

Third, consider your market. Mature industries often thrive on incremental innovation and operational innovation. Disruptive innovation happens rarely, but when it does, it can destroy the incumbents. Evolving, growing industries, on the other hand, are frequently disrupted by innovations of various types, including product, service, business model, partnership and customer experience. Players in IT, mobile telephony and similar businesses will succeed when their innovation programs are dynamic and versatile.

There is one kind of innovation that I recommend for all companies regardless of their size or their industry. That is customer-centered innovation. When the customer is the central focus, then every innovation, whether it concerns operations, sourcing, HR, marketing, finance or IT, should create value by improving someone’s life. Value creation is the hallmark of all successful innovation.

Related reading: Types of Innovation and How to Utilize Them

 
 

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