In the last article, we explored the problem with managing the so-called fuzzy front-end of the innovation funnel. It’s a region that is by definition uncertain, but also full of opportunity for companies if they want to really enhance their innovation results.
Innovation is on top of the agenda
Study after study shows that “innovation” has a premier spot on the Top Management Agenda.
True, the word “innovation” may be overused. So for example, upon learning that the “Peanut Butter Pop Tart” was one of the most important innovations of a USD 15B food company, the Wall Street Journal remarked: “Some CEOs spray the word ‘innovation’ as if it were an air freshener.”
But there is indisputable evidence that truly innovative firms capture more revenues and more profits from their innovation efforts than firms who are not excellent in innovation.
R&D spend alone does not guarantee innovation success
One might initially assume that heavy investment into R&D correlates with innovation success. However, this is not always the case as studies have shown, for example in “The Most Innovative Companies” (BCG, 2014).
In fact, R&D investment is a necessary but not sufficient condition to innovation success.
Effectiveness is the key to win the innovation race
We’ve seen that the scope and nature of innovation is changing with concepts like Big Data, Social Innovation, Additive Manufacturing (3D-Printing etc.) and Design Thinking becoming Good Practice in innovation management.
In their search for innovation success, firms have established solid practices in “making innovation things right” (i.e. efficiency in the back-end of the innovation funnel with strong procedures and Product Lifecycle Management systems).
This is good, but not good enough to take a leading spot in the innovation race.
The innovation race is won by doing “the right innovation things” – by becoming more effective.
So, how do you achieve effectiveness?
The best innovators excel in capturing the noise in the business environment and read the innovation signals contained there. The world full of more and more data and new technologies than ever before. It can easily become a case of overwhelm for the front-line innovator and connecting to radically different information sources becomes even more of a challenge. But, critically, the leaders perform better in translating these signals into insightful ideas.
Next, the best innovators allocate their innovation investments to the most relevant areas. No one has an infinite innovation budget – So success in innovation requires careful targeting and selection where to shoot at. The problem with innovation is that you shoot at a moving target, since you want to solve your customers’ problems in 2-3 years (or whatever the lead time of your innovation process is).
They also find clever ways to engage the internal innovator crowd and to co-innovate with the best and brightest outside the firm – through Open Innovation techniques and management approaches.
And finally, they empower their innovators to grab the ideas and run with them – they work on culture and behaviour.
REFLECTIVE QUESTION: How could your firm become better in capturing the noise and elicit innovation trends / signals?
Please contact us if you would like to give new innovation momentum and create a highly effective approach to your innovation activities.