Launching an innovation management system does not have to be guesswork, and it is a lot easier than most organizations imagine it to be. Innovation by definition is very different from typical business processes, and it should be in a constant state of flux. Waiting until you can get it totally right misses the point. Innovation is not a destination, it is rather a state of mind. This means getting started is easy, and you can iterate to continuously explore, improve, and enhance.
Here is a collection of the most popular innovation management system questions we have been asked over the years, and what best-in-class companies believe are sound strategies and operating models to address them.
Question 1: How can we build a system if we have not settled on an innovation management process?
You will never actually settle on a process. It is true that having a process to make sure the organization is able to go beyond idea capture is necessary. Building an innovation management system, on the other hand, helps drive the thinking for the right process to develop as well as the many other critical considerations that normally come into play, such as focusing on the right problems to solve, identifying the grand challenges the company should focus on, and building an innovation ecosystem. The initial process should be as simple as possible just to get started. You can enhance it based on adoption and learning.
Question 2: Who in the organization should manage innovation?
The starting point may be different from the final destination. The best place to start is the line of business (LOB) owner that has the highest level of interest and funding to launch the innovation initiative. Ideally, innovation should be overseen by a center of excellence team as the organization institutes a more formal InnovationManagement Office that has the complete support of the CEO, reports directly to the board of directors, and acts as a shared service to make sure innovation becomes an integral part of the organization’s culture, everyday work, and standard processes. A good innovation management system will include the templates, a communication and engagement strategy, and processes and rules to quickly launch new activities. This means a small central team can easily act as the innovation hub and help innovation advocates, and sponsors from different LOBs, launch their own innovation initiatives.
Question 3: Where should we innovate first?
Innovation projects can be highly impactful, as long as you focus on solving challenges that align with your corporate strategy. This challenge-driven innovation model will help ensure that ideas can receive the attention and funding that leads to successful projects and high-value outcomes. Depending on the organization’s level of innovation management maturity, simple continuous improvement-type challenges that help uncover low-hanging fruit can be a good starting point, such as “What should we stop doing?” or “Where should we innovate next?”
Question 4: How do we get our executives to support the innovation program?
Begin with the end in mind. Executives want to receive a demonstrable benefits, or ROI, and easily track the progress of the innovation program. Focus on tracking and reporting the right metrics. Alignment with business strategy, financial impact on costs or revenues, competitiveness and agility improvements, level of risk involved, and effort required are the most popular metrics that help qualify and quantify the value before a more exhaustive analysis is undertaken. This will be a sure-fire way to receive the support you need to move the needle on the areas that your executives believe matter most to the business.
Question 5: How can we make sure we get disruptive ideas?
If you want your innovation program to be focused on disruption, ask participants to submit their problems and then look for patterns and combine similar problems that potentially help uncover an area that is ripe for disruptive innovation. Do not use a stage-gate approach for disruptive innovation activities. These ideas should follow an agile innovation approach that allow you to run as many experiments as possible. Constantly revise your efforts to improve how you budget for experimentation by increasing the number of experiments, while decreasing cost per experiment, and celebrating failure based on extracted learnings and other factors.
Question 6: How do you control the volume of ideas so we can actually review and act on them?
Instead of ad hoc idea submission, start with a challenge-driven innovation model, so you can better focus your innovation program efforts and communicate the type of ideas you are looking for. Designate a challenge owner who will be responsible and accountable for ensuring user engagement, the systematic evaluation of all ideas, and delivering results.
Question 7: How do we keep people engaged?
Be transparent about your innovation process, and let submitters see the status of their idea. Make sure you have shared and implemented an SLA (service level agreement) that notifies users of key milestones that are accomplished. If ideas are discarded, then the submitter must be informed of the reason—and what they should improve if they intend to resubmit the idea. Make sure that not just the submitter but also the users who support and collaborate in the system get as much visibility as possible into the outcomes that are being achieved. Highlight the progress that is being made; that shows the company is supporting innovation efforts and taking the results very seriously.
Question 8: What is a good engagement rate for a typical innovation activity?
It really depends on the type of innovation ecosystem contributor you are engaging, as well as the length of time and type of the innovation activity. The contributors can include your employees, customers, suppliers, and others. Your results and level of contribution are proportional to the circle of influence of these users. Engagement also depends on the rewards and recognition systems you have designed and implemented for every contributor type.
Question 9: What type of rewards work best?
You need to leverage both soft and hard rewards. Hard rewards (win an iPad) works well with ecosystem contributors outside the company and occasional innovators inside it. But soft rewards are really best to create a sustainable culture of innovation. Ideally these soft rewards are directly tied to HR performance evaluation metrics, and the organization enshrines active participation in and contribution to innovation a part of every job description.
Question 10: How do we celebrate failure?
Stopping bad investments fast has value and so does helping people avoid going down the same rabbit hole. If an experiment fails and there was learning, then a celebration is in order. Clearly defining what is a good failure is an important exercise since, unlike other typical business processes, innovation will always result in more failures than successes. Tracking the cost of experiments and rewarding failure will invariably result in the company increasing the resources it commits to experiments, making it more likely that innovation will lead to positive outcomes and successful projects.
The good news is that innovation management systems are easy to phase in with a challenge-driven approach, and you can incrementally mature your innovation system as you almost immediately experience significant financial benefits. Enterprise management systems of all types require planning to launch an effort, but don’t let the perfect be the enemy of the good—this is especially true for innovators. Start your innovation management system quest today.
Ludwig Melik is the CEO of Planbox. InnoLead regularly publishes Thought Leadership pieces written by our Strategic Partner firms.