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Explaining the Five Stages of Innovation Maturity

March 23, 2021
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Large organizations often want to know where they stand when it comes to innovation maturity, progress, or sophistication. We divide this journey into five stages, from “ad hoc” to “optimized.” The stages are described below; we’ve also included data from our past benchmarking surveys to let you know how many organizations place themselves in each stage. 

For a quick, 5-minute assessment of which stage your organization fits into, click here.

The arrows at bottom lay out the five stages of innovation maturity, as defined by InnoLead. The bar graph at top features data from InnoLead benchmarking surveys conducted between 2015 & 2019, on which stage of maturity survey respondents place their organization in. (Total percentage adds up to more than 100 due to rounding.) 

1. Ad Hoc 

Organizations at this stage are often characterized more by well-intentioned “desires to innovate” than by thoughtful execution. People, time, and money may be allocated to pockets of ad hoc innovation activity within these organizations, but rarely will they generate sustainable momentum for innovation and organizational engagement, much less tangible returns. There are few formal tools, systems, or procedures in place. Establishing a common language and vocabulary of innovation is frequently a good place to start the performance-improvement journey. 

On average, 15 percent of respondents to InnoLead benchmarking surveys conducted between 2015 and 2019 have placed themselves in this stage.

2. Emerging

These organizations tend to have some early innovation structure, systems, and staffing building blocks in place. There may be innovation teams working on discrete initiatives that are locally developed and coordinated, rather than linked and prioritized at a strategic level. There may be initial employee crowdsourced idea campaigns and pitch events, or some training programs. After ensuring that a common language and vocabulary of innovation is in place, these organizations should establish clear definitions of innovation success and strategy to guide further investment.

On average, 43 percent of respondents to InnoLead benchmarking surveys conducted between 2015 and 2019 have placed themselves in this stage.

3. Defined

These organizations usually have the basic innovation building blocks in place and organized to achieve the objectives established by both organizational and innovation-specific strategies. Distinct, dedicated innovation systems and resources are in development or may already be in use, including governance of strategy and execution as well as internal innovator networks. Attention is paid to creating a culture of innovation. Once a common language and vocabulary of innovation — and clear definitions of innovation success and strategy — are in place, these organizations should begin tracking closely the performance of their innovation capabilities to identify which structures and systems are working well and which ones should be improved.

On average, 27 percent of respondents to InnoLead benchmarking surveys conducted between 2015 and 2019 have placed themselves in this stage.

4. Integrated

These organizations are frequently leading their industry in the returns they capture from their investments in innovation. All key building blocks are in place, with strategy, structure, systems, and staffing reinforcing each other. Senior leadership “role models” or demonstrates many of the right behaviors to shape and reinforce a culture of innovation. Core improvement and extension activities are separate from transformational growth activities. Performance assessment and management KPIs are in use. Financial resources are carefully allocated. Innovation human resource and knowledge management processes are in development or already in place. For these organizations, the challenge is often to further optimize their innovation performance by continuously assessing and improving the performance of each individual building block as well as the synchronization of the ecosystem as a whole.

On average, 13 percent of respondents to InnoLead benchmarking surveys conducted between 2015 and 2019 have placed themselves in this stage.

5. Optimized

These select few organizations have innovation in their DNA, and set the innovation pace for all others. Innovation is considered a legitimate corporate function. Both leaders and employees consistently employ a universal language and vocabulary of innovation. Organizational strategy and innovation strategy are clearly linked and dynamically updated. The innovation ecosystem itself is a well-oiled machine, with formal systems in place to continuously assess and improve ecosystem performance. Leaders and teams advance initiatives across all time horizons efficiently and effectively. Overall return on investment in innovation is carefully monitored, consistently high, and organizationally transformative. The impact on customers, industries, and markets is unmistakable and enduring. These organizations should do what they can to codify and communicate their approach so that others may benefit.

On average, 4 percent of respondents to InnoLead benchmarking surveys conducted between 2015 and 2019 have placed themselves in this stage.

 

(Please note: the totals add up to more than 100 percent due to rounding. Thanks to our friends at KPMG and Innosight for their support of our benchmarking research.)

 

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