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Don’t Pass the Buck, Build an Innovation Culture

By Mark Turrell, Chief Executive Officer, Imaginatik, Inc.

Innovation is the new watchword for today’s business. Top executives constantly emphasize the importance of building innovative products, offering innovative services, and being more innovative thinkers in order to stay competitive. In a recent Bain & Company survey, nine out of ten senior managers saw innovation as a critical source of future competitive advantage. The ability to consistently capture, build and develop new ideas has a direct impact on revenue growth. Yet while all businesses want to be labeled innovation leaders, corporate America is passing the buck.

More and more businesses have turned their attention to “innovation outsourcing” —relying on outside resources not just for manufacturing, but for research and development and leading edge ideas. Outsourcing can boost short-term capacity, but if innovation outsourcing becomes the industry norm, how will companies keep their edge? Do employees stay motivated selling someone else’s ideas? And what’s to stop innovation “partners” from turning the tables and becoming competitors?

Another roadblock to successful innovation results from two common misconceptions: 1) Innovation is a matter of guesswork and serendipity and 2) Innovation only relates to R&D and new product development.

The truth is that successful innovation in the best companies touches all aspects of a business. Improving business processes, identifying new ways to reduce costs, improving existing business models, and creating new ways to market products are just a few examples of innovation that impacts a company’s bottom line.

Achieving consistent innovation relies on a process that must be formalized within a business. Executives must foster a culture of innovation that encourages people across the organization to share their ideas and insights. They must create a series of processes that guarantee success. There are seven key components to creating an innovation culture:

Manage Ideas. Although to some this may seem strange, businesses need an Idea Management process in order to scale innovation in a networked, distributed organization. Otherwise organizations 'invent" the same ideas over and over again, and foster idea silos where people only share ideas within a specific group. Idea collection is only part of the problem. The top firms devote 60% of their attention to structuring ideas, the evaluation process, and making sure that ideas are implemented.

Focus. Old fashioned suggestion programs encouraged ‘any idea, any time’. Random idea sharing has some intellectual merit, but unfortunately it tends to disrupt management and business processes. The most successful systems for idea sharing use short-term focused business challenges to encourage employees to solve specific problems quickly. This is the basis of the Event-Based approach (short business-focused ideation) in use in over 75% of companies doing Idea Management. Focused ideas are significantly more likely to be implemented, 30-fold better than the suggestion box approach.

Awareness. Part of the problem is that managers do not know that good ideas exist, and are sometimes afraid to ask. Businesses need to create 'hubs" for idea sharing, both physical and virtual, that get people talking and creating a dialogue about what they know.

Innovation Skills. Successful companies train their workforce on 'foundations of creative thinking" and train their management to lead the innovation process. If employees and management are more skilled at developing ideas, they will create more ideas, and as a result, create solutions to problems. More innovation skills means higher quality ideas and more creative solutions.

Dedicated Innovation Resources. Innovation is so important to companies that many firms have established roles such as Director of Innovation, and are in the process of setting up dedicated innovation or 'Concept Development" teams. Applying dedicated resources is a commitment point for management: if they are not willing to assign quality people to work full-time on the innovation process and specific projects, they are not fully supportive of the initiative.


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