What does innovation mean to your organization? In this video, learn to define it and discover how the world’s top innovators manage and measure it.
- Strategy may seem like an optional ingredient for innovation, but it's actually the compass for every aspect of your innovation program. Without strategy, innovation is just high-risk chaos with haphazard results. But innovating with strategy, that's where truly disruptive ideas happen. If you're not sure where and how to start building your innovation strategy, concentrate on just three steps. The first step is to define innovation. What qualifies as innovative in your company or organization? To determine your definition of innovation, Harvard Business Review recommends reviewing a decade or two of your innovations to identify the types of ideas that produced significant margin and revenue gains. Take Whirlpool, for example. For one of its products to be considered innovative, it must be unique and compelling to consumers, create a competitive advantage, offer the potential for further innovations, and provide customers with more value than anything else on the market. Whirlpool has evolved this definition over time and will likely continue to scrutinize and perfect it. In your own company, follow Whirlpool's example of reviewing and fine-tuning your definition of innovation over time. Your next step involves managing innovation, as in establishing a team to increase innovation in your business. In addition to identifying the right people, decide whether the role of this team is to facilitate innovation, to incubate it, or to function as a hybrid of both. Innovation teams in an incubator role develop breakthrough ideas from start to finish. At Shell Oil, the GameChanger team incubates and develops ideas that go beyond business as usual. With an annual budget of more than $40 million, Shell's incubator operates outside the standard approval processes for investing in unproven ideas. Now, conversely, teams acting as facilitators assist other business units and their innovation efforts. At Procter & Gamble, the Connect and Develop team facilitates innovation between its business units and external partners. This team of facilitators operate at the corporate level and are responsible for advancing innovation across multiple divisions. A hybrid, a facilitator, and incubator is exemplified by Nike. Its innovation lab pursues disruptive ideas, while its business units are constantly developing incremental innovations. The role that's right for your organization will depend on your goals, budgets, as well as capabilities, resources, and current levels of innovation activity. Your last step involves measuring innovation, in other words, choosing metrics that measure, diagnose, and improve innovation. Innovators like Estee Lauder and Bank of America use metrics to help them identify both issues and wins in their innovation programs. These companies know that their metrics serve as learning opportunities throughout the entire innovation process. In your own organization, choose metrics that monitor current challenges and encourage innovation actions from employees. If, for example, you want to establish accountability for innovations, consider a metric like number of ideas generated per employee or percentage of time spent by employees on innovation. Strategy provides you with a compass for innovation. Through analysis, team accountability, and metrics, strategy gives you structure to the otherwise chaotic invention process. And while all innovation comes with a degree of risk, innovating strategically means your decisions are guided by data, and your results are more likely to be disruptive.
- Challenging your risk tolerance
- Applying the five phases of innovation
- Developing an innovation strategy
- Committing to innovation
- Defining a smart risk
- Managing your idea pipeline
- Evaluating ideas like a pro
- Measuring innovation when it counts
- How top innovators manage risk
- Achieving a balanced innovation portfolio