Innovating To Win

The Case for an Innovation Center of Excellence

Many organizations struggle with the issue of how to best establish innovation as a self-sustaining and value-driving component of the corporate environment.  These businesses recognize the critical need to move beyond the business-as-usual mission of process optimization for bottom-line tuning and refocus their energies on fueling the growth engine of the enterprise with innovation.  But when actually working to achieve this goal, they are challenged to find the road to success. 

Even skilled innovation consultants have difficulty with this issue.  The evidence of this is easy to see in the blogosphere.  Recently, Jeffrey Phillips, in his “The Politics Of Innovation” post on the Innovate On Purpose blog, argued for the centralization of innovation responsibility.  The gist of his argument is that when responsibility is diffused across a wide population, ownership is not defined, and the innovation mission loses out to the urgencies of the moment.  However, a comment posted in response to the article points out the problems that can occur when innovation responsibility is taken away from teams that will feel threatened by such an approach.

So what is the answer?  How can organizations help foster innovation as a permanent and purposeful part of their culture while addressing the issues of change management that cannot be ignored?  Here is the advice I would offer based on what works at many High-Performance Innovation organizations around the globe.

The Innovation Center of Excellence

Consolidating responsibility for driving innovation with a single team is a sound idea.  Jeffrey is correct to state that a signal point of accountability is a necessary and critical success factor.  But there is a subtle and very important difference between Jeffery’s idea and the idea that I am advocating here: the establishment of what I call a corporate Innovation Center of Excellence.  This office should not be chartered with the ownership of the production of the actual innovations.  Instead, the charter of the Innovation Center of Excellence is to drive the successful deployment of innovation best practices in support of the organization’s goals.  It will execute to this charter by bringing uniformity, repeatability, and best practices to innovation across all domains of the organization.

The diagram to the right depicts the core elements of the corporate innovation office.  The Center of Excellence operates as a horizontal function and delivers four basic services to the corporation: facilitation services, training services, knowledge management, and innovation management.  To make clear what these functions comprise, let’s drill down to the next level of detail.

The facilitation services component of the Innovation Center of Excellence consists of a highly skilled team of innovation specialists.  These are people who have been trained in the disciplines and techniques of structured innovation and who have achieved mastery of these skills.  Their role in the organization is threefold: facilitation of innovation projects with the company, consultation on innovation methods, and development of more master innovation practitioners.  This team is a highly leveraged corporate resource.

The training services component of the Innovation Center of Excellence is responsible for the development and delivery of innovation skills training throughout the enterprise.  The training should be at several levels.  At the introductory level, training should give employees an introduction to the concepts and facilities of repeatable innovation best practice.  Beyond the introductory level, there should be a path of education that can lead people toward innovation mastery.  You might ask, “Why do I need an education team if I have a facilitation team?”  Simply put, innovation is too important to bottleneck behind a small leveraged team.  The idea here is to develop various levels of innovation skill throughout the organization.  By seeding innovation skill in vertical functions, you empower these functions to be more self-sufficient and nimble.  Development of mid-level innovation practitioners who are vertically oriented creates the ability to manage simpler innovation efforts locally, while maintaining the ability to engage with the corporate innovation masters for complex or cross-organizational projects.

Knowledge management is fundamental to any corporate innovation initiative.  The knowledge management function in the Innovation Center of Excellence is responsible for monitoring the domain topic requirements that must be fulfilled in order to support the innovation agenda for the corporation.  Some organizations will prefer to locate this function in their IT group.  But this structure can work effectively only if the innovation knowledge management function is matrixed into the Innovation Center of Excellence.

Innovation Management is the final component of the Center of Excellence.  This functional responsibility encompasses coordination of facilitation activity and allocation of facilitation resources; general management of innovation deployment; monitoring and measurement of innovation ROI; identification of training and best practice needs; and
scheduling and managing internal communications with the corporate innovation community.

The centralized corporate innovation office described here will help develop leveragable innovation best practice skills at every level of the organization.  It will create a highly visible focus on the organizations innovation agenda, and with proper execution it will build the momentum needed to establish a self-sustaining innovation culture.

Webcast This Thursday - Implementing Closed-Loop Design for Innovation Excellence

I hope you will join me this Thursday, May 31st, at 2:00 PM EDT.  Along with Jeff Moad of Managing Automation and Joe Barkai of Manufacturing Insights, I will be participating in a webcast that should be of interest to organizations seeking to better understand how they can improve their innovation effectiveness.

The webcast will examine how leading manufacturers are improving their entire closed-loop product development process by leveraging integrated innovation best practices across the product life-cycle.  I will present a case study of how one form has approached  the challenges they faced in the product development process and how they overcame these challenges though integration of innovation best practices to speed time-to-market while also improving product performance and reliability.

The webcast should be a very interesting event.  You can sign-up here.

Learning Innovation

In “How Fit Is Your Innovation Practice?”, the stages of the Innovation Practice Maturity Model (IPMM) were outlined.  Now, Lauchlan Mackinnon has outlined “The 4 Stages of Learning in Organisations” in his Think Differently!! blog.  The synergy in the discussed models is very strong.

In the Accidental Innovation stage of the IPMM, organizations exhibit unconscious incompetence.  They are unaware of how poor their innovation practices are because they do not yet appreciate the possibilities that exist for improving the status quo.

In the Situational Innovation stage, as organizations begin to understand that there is better way to drive their success at innovation (conscious incompetence), they begin dabbling with and learning about innovation best practices.  Organizations have mixed success with their early forays into structured innovation—typically seeing strong ROI, but failing to achieve much traction of the methodologies.

As companies evolve to the Repeatable Innovation stage, the organizations benefit from learned innovation practices that are applied on demand.  The organization now has the ability to target their innovation expertise on high value opportunities.  The culture of sustainable innovation has not been established yet, so the continuance of good innovation practice requires a specific effort (conscious competence).

Organizations that achieve unconscious competence in their innovation practice have become High-Performance Innovation organizations.  In these companies, innovation has become part of the cultural fabric of the organization, and the infrastructure and support systems have been put in place to ensure that innovation practices are self-sustaining.

Lauchlan goes on to point out the connection between the progress through different stages of learning and the resistance to change.  Citing a chart from Luc Galoppin’s blog (shown above), it is noted that the resistance to change grows as the organization moves through the conscious incompetence (Situational Innovation) phase and continues through the conscious competence (Repeatable Innovation) phase.  This is very interesting and important to understand for innovation practitioners interested in moving toward a High-Performance Innovation environment.

In the Situational Innovation phase, many individuals will be uncertain about the path forward.  They are asked to do things which are unfamiliar.  Even worse, they are asked to accept that they have not been performing optimally because they have not been using reliable methods of sustainable innovation practice.  The introduction of the new practices is therefore met with skepticism and sometimes viewed as vaguely threatening.

It is vital to the success of any innovation practices deployment to consider the individuals that will be expected to employ the new methods and supporting technologies.  Innovation disciplines must be presented as enhancing their value to the organization.  By focusing individuals on the real benefits to them personally and addressing their concerns early in the process, it is possible to shift the balance in the resistance to change equation.  This shift will help convert the innovation practices deployment from a push dynamic to a pull dynamic where individuals want to participate in the program.

[Chart reproduced from Luc's Thoughts on Organizational Change: "Learning and Resistance"]

Field Notes – May 2007

There is occasional discussion on various blogs and in the press about whether innovation is a hot topic or passé.  As I am returning from a road trip this evening, here are some observations that I am coming away with.

This week I have visited with senior representatives of four global enterprises representing different industries and having annual revenues ranging from 5 to 39 billion USD.  In these meetings, common themes emerged at all these corporations.

Structured Innovation
These companies all recognize the importance of innovation as a core competence to drive corporate value.  Operating in climates where increasing global competition and rapidly evolving market ecosystems are the facts of daily life, these organizations feel the need to keep revitalizing their revenue and profit engines through innovation.  More importantly, they have concluded that their goals cannot be achieved by chance, but that their goals must be pursued with the deliberate intent and predictability that structured innovation methods provide.

Leveraging Tribal Knowledge
Another issue these companies are grappling with is how to harness their internal expertise.  This is a common concern in industry where over 35% percent of efforts are wasted reinventing solutions already known to the enterprise.  The graying of the workforce exacerbates the problem in major corporations as the engineers who helped create many of the most important product lines are moving towards their retirement age.  Addressing this issue is vital to keeping the innovation engine of a company efficient.

Whole-process Innovation
Innovation isn’t just about the fuzzy front-end any more.  All of these companies recognize the whole lifecycle relevance of innovation as a driver of right-to-market delivery.  These companies are applying structured innovation methods throughout the PLM process beginning at the strategic planning phase, continuing through conceptual design and quality management, and wrapping up with production optimization and post-delivery defect management.  The integration of innovation best practices across the lifecycle is seen as a key source of competitive value.

Enterprise Commitment
All of these companies are committed to their innovation programs.  The innovation agenda is seen as a front burner issue of strategic importance.  These companies clearly have no intention of backing off their efforts to establish repeatable, sustainable innovation best practices as a strategic core competence.

So as I look back at the discussions I have had this week, it seems very clear that any talk of the death of innovation is simply uninformed.  Innovation is very much a hot issue in boardrooms everywhere.

Take My Market, Please!

On the TIECON EAST blog, Don Dodge of Microsoft's Emerging Business Team posted an interesting article: “Innovate or Imitate...Fame or Fortune?”  In it he discusses examples of innovative companies that were eclipsed by fast-follower companies and what were the underlying reasons for the downfall of the early market leader.  Don raises some very good points in his piece, but he also settles too quickly on the theme of bad management as the wellspring of failure.

A quick look at the list of companies profiled in Don’s article reveals that most of these companies were led by experienced and competent management teams.  Yet undeniably, these management teams made decisions that in retrospect were catastrophic for the companies.  So, why do strong management teams exhibit these lapses in judgment?  This is a question that can’t be given full treatment here.  But, it is worthy of some discussion.

Let’s consider an example of a company that is a successful fast-follower organization: Samsung.  Most of us don’t think of Samsung as a fast-follower at all.  To most of us, they are an innovation leader.  Yet, Samsung considers itself a fast-follower organization.  They have honed their product innovation culture to look for opportunities to excel in markets that are already well defined and find new concepts that will yield competitive advantage in the market through the application of structured innovation disciplines.

The techniques used by Samsung are repeatable, predictable methods to consider the state of a product and identify new concepts that advance the product in a significant way to achieve a desired objective.  While some companies wonder how they can create product innovations on demand, companies like Samsung prove that it can be done.

But if a fast-follower can see an opportunity and then act upon that opportunity to seize the initiative, how is it that the technology leader in the market fails to do the same?  What failings in the organization leave the market leader open to defeat at the hands of the late entrant?  Here are some common pitfalls that have tripped up once dominant companies.

Complacency is a deadly sin for any company.  It is good to be king, but do not forget that there is always someone else eyeing your throne.  Don’t make the mistake of overestimating the strength of your position and thereby conclude that curtailing investment in innovation is a safe way to cut expenses.  In business as in nature, organizations are always either in a state of evolution as they adapt to the changing ecosystem, or they are in a state of decline towards extinction.  In business, there is no state of stasis in which a company can find refuge.

It is important to protect revenue streams, but when the fear of revenue erosion causes a company to stop looking for new market innovations, the result is never good.  Market protectionism is a slippery slope that organizations often find themselves sliding down.  It is important to always be looking for ways to make your own product obsolete.  After all, someone is going to do it. Isn’t it best that is your own organization?  Rather than fight the losing battle of holding on to the past, companies need to find ways to migrate revenue streams to the next generations of offerings.

In complacency and market protectionism we have considered two common reasons that companies close there eyes to foreseeable innovation.  But sometimes companies fail to see the future not because they don’t try to look ahead; they fail to see the future because they don’t know how to look for it.  Looking ahead is the skill of the fast-follower.  Through the use of proven innovation disciplines, companies can bring into focus the visible future and anticipate where specific product and service technologies should be headed.  In “The Tyranny of Either-Or”, we considered how Sony could have used this type of discipline to anticipate the evolution of iPod and its product ecosystem ten years before Apple executed on the opportunity.

This last pitfall, the inability to look ahead with precision, is an endemic problem in business today.  In conversations with corporate R&D VPs, I often hear this complaint.  Yet, this need not be the case.  The techniques used by Samsung can be learned by any organization.

In summary, market leaders must not take their position for granted.  Continuous innovation is vital to the health of an organization.  Companies must learn to compete with themselves and look for ways to supersede their own best products and services.  They must not fear the threats to their revenue streams that market changes bring, but instead should embrace these threats as opportunities to create new engines for growth.

Learn to be your own fast-follower.

Leadership, Management, and Innovation

“Lead, follow, or get out of the way.” – Thomas Paine

I’d like to share a discussion over on InnovationZen with you.  Daniel Scocco posted on the difference between leadership and management.  He stated, “Management is doing the things right, while leadership is doing the right things.”  I don’t agree with this characterization, and I would like to explain why and why this topic is important to innovation practitioners.

So why is Daniel’s statement troubling?  In my comment on InnovationZen, I cited the counterexample of Adolf Hitler as a strong leader who did not do the right things.  Daniel’s response is that while Hitler chose a vision which was not ethically correct, he did do the right things to achieve his vision.  Fortunately, history teaches us that Hitler failed to achieve his vision due to a number of strategic and tactical mistakes.  So, we have a clear example of a powerful leader who could move a nation, but led the nation to disaster because he did not do the right things.

The fundament issue with Daniel’s argument is that his original statement makes sense only if we establish that we are referencing the same context when we use the phrases “things right” and “right things”.  With that in mind and using Daniel’s argument, we could assert that anyone who accomplishes their goal has done the right things.  So where then is the distinction?  The distinction is meaningful only when the things in question are the artifacts of the mission.  Hence we need to consider the notion of rightness in that context.

With that said, it is easy to see that evaluation of the success of achieving the end is and must be independent of whether or not one exhibits good leadership skills.  Similarly, it is easy to see that managers can and do successfully achieve their goals.  Sometimes this success is aided by leadership skills; sometimes it comes despite the lack of such skills.  General George S. Patton put it very succinctly when he said, “A good plan, violently executed now, is better than a perfect plan next week.”

What, then, is the difference between leadership and management?  Leadership is about helping people get somewhere that they might not otherwise have gone, whereas management is about coordinating and controlling resources in service of an objective. These two overlap to the extent that sometimes people are resources.

Leaders are movers of people.  Whether they are directly leading by mobilizing a team to pursue an objective, or whether they are leading indirectly by setting an example that moves others to action, leaders’ skill lie in their ability to ignite the flames of passion in others and to move people willingly to action.

Managers, on the other hand, have a different focus.  While it is universally accepted that leadership qualities will make one a better manager, it is also true that one can be an effective manager with poor leadership abilities.  This is because, in some situations, the ability to move people is not a critical success factor in achieving the manager’s targeted outcome.

So why are we discussing leadership and management on a blog about innovation?  Why should we care about whether management and leadership are different things?  To put it simply, we should care because innovation success requires some measure of both leadership skill & management skill.

Innovation practitioners should always be thinking beyond the edge of the organizations comfort zone.  But doing so means that the innovator will need to move people into this expanded comfort zone if the concepts are to gain traction and have a life beyond the whiteboard.  The value of leadership skills for innovators is generally recognized.  Successful innovation practitioners are leaders in their domain of practice—technology leaders, marketing leaders, business leaders, etc.

Unfortunately, many innovation practitioners do not achieve their potential because management skill is not even on their radar screen.  This is because they perceive innovation as an art that defies management.  Unfortunately, they are very wrong to believe this is the case.  The organizations led by these practitioners are doomed to be forever mired in the morass of accidental innovation.

Innovation practitioners must learn that breaking away from accidental innovation means embracing the discipline of process-driven innovation.  This means establishing repeatable innovation best practices for all aspects of innovation and integrating these practices throughout the organizations supporting processes.  Successfully deploying this type of organized innovation program requires management skills. 

To successfully move beyond the accidental innovation paradigm towards a sustainable innovation program requires both leadership and management skills.  This is why understanding the nature of leadership and management is important.  With this understanding, innovation practitioners can understand what skills they need to develop further.

On the Lighter Side…

Thanks to Jim Belfiore for pointing out this amusing set of innovations.  Enjoy!  I especially like the Twirl-a-Squirrel.

Innovation Is Free

There is an undeniable business mandate for continuous innovation.  It is estimated that by 2012 over seventy percent of products will be obsolete.  This situation is made more problematic by the aging of the workforce.  Much of the expertise and creative experience that created today’s products will leave the workforce soon.  The mandate for innovation is strong and felt in boardrooms globally.

Yet when it comes to acting on the innovation mandate, there is a clear disconnect.  When asked to embrace new disciplines of innovation, many on-the-ground innovation practitioners will say, “I don’t have the time to look at new ways to innovate.”  This sentiment is evidenced in Langdon Morris’s recent “Innovation Champions and Networks Survey,” which cited that 72% of respondents say they should be given more time for innovation if the state of their companies’ innovation programs is to improve. 

Unfortunately when you are knee deep in alligators, it is easy to forget that your goal is to drain the swamp.  The current situation reminds me of the early days of quality management initiatives.  As workers were asked to change their work practices to achieve higher quality standards, they complained about not having the time allocated to support these initiatives.  But in the end we learned that the cost of implementing sound quality systems was more that compensated for by the efficiencies that these systems yielded.

The same is true for innovation initiatives.  Companies that embrace High Performance Innovation as a goal will find that the implementation of the innovation best practices and support systems that lead to success will also yield huge returns in time, bottom-line savings, and top-line revenue generation.  Here is a short partial list of examples of why innovation is free.

Faster Research
Thanks to Langdon Morris again for his recent post: “How to Save Time”.  In this post, Jack Hipple is quoted as saying, “Six months in the lab will save at least an hour in the library.”  This coincides directly with my own experience in talking to companies that are deploying properly constructed innovation initiatives.  Very recently, one senior research engineer told me of how a research project that traditionally would have taken six months to complete was done in only five hours now that she is using state of the art innovation best practices.  The time-to-market benefits of this type of research acceleration are obvious.

Less Prototyping
One clear lesson to be drawn from successful High Performance Innovation Organizations is the integration of innovation practice throughout the product development lifecycle.  This integration of function pulls concept validation practices earlier in the cycle, thus allowing concepts to be more thoroughly vetted before they go to prototype.  The result is fewer prototype cycles which equates to lower costs and faster delivery.

Higher Product Quality
Another emerging trend is to couple innovation methodology with quality management to create a seamless, continuous feedback loop between design and quality functions.  The resulting closed-loop design for quality systems drive both higher customer satisfaction and lower defect liabilities.  This is meaningful for all manufacturers, but even more so for environments that are caught up in the trend toward performance-based-logistics contracts where lifetime maintenance costs are bundled in up front.

Better Right-to-Market Delivery
High Performance Innovation is all about getting the right product to the client when and how they need it.  Any given product has a natural window of revenue opportunity.  Late delivery means permanently lost and nonrecoverable revenue opportunity.  This is why innovation best practices revolve around identifying what innovations are right for the market and which will provide the best return on R&D funding, not just identifying what innovations are possible.

The bottom line is that while we might feel the pressure of time urgency and be tempted to say that we don’t have the time to employ innovation best practices, the reality is that we can’t afford not to invest the time.  Innovation disciplines are the solution, not the problem.

The Language of Innovation

Over on Innovation Ecosystem, Julie Fleischer touches on a favorite topic of mine in her post “What Language Do You Speak?”  The crux of this piece is that we all learn and master the language of our discipline.  That mastery, while a strength in our domain, is also a limitation because we tend to see the world through a filter formed by the language of our thinking.

This concept is very important for innovation practitioners.  The most innovative solutions come from applying concepts from outside of the domain of the problem being solved.  Yet, the solver is typically constrained by the language of the problem domain and thus precluded from seeing the truly novel solution.  This means that we must make a conscious effort to break free of our self-imposed blinders if we are to find truly innovative solutions.

Thank you, Julie, for reminding us of this important truth of innovation.

Innovation Insight

A recent post on Langdon Morris’ Permanent Innovation site reflects on “The Nature of Insight.”  Langdon concludes saying, “Insight is often instanteous [sic]; our attempts to communicate its nature necessarily take much longer.”  At first blush, this statement seems innocuous; yet, it has been niggling at me.  The reason that this statement bothers me is that it confuses the nature of the insight with the result of insight and in so doing helps perpetuate a harmful innovation myth.

In the article, the moment of insight—that time when one’s understanding and vision crystallize—is framed as the starting point of a process which continues with the purposeful articulation of the understanding that has been achieved through the insight.  Certainly, we have all experienced what is described.  That momentary flood of understanding which then requires a much longer time to capture and communicate.  But, the described moment of insight is not the beginning.  It is more properly the climax of a process that has been in motion for some time. 

The flash of innovation is the culmination of a process where conceptual connections are made.  Who has not seen the look that comes over one’s face when they see the solution before them formed by insight?  It is a very powerful experience whether you are experiencing the insight yourself or seeing someone else have the experience.

Recently, I was sitting with a very senior engineer and highly accomplished inventor.  He was looking at a problem that another division of his company had been struggling with for the past two years.  As he started to examine the problem, he applied structured innovation techniques to identify specifically relevant information about the product system he was examining.  When the tool he was using identified a particular aspect of the system, his eyes widened.  That moment of insight was upon him.  In that moment, the insight left him with a solution path.

But, the moment of solution was decades in the creation.  He had leveraged vast quantities of information and captured experience to identify the knowledge that was the essential catalyst for his flash of insight.  Without the ability to leverage collective knowledge and wisdom, he would never have been able to make the connections that were the basis of his insight.  This is at the crux of debunking the myth of innovation.

Innovations are rarely, if ever, without an antecedent.  This is a very important point for organizations wishing to foster an efficient environment for repeatable innovation.  Its importance lies in the implication that you can improve the quality and quantity of innovations if you can harness the right actionable knowledge and create the environment to support the information confluence needed for such insight events.

[Photo Credit: Jeff Hire]