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SoapBox Overview of Innovation Management

This is a comprehensive table of contents organized in a question and answer format of the best SoapBox and non-SoapBox content on innovation management.

Innovation Management Table of Contents:

Defining Innovation

  1. What is the best definition for innovation?
  2. Why is it important to define innovation specifically for your organization?

Innovation Management

  1. What are some of the different types of innovation?
  2. Where do good ideas that lead to innovation come from?
  3. Is there a best approach, or general approach, that every organization should take?

Key Ingredients for Successful Innovation Management

  1. What role does leadership need to play in fostering innovation?
  2. What are some of the barriers to successful innovation?
  3. Can large organizations successfully innovate?

SoapBox favorites on innovation management

  1. 10 Best Harvard Business Review (HBR) articles on innovation – This post keeps an up to date list of our favorite posts on innovation appearing in HBR.
  2. Innovation Excellence – The online home of the global innovation community, building upon a rapidly-growing network with thousands of members from over 175 countries – thought leaders, executives, practitioners, consultants, vendors, and academia representing all sectors and industries. Their mission is to broadly enhance innovation by providing a forum for connection and conversation across the community – assembling an ever-growing arsenal of resources, best practices and proven answers for achieving innovation excellence.
  3. The Innovation Enterprise – Specialized on enterprise innovation. Their goal is to connect industry leaders across the business spectrum, from leading Fortune 500 companies to disruptive and exciting new startups, facilitating the sharing of ideas through webinars, articles, white papers, and on-demand video content.


What’s the best definition for innovation?

Use of the term innovation has exploded. As a result, it gets used in so many different contexts that its meaning has become diluted. In a survey of literature on innovation, Edison et al found over 40 definitions.

In the context of what you’re trying to accomplish at your organization, it likely does not matter if there’s a universal agreed upon definition. However, there are some important elements that should be called out. These are the key pieces of the puzzle to put together. For innovation to exist, it must be a new idea that gets executed and creates value.Innovation DefinitionWhile the first two are obvious, the last may be a little less so. If it’s not creating value for your organization, you have an invention but not an innovation. The executed idea must also create success in the marketplace.Invention-vs-InnovationJim Balsille, the former founder and CEO of RIM, contrasted invention with innovation. We think this is one important distinction to get right in the definition. “Science and technology are what universities do. That’s invention. Innovation is getting money for ideas. When we confuse those buckets, innovation gets diluted.”

You can read more about the breakdown of these key elements in our post on “What Innovation Actually Means”. But to summarize, the most important thing to understand is that innovation entails creating value. It’s easy to get caught up in where you’ll get great ideas from. The more important element is how you translate those ideas into value.

For that reason, the best definition for innovation is specific to your organization. Where do you need to create value that will differentiate you from the competition?

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Why is it important to define innovation specifically for your organization?

If the focus of innovation is to create value, then it will be very specific to how your organization creates value. Because innovation has become over-used and its meaning diluted, it makes a lot of sense to spend some time and effort being very specific about where and how you’re looking to create value. What is going to differentiate your organization, product or service in the marketplace?

In an interview with Steve Woods, Co-founder and CTO of Eloqua and now Nudge, he articulated the need to be focused on what you are and are not going to innovate.

“Once you have a clear vision for what you’ll reinvent, you need to get focused and put your energy and resources into making that one thing really stand out and be amazing. That means you need to be very disciplined about what you are not going to reinvent. Companies that are successful in reinventing one area can be tempted to reinvent everything instead of focusing on that one area. This is a dangerous path. You’ve got to have the humility to say “in this area, we are not reinventing, we are just going to do it very well”. It means that you’ll leverage the current, leading technology in that area but not trying to create a new way of doing that task. I spend a lot of time ensuring that the entire team has a shared sense of where our focus is for innovation, and where our focus is not.”

You can read the full interview to get all Steve’s thoughts on disruptive innovation at both small and large organizations here.

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What are some of the different types of innovation?

There a four ways to categorize types of innovation:

  1. What you want to innovate (see ten areas you can choose to innovate and differentiate your organization)types of innovation
  2. The types of ideas you’ll want (disruptive ideas or incremental improvements)
  3. Where you want ideas to come from (inside the company or externally from partners, suppliers, or customers)
  4. Who is included in the process (small team of experts or crowdsourcing)

Depending on how you answer these questions, you will end up with different approaches to driving innovation. For example, Milliken & Company, a U.S.-based textile company, has an idea system that has consistently averaged around 100 implemented ideas per person per year. Milliken Denmark translated this focus on improvement to their looms, each of which had several hundred small ideas applied to it. These small ideas collectively made them two to three times faster than they were designed to operate, and capable of making special weaves that their manufacturers had thought were impossible. Competitors could easily buy the same models of loom but would find it much more difficult to come up with all of the ideas that would be needed to match this performance. The focus for innovation here is on small actionable ideas, sourced from internal employees on a continuous basis focused on improving the product (types of weave) and the process (speed).

Incremental-Innovation

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Where do good ideas that lead to innovation come from?

The myth of innovation is that brilliant ideas leap fully formed from the minds of geniuses. The reality is that most innovations come from a process of rigorous examination through which great ideas are identified and developed before being realized as new offerings and capabilities. ~ Tim Brown, Change By Design

The content below is summarized from a longer post we wrote, “Where Do Good Ideas Come From?

One of the most important things is to get the question right. Mihaly Csikszentmihalyi is one of the most referenced researchers on the topic of creativity and flow. One of the things he studied was how Nobel laureates and other creative people achieved their breakthroughs and discovered something interesting. He found that once they asked themselves the right question, their ideas flowed rapidly.

Another key element is that good ideas tend to form slowly over time. The ideation process is actually a combination of reflection time and connecting with others to share ideas. Combining ideas, building on ideas, and critical feedback are important elements of good ideas. In Steven Johnson’s book, “Where Good Ideas Come From: The Natural History of Innovation”, he covers this in detail dating all the way back to the invention of the coffee house. You can get an overview of the key points from the book from his TED Talk. There’s also an even shorter animated video on YouTube.

We learn how to come up with innovative ideas from prior success. Because there’s so much that happens to an idea from the time it’s shared to the time it’s executed and then providing value and can be called an innovation. It requires some forethought to the constraints and organizational realities the idea lives within. Every time we share an idea that gets executed, the likelihood that future ideas also get executed goes up. In one study, by the sixth successful idea, the likelihood that new ideas would be executed went up to 50%.

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Is there a best approach, or general approach, every organization should take?

There is no single best approach to innovation management. We like to think of innovation management as managing a portfolio of innovation strategies.

Train a few individuals on design thinking to approach more radical reinvention of product or process. The blog “Design Thinking” is a great resource. The author, Tim Brown, is the CEO of Ideo, a global design firm that helps companies come up with novel new designs. He wrote the book “Change By Design” and is one of the top experts on design thinking.

Much has been written about open innovation, the process of bringing in external ideas and technologies to the firm’s own innovation process. With a concerted effort in the right places, this makes sense to include as part of your strategy.

There are also more focused ways to innovate. Like frugal innovation, which looks not at adding to a product or service, but how you can take away from it and strip it down to open up new markets. Inexpensive cellphones sold in emerging countries are a great example of this type of innovation.

Two things that we do strongly believe need to be part of every organization’s innovation management strategy is a strong bias towards action and a way to include every employee in the effort.

In our post, “Stop Innovating, Start Getting Stuff Done“, we zero in on the focus for not just ideation, but on getting ideas implemented that create value.  We also push the envelope on urging organizations to ramp up their focus on smaller ideas. While big, bold ideation should be part of your innovation strategy, there are three reasons that a focus on small ideas should also be part of it.

First, large ideas take time, resources, and are considerably riskier. Time to value is significantly increased. The payoff is potentially huge and there are upsides to risk, but there’s also a significant amount of opportunity in many, smaller, innovative ideas. Second, studies show that a bias towards action tends to outperform a ‘pick the best, biggest idea’ approach. In one example, hospitals trying to improve patient care that focused on implemented known solutions to known problems had more improvement than hospitals that analyzed the biggest opportunities and implemented projects to improve. Third, going through the process of ideation, implementation and creating value repeatedly builds this muscle organizationally allowing an organization to innovate faster and more successfully as time goes.

Second, studies show that a bias towards action tends to outperform a ‘pick the best, biggest idea’ approach. In one example, hospitals trying to improve patient care that focused on implemented known solutions to known problems had more improvement than hospitals that analyzed the biggest opportunities and implemented projects to improve.

Third, going through the process of ideation, implementation, and creating value repeatedly builds this muscle organizationally, allowing an organization to innovate faster and more successfully as time goes on.

The second component we believe strongly should be part of every organization’s innovation strategy is an effort to include all employees. This moves innovation from small team to the whole team and builds a culture of innovation within the organization. There are other significant benefits to this approach. The most important of these being that it engages everyone across the organization in key priorities. Getting involved and co-creating something increases commitment and buy-in. For example, if part of your value proposition is to differentiate your company based on customer experience, then having everyone committed to the cause and contributing increases motivation on this key priority. Viceroy Hotels and Resorts is using this approach to provide an amazing guest experience at its luxury properties around the world.

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What role does leadership need to play in fostering innovation?

Leadership plays perhaps the most important role in fostering innovation. According to the Center For Creative Leadership, “Studies have shown that 20% to 67% of the variance on measures of the climate for creativity in organizations is directly attributable to leadership behavior. What this means is that leaders must act in ways that promote and support organizational innovation.”

Some of the key things leaders need to do to encourage innovation are:

  • Show a positive attitude towards new ideas and approaches
  • Remove obstacles and clear red tape to ensure idea programs receive the attention, resources, and staff that they need
  • Link innovation to core organizational missions and strategies
  • Celebrate innovation efforts and successes
  • Neutralize negativity and create an environment that has a tolerance for risk and failure
  • Lead by example by participating in idea generation, evaluation, and feedback

You can get more detail at The Importance of Leadership in Innovation.

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What are some of the barriers to successful innovation in an organization?

According to a survey to innovation leaders completed by the Boston Consulting Group, the top four reasons why innovation programs fail are:

  1. Risk-averse culture
  2. Long development cycles
  3. Difficulty selecting the best ideas
  4. Difficulty measuring the performance of an innovation program

Fortunately, there are strategies you can leverage to overcome these barriers.

Risk averse culture: Too often, risk is seen as negative. It’s a potential downside that should be avoided. The conversation on the upside of risk is missing. To address a risk-averse culture, make sure the right people are part of balanced conversations about the downside AND upside of risk. We talked to Ted Graham, who led innovation at PwC Canada and is now at GE leading their open innovation program. Ted talked about the importance of working with leaders to help them redefine how they view risk within the organization. We also wrote a full perspective on our thoughts on risk and innovation. Where it comes from and how to balance the positives and negatives of risk.

Selecting the best idea and long development cycles: At SoapBox, we see these barriers as somewhat intertwined because we see ideas and innovation on a spectrum from incremental through to major projects. Business process ideas or new products ideas need different approaches for selecting ideas and different approaches to project management. So, depending on which types of innovation you’re looking to drive, you’ll want to employ a different innovation strategy. However, we believe you should also have a separate strategy for fast ideas and a bias towards action. We fully explain our thoughts on this in two posts: Leapfrog Disruptive Innovation and Stop Innovating, Start Getting Stuff Done.  There are research and case studies that clearly show that there’s a huge potential improvement from empowering your organization to act quickly on small incremental improvements. Your ground game for driving innovation that drives results should be based on a proper employee idea program. This takes pressure off finding the diamond in the rough ideas and avoids costly development cycles.

Difficulty measuring the performance of an innovation program: Without a doubt, measuring the performance of an innovation program is hard. For large, high-visibility projects, it’s likely that the right measurements are taken into consideration. But how do you measure a broad innovation program, with many incremental ideas effectively? For example, one challenge is how do you account for ideas that influence an existing project, but was a net new idea? This is something we explore in our post on sourced vs. influenced ideas.

To start, our advice is to focus on those things that are easily measurable. Focus on how you’re measuring performance against the business objectives you’re trying to impact. This requires spending time aligning the employee idea program with your business strategy. Driving improvements in customer experience, for example. The second area is to focus on measuring performance through adoption. Ideas, participation rates, ideas acted on, etc. These are all metrics that an idea management software program will easily track and provide reports on. While many of these metrics are leading indicators, we’ve found and studies prove that focusing on adoption provides better results. In an extensive review of research into employee suggestion systems, we found that programs that prioritized participation, the number of ideas and number of ideas acted on, significantly outperformed programs that focused on finding big ideas and measuring those.

For more detail on the above strategy, read our post on why innovation programs fail.

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Can large organizations successfully innovate?

For sure, managing innovation at a big company is different. While this may be a bit of an over-simplification, we often see three approaches that are successful when they are well executed. Best strategies for managing innovation in a large organization.

Create a startup within an established business

Google’s X.Company (the moonshot company) and Nespresso (Nestle) are two examples of larger companies that formed startups through their existing businesses. For a large enterprise to develop disruptive new products, services, business models or routes to market, it helps to create some separation from the main business. The ‘disruptive’ business should employ different people, operate different budgets, and potentially work in a different building or use different technology stacks. This gives the freedom to try new things and avoid crossover between a proven concept and a new, highly risky, unproven concept.

Have a dedicated team driving innovation across the business

Corporate innovation efforts at large companies often lack a clear mission and framework. To fix this, organizations created teams tasked with leading innovation strategy, culture, and processes. The Chief Innovation Officer was born. To better understand this role, Ted Graham suggests implementing these activities to drive success:

  • Spend the time and energy to determine which problems are best solved using an innovative approach and resist the urge for “we need that too” innovations.
  • Look outside your organization for inspiration. Ted visited incubation centers, sat in on angel pitches, and set-up one-on-one meetings with venture capitalists to stay on top of trends.
  • Force yourself to run a pilot at least once a year.
  • Help key leaders across the organization redefine the paradigm for risk and reward.

Make innovation everyone’s job

While the first two strategies focus on disruptive innovation, the last focuses more on incremental innovation, which is basically just a fancy way to say always keep improving. In our post, “Stop Innovating, Start Getting Stuff Done”, we spell out our belief that execution and a bias toward action at every level of the organization are the powerhouses of progress and performance improvement. According to “The Idea Drive Organization”, up to 80% of an organization’s potential performance improvement lies in frontline ideas.The two most common ways to facilitate this are the employee suggestion system and brainstorming. And in both cases, the difference between just doing it and doing it well is massive. Well-run suggestion systems have more than 4x the adoption of average suggestion systems and many multiples the number of ideas and bottom line impacting innovations. A well-facilitated brainstorming session will produce up to 30x more ideas.

To do it well, organizations need two things. First, a culture where leaders seek employee input. Second, the right technology to help manage the process.

A few things are important in that process:

  • Accountability
  • Feedback Loops w/ Participants
  • Duplicate Ideas Detecting, Filtering, Managing
  • Analytics and Tracking of ROI

best-strategy-quoteWithout having the above, you can actually do more harm to your innovation culture at your organization. Employees will start feeling like their ideas don’t matter or that the organization doesn’t care about them. We’ve seen letters of “disengagement” being sent to CEOs after launching campaigns such as the above and not following through.

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About SoapBox

SoapBox Innovations creates software that helps organizations give employees a voice. Whether your focus is on collecting feedback or soliciting ideas, we make it easier to act on employee input that drives real business value.

 

Harness the power of employee ideas.

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