Although managers might know that innovation is the only way to attain competitive advantage, they seldom know where to begin. Innovation is still a black box. Leaders don’t know where to start, how to build the necessary capabilities or even what they want to reach. The common definition of innovation being implemented ideas customers are willing to pay for doesn’t help much either. So how do start building innovation capabilities in your company?
I believe the first step to becoming more innovative is to have a common language and definition of what innovation is.
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Tagged as:
Innovation
I recently ran a series of innovation workshops at a major German IT company. The goals were to (1) raise the knowledge of innovation and innovation tools, while (2) at the same time developing ideas for innovations.
The project consisted of 3 major steps:
First senior management defined areas within which the organization should innovate. In a 2 day workshop we had a look at different types of innovation using the innovation map, what innovation could mean to the organization, and we developed an innovation roadmap. Senior management chose 4 areas to focus innovation efforts: (1) Products and markets, (2) Collaboration with the customer, (3) Future workplace, and (4) Effectiveness of the business, which was mostly about management innovations.
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Tagged as:
Action,
Innovation,
Workshop
I saw a presentation by Shaun Smith at the London Business Forum on his new book to be published towards the end of the year today.
Smith argues that a major shift is happening in business and society currently and that organizations need to become bolder, braver and more innovative to remain relevant. One can’t argue with that.
Although the ideas aren’t new (at least not to the regular readers of these pages) he had a couple of interesting examples to make his case. Let’s have a look. [continue reading…]
Tagged as:
Be bold,
Innovation
Some random thoughts:
- Put innovation (define the type of innovation you’re looking for) on the agenda
- Take and allow time for creativity and slack
- Encourage people to pursue ideas
- Make innovation a central topic of your training and development programs
- Allow for small scale experimentation. “Just do it.”
- Set aside resources for these experiments.
- Create and use diversity in knowledge, people and resources
- Identify your “innovation leaders”. Who’s in favor of innovation? Who’s particular innovative? Put them in charge of driving innovation throughout the company.
- Align reward systems: make innovation a part of top management’s bonuses
- Encourage risk taking
- Question everything
- Discuss innovation performance in strategy meetings
- Develop KPIs for measuring innovation efforts
- Open the strategy making process to allow for input from throughout the organization
What are your thoughts? How do you drive innovation within your company? Comments welcome!
Tagged as:
Innovation
Looking at the literature on the role of top management in innovation, one often comes across the instruction to create an organizational context enabling and driving innovation. But what does such a context look like? I went through about 100 articles and studies and summarized my findings…here they are.
First of all we have to look at the elements that constitute the organizational context and then look at the characteristics of these elements within strategically innovative companies and compare them to non-innovative companies. [continue reading…]
Tagged as:
Growth,
Innovation,
Organization
BCG’s latest innovation report identified the following 8 capabilities to be most critical when it comes to being innovative:
- Developing a deep understanding of customers and their preferences
- Partnering effectively with suppliers and others for new ideas
- Ensuring executive-level sponsorship of projects
- Enforcing timelines and milestones
- Earmarking sufficient funds for innovation projects
- Moving quickly from idea generation to initial market entry
- Balancing risks, time frames, and returns across an entire portfolio of projects
- Fostering a corporate culture that promotes innovation.
Apart from customer knowledge and executive sponsorship, which most companies see as their strengths, all other 6 capabilities are seen as weaknesses.
Tagged as:
Innovation
What are the objectives of your innovation efforts? When talking to executives about innovation or innovation initiatives I very often experience that the objectives are not clear.
To focus the discussion and make objectives clearer, I developed an innovation map featuring 4 prototypical innovation types.
Using the map not only helps to focus the discussion, but also serves as an evaluation tool to see whether innovation efforts are in line with the desired outcomes.
Use the map and tell me how it worked for you. Have a look at The Innovation Map on slideshare.
Thanks to Vincente Centelles for translating the map into Spanish.
Tagged as:
Innovation,
Management Innovation,
Strategic Innovation
Here’s a self assessment from “Innovation to the Core” by Peter Skarzynski and Rowan Gibson.
Do you have a core set of people, distributed throughout the business, trained in the tools, processes and protocols of business concept innovation?
Have you built a systematic process for continually generating and managing novel strategic insights, and for sharing them companywide?
Are you using all the available means to improve the quantity and the quality of new ideas – from inside, outside and across your organization?
Are you systematically innovating across all the components of your business model, or are your company’s innovation efforts primarily focused on products and technologies?
Are you using the right evaluative criteria at every stage of the opportunity development process, or are some potentially valuable ideas being killed off prematurely?
Are your innovators generating ideas that are sufficiently radical to deliver breakthrough performance, and is your company stimulating and encouraging them to do so?
Have you designed an “innovation architecture” that gives strategic coherence and consistency to your opportunity portfolio?
Have you built mechanisms for rapidly reallocating resources behind new opportunities, along with a robust innovation pipeline for managing and commercializing those opportunities?
Is your innovation pipeline capable of managing growth opportunities with very different timescales and risk profiles?
Are you dynamically balancing the supply of innovation ideas and the demand for innovation ideas inside your company?
Are you using a comprehensive set of metrics to measure innovation performance – including inputs, throughputs, and outputs – and are you linking it to management compensation?
Have you put the necessary systems, structures and processes in place to make innovation a self-sustaining enterprise capability and a tangible core value?
Tagged as:
Innovation
Last week I wrote that “management innovation” is about reinventing your management model. So what exactly is a management model? The management model defines what managers do and how they do it. So what do mangers do?
Peter Drucker once said management is “Getting things done through other people”.
This entails 3 elements: (1) things, (2) getting them done, (3) through other people.
(1) Things
So what “things” are we talking about?
What is it that managers try to achieve? What is the objective of management? On the highest level, it is to ensure the survival of the organization. Making money is a means to an end. To achieve long term survival organizations need to be able to adapt themselves to the changing environments (remember that fit Darwin wrote about?). They need to be resilient. They need to able to renew themselves and adapt to changing circumstances. Thus we could say that management is the task of making sure the organization adapts to a changing environment. To do so the strategy, organizational structures and processes, the culture and the people, or their skills, need to be constantly renewed, adapted and further developed to make them fit the new environment. Of course there are many different ways and theories on how to achieve this adaptation and renewal.
Survival needs 3 things. You could also say that the big objective of survival needs to be broken down to make it manageable:
- Strategic objectives: Build potential for future success. Enable the organization for future success. (The long-term view if you like.)
- Operational objectives: Exploit existing potentials and generate profits from them. (The mid-term view.)
- Financial objectives: Generate profits and cash to ensure liquidity. (The short-term view.)
(2) Getting them done
So how to get these things done? By coordinating and aligning effort and activities, and allocating resources and assigning talent. This is usually done by defining and implementing organizational structures and processes, controlling how well the objectives are achieved, and rewarding their achievement.
(3) People
Of course managers done do all of this on their own. (Even if some of them tend to believe they actually do. Some might also have that feeling because of the sheer amount of work. Or delusions of absolute power.)
People need to be hired, trained, developed,… Their efforts need to be aligned and most managers think that need to be motivated as well.
Of course this view looks at employees in particular. I would argue that not only the relationship to employees, but also to other stakeholders and shareholders need to be build and nurtured. Not only the employees’ demands need to be taken into account, but also those of these other stakeholders. And very often it’s not only about taking them into account, but also balancing them carefully.
All 3 elements entail a vast array of processes like strategic planning and execution, budgeting, project management, internal communications, hiring, training and development, business planning, knowledge management, periodic business reviews, employee assessment and compensation. (thanks to Gary Hamel for this extensive list).
When it comes to reinventing all these processes and management practice, it seems that, at least for the time being, engagement and involvement of employees plays a vital role. Companies move a away from tide controls from the top and the illusion of having everything under control. Organizational structures and processes become looser.
I suggest to start the processes by mapping out how you do and organize all these processes. How do you set objectives? How to do coordinate your employees? Once having outlined your management model, think about what you can change and what a radical departure from current practices looks like.
Of course this kind of reinvention of management relies on that 50 year old definition of Drucker! So how innovative can it be? It might be a first step leading to some new possibilities. But how radically different will they be? How far will they push the practice of management really?
I put forward a more radical idea: what if we reinvented the very notion of what management does altogether, instead of relying on that 50 old year definition? Watch out for future posts!
Tagged as:
Innovation,
Management Innovation
At the management innovation conference at Copenhagen Business School in early September academics and practitioners gathered to share their insights, challenges and research on management innovation.
A theme that emerged pretty soon was the discussion around what management innovation actually is. While some were requesting a definition and insisting on the need of a definition to be able to further research and develop this young field, others thought it sufficient to describe what the author of a paper meant by management innovation, so that papers could be clearly identified and clustered. Still a third stream argued that the field doesn’t need a definition at all and will benefit from multiple viewpoints. While this last approach might be helpful in academia it certainly is not in business. (At least from my experience. Feel free to comment.)
Businesses need a framework, a model, to think through the issues involved. Otherwise it is nearly impossible to make a decision or even just have a fruitful discussion. Without such a definition, the discussion will focus more on what it is we are discussing (just like it did in Copenhagen) instead of producing a tangible result.
So here’s my shot at defining “management innovation”. Consider it being a blend of academia and practice, my 10 cents and those of others. (And thanks again to all participants of the conference for their thoughts and ideas.)
- Management Innovation vs other types of innovation: What distinguishes management innovation from other types of innovation? Gary Hamel writes “Management innovation is anything that substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and, by doing so, advances organizational goals.” and further “…management innovation targets a company’s management processes (note: as opposed to business and operational processes) – the recipes and routines that determine how the work of management gets carried out on a day-to-day basis.” While Hamel seems to focus on reinventing how management works, Birkinshaw and Mol add that it also changes what managers do. “…it is about innovation in management principles and processes that ultimately change the actual practice of what managers do, and how they get it done. It is different to operational or process innovation, which is about how the actual work of transforming inputs into outputs, gets done.” They also note that management innovation has to be undertaken to further the company’s goals.
- Theory vs practice: The qualify as a management innovation the idea you might have, needs to be put in practice. The idea is nothing, action is everything. Management innovation leads to new management practices.
- Incremental vs radical: At the moment web 2.0 tools are becoming popular among organizations. Usually these initiatives start as an experiment before being implemented on a larger scale throughout the enterprise. According to Prof. Birkinshaw of London Business School this is also the case with management innovation. Many practices that might seem radical when looking back started with small, incremental experiments, often only in one area of the company, before being rolled out and adopted by others.
- Adoption vs new to the world: By definition an innovation is something new. And it is something new to the world and not only a company. Reinventing the wheel or using the wheel just because somebody else does, does not count as a management innovation. We have already a name for such a practice: it’s called “benchmarking” and adopting “best practices”. It doesn’t help us at all if we start giving the same thing a new name, just because it’s more sexy to talk about “innovation” than “best practices” at the moment. That’s old wine in new bottles. Management innovation has to be new to the state of the art! Period.
Have a look at my innovation map for further differences to other types of innovation.
Management innovation targets management processes, practices and tools. It changes what management does and/or the it gets done. So what does management do? This is defined by the company’ or manager’s “management model”. So “management innovation” is “management model innovation” if you like.
Next week I’ll explore the idea of “management model” a bit further and we’ll have a look at the CEO of Lego’s management model. So be sure to check back.
Tagged as:
Innovation,
Management Innovation
