Build an Innovation Engine in 90 Days
22 January, 2015 / Articles
Practically every company innovates. But few do so in an orderly, reliable way. In far too many organizations, the big breakthroughs happen despite the company. Successful innovations typically follow invisible development paths and require acts of individual heroism or a heavy dose of serendipity. Successive efforts to jump-start innovation through, say, hack-a-thons, cash prizes for inventive concepts, and on-again, off-again task forces frequently prove fruitless. Great ideas remain captive in the heads of employees, innovation initiatives take way too long, and the ideas that are developed are not necessarily the best efforts or the best fit with strategic priorities.
Most executives will freely admit that their innovation engine doesn’t hum the way they would like it to. But turning sundry innovation efforts into a function that operates consistently and at scale feels like a monumental task. And in many cases it is, requiring new organizational structures, new hires, and substantial investment, as the “innovation factory” Procter & Gamble built in the early 2000s did.
For the past decade we’ve been helping organizations around the globe strengthen their innovation capabilities, and that work has taught us that there’s an important intermediate option between ad hoc innovation and building an elaborate, large-scale innovation factory: setting up a minimum viable innovation system (MVIS).
We borrow the language for this term from the world of lean start-ups, where “minimum viable product” denotes a stripped-down functional prototype used as a starting point for developing a new offering. “Minimum viable innovation system” refers to the essential building blocks that allow a company to begin creating a reliable, strategically focused innovation function. An MVIS will ensure that good ideas are encouraged, identified, shared, reviewed, prioritized, resourced, developed, rewarded, and celebrated. But it will not require years of work, fundamental changes to the way the organization runs, or a significant reallocation of resources.
What it will require is senior management attention—most critically from some member of the top leadership team. That might be the chief executive officer or a chief innovation officer, but it doesn’t have to be. If you’re responsible for innovation in your company at the highest level, we’re talking to you. With a little help from other executives and innovation practitioners, you can set up an MVIS by completing four basic steps in no more than 90 days, with limited investment and without hiring anyone extra. And as early success builds confidence in your innovation capabilities, it will set the stage for further progress.
Day 1 to 30: Define Your Innovation Buckets
There’s no shortage of terms for innovation. Sustaining innovations, incremental innovations, continual improvement programs, organic-growth initiatives. Disruptive innovations, breakthrough innovations, new-growth initiatives, white-space and blue-ocean strategies. But strategically speaking, all innovations fall into one of two buckets. In one are innovations that extend today’s business, either by enhancing existing offerings or by improving internal operations. In the other are innovations that generate new growth by reaching new customer segments or new markets, often through new business models.
The MVIS encompasses both types of innovation, but it’s critical that everyone involved in an MVIS (or any innovation program) understand the difference between the two buckets. The failure to do so causes many companies to either discount the importance of innovations that strengthen the ongoing business or to demand too much revenue from the new-growth initiatives too early. Agreeing on what to call the two buckets is a good starting place. For the purposes of this discussion we’ll call the first one “core innovations” and the second “new-growth innovations.”
Innovation projects meant to strengthen the core should be tied to the current strategy and managed mostly within the main business’s organizational structure. (The MVIS will keep track of them, though, as you’ll see later on.) They’re the projects expected to offer rapid and substantial returns in the near future and need to be funded at scale.
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