5 Keys to Innovation Your Business Needs to Succeed

Most organizations recognize the importance of innovation in advancing their competitive position or improving their business processes. However, many may not recognize that successful innovation is built on a framework of component functions, each of which is critical to the overall efficacy of the program. These functions, known as innovation framework components, individually define specific characteristics of the program and collectively describe the organization’s posture toward innovation.

One of the most basic elements of the framework, frequently overlooked, is the definition of innovation that the enterprise wishes to adopt or define for itself. This can (and probably should) vary dramatically from enterprise to enterprise. From the foundational definition of “a new idea, method or device” (Webster Dictionary), to “a change that creates a new dimension of performance” (Peter Drucker, leading strategy innovator) or the more action-oriented, simple but meaningful “idea applied” (we like this one a lot), each enterprise needs to create its own definition that is aligned to the objectives that their innovation program is targeting.

But the term’s definition is clearly not enough and is only one of the elements of the overall framework that companies must assess and customize to their individual challenges, objectives, operating model, and culture. Some of the other critical components include:

1. Strategy – Alignment is key

Every enterprise defines its own value chain within the market and develops strategies to execute within that value chain. Innovation plays a role in this strategy and ideally enforces it with contributions that enhance the company’s competitive position or improves its internal effectiveness.  The enterprise must target its innovation resources to align with its overall strategy. It needs to communicate clearly its challenges and articulate objectives for the solutions it is seeking, so that enterprise resources can focus on delivering innovation targeting those specific objectives. Within the strategy framework pillar the company has to define success criteria for innovation across time as well as the criteria for idea selection and program governance. Innovation strategy development falls on the shoulders of executive leadership.

2. Process and Tools – The foundation for success

Innovation processes and tools must rise to the level of the innovation itself. A suggestion box won’t work. Because innovation contributors are naturally resistant to inefficient and arcane interaction tools, this aspect of the framework is ultra important to get right. Investment in the right solution yields substantial results, a high level of participation and with it, large pools of idea contributions. AT&T, for example, operates one of the largest (with over 120,000 active participants) innovation crowdsourcing platforms and operational systems called the Innovation Pipeline (or TIP). If implemented internally, the development of such processes and tools is best addressed by company’s innovation resources (e.g. within the CTO organization), not by the Project Management Office (PMO). Alternatively, it can be sourced from trusted partners who can integrate the tools and processes in a way that meets the company’s specific innovation goals.

3. Inducement – A call for leadership

Participation in innovation is key to its success; mass participation is nirvana. Crowdsourcing has proven invaluable to solving extremely complex problems precisely because of the cumulative effect of mass ideation. Methods to induce participation vary dramatically across company cultures, but two of the more effective approaches include broadly publicized contributor recognition (with or without financial reward) and an opportunity by the contributor to participate in the execution of the idea throughout its lifecycle. Company leadership, including areas of the HR organization, has a critical role to play in developing and managing this framework component.

4. Culture – New behaviors and attitudes

The belief system within the company is the component most resistant to change. In all likelihood, the behaviors and attitudes that prevail have developed over an extended period of time, likely across several management chains and have been documented to produce certain predictable, albeit unremarkable results. Change in culture necessary to support peak innovation effectiveness will in most cases be highly disruptive to the organization and will cause discomfort and possibly displacement. Aspects such as intolerance of failure, “CYA” tactics, group-think behavior and hyper-individuality are cancers working against an effective innovation culture. All need to be uprooted without demoralizing the entire organization. This challenge can only be addressed by a leadership team with a visible and artfully communicated commitment to the changes they are championing.

5. Collaboration –The value of connections

Enterprise innovation must develop connected relationships with external sources of ideas and know how to avoid the “not-invented-here” pitfall. The most valuable external resources include customers and their corresponding centers of innovation, but also suppliers, partners, academia, and the general developer community. For organizations which accept radically open innovation (Gartner Maverick Research – Radical Openness, September 2012 [registration required]), partnerships can extend to virtually all segments of the industry and all willing participants, including virtual “innovators for hire.” Developing and managing these partnerships most often is best facilitated through special-purpose teams organized specifically for this mission. For example, AT&T has created a Foundry organization to support this framework pillar.

Innovation is considered to be a natural product of interactions among highly creative people. Whereas creative contribution is an important component in the overall effectiveness of a program, in and of itself it is not enough to assure the program’s success. In fact, an argument could be made that it is even secondary to a well executed set of component activities within the overall innovation framework. On the scale of an enterprise, management expects results from an innovation program to have a significant amount of predictability. An innovation program can only deliver predictably consistent results when it is managed against a well designed program framework that is aligned with the company’s objectives to harvest and apply innovation.

Contrary to common perception, process is not the antithesis of creative innovation, but the glue that holds it together and gives order to the random and unstructured ideas that continuously erupt within the enterprise. A well architected enterprise innovation program built on relevant, enterprise-aligned framework component processes greatly increases the probability of achieving meaningful results and the overall program’s success.