Is Your Company Ready For Innovation?

  • Strategic Guidance: Leaders must provide innovation teams with a clear innovation strategy that makes explicit where to play. This strategic guidance should not be vague or known by only a few people within the organization. Leaders must provide clear guide rails for the majority of innovation projects to be aligned to.
  • Resource Allocation: In a lot of companies, there are no official resources for innovation that are set aside and protected. Instead, intrapreneurs have to hustle and scrape for resources that can be pulled from them at any moment. Leaders need to make sure that they are allocating budget, time and resources that are protected from encroachment by the core business.
  • Portfolio Management: Innovation cannot flourish if the leadership are exclusively focused on running and improving the core business. Instead, leaders need to be actively involved in making investments to explore future opportunities for growth. These investments in innovation need to take the form of many small bets that gradually increase for a smaller number of teams that show progress and success.
  • Legitimacy And Power: Does innovation show up in your organizational chart? Is there an innovation career path within your company? Or is innovation career suicide? If innovation teams have to constantly fight for their right to exist, then innovation has little legitimacy or power within your company. While being a pirate might be fun, innovation is more sustainable when it is an explicit part of our institutional structures.
  • Bridge To The Core: It is often difficult for innovation teams and the core business to collaborate. In fact, there can be a conflict for resources, which the core business inevitably wins. As such, we need clear policies that help innovation teams collaborate with the core business. This can be particularly helpful when it is time to take new innovations to scale.
  • Rewards And Incentives: Most companies manage innovation using the same rewards and incentives systems as the core business. The annual targets and review process for bonuses makes it difficult to celebrate failure. Innovation needs to have a dedicated incentives system that is different from that of the core business.
  • Innovation Tools: Companies need to adopt the right tools for designing business models and testing assumptions. Adopting agile development, business model, lean startup and design thinking tools will help facilitate the innovation process. This is a toolbox that most practitioners now agree works well for innovation. These tools need company wide adoption, rather than adoption in small pockets of the company.
  • Process Management: In order to release funding and resources, most companies require innovators to write long business plans with five year financial projections. This process for making decisions does not work well for innovation. As already noted, innovation teams need to adopt iterative methods for testing and reducing risk. In line with this best practice, our processes for managing innovation should be optimized to systematically track and measure how well teams are reducing the level of risk in their new ideas.
  • Skills Development: It is a myth that entrepreneurship cannot be learned. It is possible to develop and train innovation skills within our teams. Beyond training, we also need to give people the experience of working on and running innovation projects. Such skills training should be provided across the whole organization, including people in departments such as HR, finance and compliance.

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