What is Innovation Management for?
HEC Business School with the help of Act One has completed a study on Innovation Manager position in large companies. I’ve picked up some elements to feed this 3rd episode of innovation at large companies:
- Innovation overlaps other corporate functions and especially Marketing, R&D and Strategy;
- Its main objectives are to create growth and to differentiate the company on its market;
- Innovation creates the conditions for collaboration throughout the company;
- Its ambition is to create a sustainable culture of intellectual mobility within the company, that integrates all employees, in order to transform ideas into competitive advantages;
- It is still facing many resistances, particularly the misunderstanding or reluctance of middle managers;
What obstacles faces Innovation Culture?
The paradox of innovation is that it is at the same time vital for the company in terms of growth relay and differentiation, and very upsetting at it impacts a whole set of items in the company:
- Vertical organization has to adapt to transversal collaboration and crossfunctional teams;
- Culture has to open to interactions outside the company;
- Innovation requires “a big picture” overlapping with various functions;
- Knowledge circulation as a fundation for rapid innovation and contribution with new ideas have to become a reflex for all employees.
This is the reason why for Vijay Govindarajan, there is no doubt: “Innovation cannot happen inside the performance engine, so it requires a dedicated innovation team”, which implementation guide we have described in “Implementing a rapid innovation entity“.
Innovation entails change
But innovation can be seen as a change management processus: adopting a new idea down to commercialization is not a natural path of day to day activity; to engage the company in an innovation, you nee to create necessity for change.
In this difficult mission, HEC study shows that innovation managers faces 3 obstacles, experience, territories and understanding:
- Innovation managers have recently been appointed and are currently still in progress regarding methods;
- They have important means of training and information and rely on external consultants for this;
- They read and use the Internet through social media more than other executives, and recommend their use;
- Few innovation managers are members of Executive Committees, while most of them aspire to;
- The main challenge mentioned is the support from Top Management and middle managers;
- Performance indicators are still to be defined both personally and for their departments.
Don’t stay isolated
Paul Hobcraft also read the HEC study and he says: “the Corporate Innovation Manager is stuck in the middle. HEC’s study paints the IM into a corner and certainly not in the corner office!”. He deeply regrets it: “If the IM is consigned to this role- managing the process, innovation will never rise up fully to the top of the organization, and never achieve the necessary daily ongoing dialogue in and around the board”.
It seems that Innovation Manager would be an updated position for Project Officer Manager! Paul believes IM has “a role of advocacy, supportive and a real broker of innovation knowledge that helps others in their roles, following a clear roadmap toward agreed measurements.”
Require Innovation goals
Innovation manager should be position at the top level, as direct report of CEO, if the company wants to make innovation one of his actual top strategic priorities. In rapid innovation implementation guide, we have suggested not only that the innovation entity should ensure direct report to CEO, but also that boosting innovation is a strategic priority transferred in tangible innovation objectives across core co:
- 25% of products sales have to come from new products, products which did not exist 5 years ago, was the objective set by 3M CEO;
- 50% of innovations has to include innovations coming from outside the company was the target claimed by P&G CEO;
- innovation portfolio has also to be carefullly managed and displayed: as a mirror of innovation priority, it should include a set of disruptive innovations with corresponding investment.
Spread Innovation virus
Once the innovation task force is firmly settled, in addition to look for and support successful symbolic projects on the short term, it has to define a strategy to spread innovation virus. By all means, innovation must not stay as an isolated island! Various levers are available:
- Idea improvement program: innovation idea helpers, office of innovation, center for creativity and innovation;
- Start-up program: all employees can generate idees, go to funding selection comittee, prototype in 2 months, then show to customers and test employyes in another month.
- Social innovation through empowerment, cocreation and crowdsourcing innovation: “3M Bootleg rule” = 15% free time to personal innovation, analog rule at Google based on 20% free time, innovation tournaments, 72-hour IdeaJams, knowledge reuse, and Global’s Idea Hub, Web 2.0 as an innovation pathway;
- Culture of innovation: creating a sustainable culture of innovation, handling “the four currents of innovation culture“.
Balance Innovation speeds
Instilling innovation culture can take time. At Whirlpool, a case study decrypted by Gary Hamel , “innovation from everyone, everywhere” took 5 years. It is based on following demanding pilars:
- Making innovation a central topic in Whirlpool’s leadership development programs;
- Setting aside a substantial share of capital spending every year for projects that meet a certain tough standard of innovativeness;
- Requiring every product development plan to contain a sizable component of new-to-market innovation;
- Training more than 600 innovation mentors charged with encouraging innovation throughout the company;
- Enrolling every salaried employee in an online course on business innovation;
- Establishing innovation as a large part of top management’s long-term bonus plan;
- Setting aside time in quarterly business review meetings for an in-depth discussion of each unit’s innovation performance;
- Building an innovation portal that grants Whirlpool’s employees all over the world access to a compendium of innovation tools and data on the company’s global innovation pipeline;
- Developing a set of metrics to track innovation inputs, throughputs, and outputs.
Because time to implement innovation culture and framework all over the company can be too long for competitive markets, rapid innovation model is a parallel path which makes sense.
Innovation management has achieved its goal when “the idea that innovation is not here to prevent people from doing their job is commonly shared and that they understand it is a resource” says HEC verbatim. I would add: “and when people have a natural desire to provide their personal contribution to innovation, when everyone has become an innov’actor.”