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Organizational Innovation
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Innovation Network
- O r g a n i z a t i o n a l _ I n n o v a t i o n -
Thomas Kuczmarski
You can recognize a company with an innovation mindset by the way employees interface with each other. They treat each other with respect, admiration, and cooperation. They smile. They laugh. They express consideration and thoughtfulness to each other. They listen. They focus on the benefits desired by consumers rather than on their own personal gain. They come to work with an optimistic enthusiasm because they believe that what they do each day really does count. They focus on the future rather than on the past. They exude self-confidence, possess a healthy self-esteem, and believe in their own capabilities and strengths. They have faith in innovation and in each other.
An innovation mindset is an attitude that should be adopted throughout an organization by virtually every employee, from the CEO to hourly workers. While a mindset has to exist in individuals, it can spread and be adopted and nurtured by others. It is a pervasive aura which has a spirit of its own. This mindset stimulates and motivates individual employees, as well as teams, to holistically endorse a belief in creating newness.
The following ten insights are the foundation of an innovation mindset.
1. Failure is an intrinsic part of innovation. Successful new product companies understand this, and promulgate an attitude that allows risk-taking to take place. Mistakes need to be made and tolerated. This willingness to accept some failures will inculcate far greater confidence in development participants and, over time, generate higher financial results.
2. Companies that have a new products strategy in place are more successful. By identifying the financial goals, strategic roles, and screening criteria that new products should satisfy, innovation is positioned within a strategic and business context. The new product initiatives underway have a strategic anchor that steadies them and grounds them in business reality. The new products strategy links innovation efforts to the long-range plan for the business. Goals are complementary to each other -- not in conflict between the existing business and new product objectives.
3. Using multi-functional teams with dedicated team members is a critical requirement for success. You can't develop radically new products while simultaneously putting out fires on the existing business. The opposing pulls of responsibilities between new products and the existing business will result in new products playing second fiddle. You need people who can focus on, become immersed in, and be surrounded by innovation. This way, they have the time, concentration, and motivation to develop an innovation mindset.
4. A systematic, well-defined and commonly understood new product development process is a given -- not a differentiator for -- successful innovation. Without a widely accepted step-wise process, don't even attempt to undertake innovation. However, even with a process, there are many other variables that drive innovation effectiveness. Process is a necessary enabler, but alone it just won't do it for you.
5. Compensation incentives which simulate an entrepreneurial environment are more apt to motivate participants on new product and innovation teams. Enabling new products people to win big or lose big, depending on the financial performance of new products, provides a financial motivational factor. Many different types of incentives can work.
6. Top management commitment is the cornerstone of successful innovation. I've seen this factor alone be the tie-breaker between success and failure. There are three ingredients to top management commitment: (1) allocating adequate financial resources including R&D and technology funds, and assigning some of the best people to new products; (2) a perspective and mindset that allows for failures, mistakes and a long- term payback from the investments being made into the innovation "bank;" and (3) an expressively pro-active, positive, and "can-do ... I believe in you" attitude.
7. Companies that are successful innovators keep track of their results and know how much bang they are getting from their innovation bucks. They monitor and record success rates, investment levels, survival rates, financial performance and returns from each new product launched as well as the total portfolio of new products. They stay on top of new product expenditures and assess their returns on innovation.
8. Developing a portfolio of new product types helps diversify risks and provides a balanced investment approach to innovation. Over a four to five-year time period, a company should aim to have at least one-third of their new product successes be new-to-the-world, truly innovative new products. There is a natural tendency to do the lower risk, new product types. But over time, investing in a "diversified" new products portfolio increases the risk-return ratio.
9. Companies must begin the new product development process with consumer or customer "problem identification" and "need intensity" research. Don't start the development process with idea generation. The "right" approach to making innovation happen is to view it as creative problem solving -- not blue-sky ideas brainstorming. The difference is distinct. By taking a look first at consumer-identified problems, hassles, gripes, complaints, and unmet needs, idea generation can then be aimed at creating new solutions to resolve, address or improve them.
10. Identifying innovation values and new product team norms to guide behavior and communications among team members is crucial. You've got to determine individual team member goals, hopes, fears, and aspirations. You need to have each individual member discuss with the entire team his or her reasons for participating in the development of new products. Each one of them needs to articulate what he or she wants to get out of it -- personally. Companies that allow teams to invest adequate time up front to do this, and are open to the inputs made, help to solidify and empower new product teams. This coalesces the people power, which usually lies dormant within the team.
There are two key parts of innovation: creating and thinking newness and implementing the newness. Likewise, there are two components to an innovation mindset -- developing it and nurturing its continuation. It's up to an organization's leaders to instill and nurture this mindset.
Excerpted from "Innovation" by Thomas Kuczmarski (NTC Publishing and the American Marketing Association.) Tom is the President of Kuczmarski & Associates and will be presenting a session on "Managing New Product Innovation" at Convergence 96. Tom can be reached at 312-988-1525.
For more information about the Innovation Network, call 805-965-8477 or E-mail 73751.3361@compuserve.com or staff@thinksmart.com