Realizing the benefits of innovation, however, requires not only “talking” but “walking the talk.” The “walk” is a systematic approach to the continuous development and implementation of value-adding ideas to increase your competitive advantage. This systematic approach, or “Innovation Management,” involves the establishment of a cross-enterprise model, championed by senior executive leadership.
To help jumpstart the design of your institution’s unique innovation management approach, in this white paper, we provide a high-level view of the “what, how, and who” of creating shareholder value consistently.
What is Innovation Management?
These days, given the increasing velocity of change and the expanding number of change drivers (e.g., customer expectations, technology, regulation, emerging market growth, political instability, natural resource availability, and environmental health), you cannot go far without the topic of innovation being raised. Branding agencies, marketers, corporations from all industries, the public sector, and academia all bandy the term around, talking about how innovation is essential to the success and sustainability of their institutions. But what does "innovation" really mean? And, more importantly, how is the value of innovation realized?
First, innovation is not the same as creativity. Creativity is the process by which one identifies / invents something new or renews something that already exists. Innovation is the process by which the value of the creation or idea is realized. For purposes of this article, innovation spans "ideation" to "value realization"; and Innovation Management is the "cultivation of an environment where lightning can strike twice."
While realizing the value of an idea, let alone coming up with a continuous pipeline of ideas, is not easy, it is not impossible. Surmounting the challenge requires a systematic, senior executive-sponsored, cross-enterprise approach that incorporates the right processes, people, operating model, tools, and culture.
At the end of the day, Innovation Management is about moving beyond simply talking about innovation and the notion that all an organization needs is a bunch of smart employees to create sustainable competitive advantage.
Continuously and optimally capturing value from innovation requires:
- Executive commitment and alignment
- Focused governance
- A common vision consistently communicated
- Robust end-to-end processes diligently followed
- Appropriate tools and enablers
- Inspired thinkers and implementers, both inside and outside the organization
- Success measures and rewards that matter
- A tolerance for risk and failure
In the words of Steve Jobs, "Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It's not about money. It's about the people you have, how you're led, and how much you get it." "It comes from saying no to 1,000 things to make sure we don't get on the wrong track or try to do too much."