Why Ideas Are More Than Merely Input

I made the case for innovation at the management level as response to improving the Ideas Management process itself. Whilst the arguments in the post was primarily addressing the “hard” factors of the Ideas Management process e.g. KPIs, this post is addressing some of the “soft” factors.

As an strategy consultant my experience is often that companies perceive the innovation process to start just prior to initiating a project. Like a forerunner to project execution, expected to be short and nonintrusive to daily operations, but at the same involving the whole organization. If successful in involving the organization, the result is frequent a frustrated innovation department or responsible because of the sheer number of incoming ideas and their “low” quality as these are not yet ideas, but merely input or inspirations.

Question: Why do we intuitively accept the validity of company-wide involvement and diversity of stakeholder participation, but fail to understand the nature the fuzzy front-end?

The reason can be found in how the innovation management process is being supported (see my definition of the innovation process in the end of this post). Most companies have developed process support for their project management, some even for their iteration phase, but few companies have support for the fuzzy front-end or the first two phases of the innovation management process.

The later phases of the innovation process often have defined and identified owners, whereas the first two phases, the fuzzy front-end, is often orphan without an owner thus frequently also without a budget.

The competencies required in the first versus the latter phases of the innovation process are very different, primarily because creative facilitation is key in the Inspiration and Ideation phases, whereas execution is key towards the end of the innovation process. Most businesses do not have many employees that meet the required competences of the first two phases, why these phases often become merged into a forerunner to project execution, where project managers take over.

The solution to the problem could be appoint visible owners of the fuzzy front-end, preferable a member of top management as these phases require a more holistic understanding of the business; its strategy, context, and business model. Yet again requiring innovation at the top management level.

The Innovation Process

I define the innovation process as a sequence of five phases:

  1. Inspiration phase, where input are sought regardless of immediate relevance to the company or its context. The intent is to receive inspiration from all possible sources, and success is measured in terms of involvement and diversity
  2. Ideation phase, where inputs have been through the initial screening based upon qualitative metrics. The intent is to connect and cluster input into ideas within a relevant context of the company, where success is measured in terms of adherence to strategic priorities or innovation themes
  3. Iteration phase, where ideas are yet again screened based on more quantitative metrics and get clustered into “concepts” or “themes” that are iterated on. The intent is to develop the business case for the concept and success is measured in terms of financial metrics
  4. Integration phase, where a concept have been formally approved as project, which is then executed according to the company’s project governance model. The intent is project execution and success is measured in terms of standard project management metrics
  5. Implementation phase, where the project is handed over to the organization for implementation into normal business operations. The intent is to turn the idea into an innovation through generating value from it

Management Innovation as Response to Ideas Management

Much has been written on innovation about its importance and fluidness. As a result many Danish companies has implemented, what they do best and intuitively feel most comfortable with; a stringent innovation process – often in the shape of a stage-gate model – which speaks to the rational being within us all.

However, more and more companies are opening their eyes to the dilemma of ideas management in their attempt to steer ideas through a linear process. To understand the underlying issues, I split the innovation process up into three rough phases: ideation, execution, and implementation. Its is my experience as a management consultant within innovation that companies often focus primarily on execution, secondly on implementation and least on ideation. Why?

The answer may lie in the fact that many Danish companies do not have a formal definition of innovation. A definition that brings clarity of how management perceives innovation and its relation to the business strategy. The result is, on one hand, that innovation becomes defined by what it is not – frustrating engaged employees – and, on the other hand, that is becomes the same group of people involved in the innovation process – frustrating management.

The lack of a formal definition is also a sign of that management does not understand or actively takes a stand on innovation, but often pushes the responsibility of innovation down into the organization; hence, the primary focus on execution. Due to the obvious project focus of this phase there is a tendency of viewing ideas and projects as similar, causing good ideas to get weed out in the early stage-gates. And the company looses its ability to produce radical innovation.

Another problem by the lack of a definition is that the value of innovation becomes difficult to measure as no holistic view on the innovation process is present. The result is that learning is not gathered, shared and absorbed into the organization as well as, because of the missing link to the corporate strategy, the value of innovation is invisible.

The good news are that relative minor initiatives can remedy many of the issues described. I name four initiatives, which must be owned by management as usual if to succeed:

  • formulate a relevant definition of innovation and link this to the corporate strategy to bring clarity to the organization of the type and degree of innovation, required to close the gap between present and future strategic positioning
  • have the Board assume responsibility of innovation and budget allocations hereto, while management is focused on short-term optimizations and cost-cutting. This sends the signal to the organization that innovation is still important, but of responsibility of the whole organization
  • appoint executive ambassadors of ideas in need for nurturing and shielding against becoming absorbed into projects to early
  • finally split and measure the revenues from existing and new innovations so that the innovation process’ value becomes part of the budgeting process.

The underpinning common denominator is that Danish companies are required to critically look at how they manage their organizations, including the innovation process. This in itself will require an innovation at the management level – a management innovation.

Question: It is feasible?