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?