Mapping the business innovation process

Citation

Kipp, M. (2001), "Mapping the business innovation process", Strategy & Leadership, Vol. 29 No. 4. https://doi.org/10.1108/sl.2001.26129dab.003

Mapping the business innovation process

Michael Kipp

Some futurists argue that there will be more change in the next 25 years than in the last 100. If that is true, business adaptations and innovations will have to be launched at least four times as rapidly – and as successfully – as in your experience to date. For most companies, this kind of acceleration will be impossible using the processes that are currently in use to drive innovation. The challenge is to find out where your innovation process stands today, "bookmark" the opportunities for improvement, and then develop a game plan for strengthening this critical competence.

Without a doubt, every manager wants to be innovative and hopes for the same from employees. Achieving it, though, calls for much more than desire. In many ways, the business innovation movement is today where the quality movement was in the early 1980s. One important difference is that, while it took nearly 15 years to make quality a standard, the "new economy" will make business innovation a precondition for survival in less than a third of that time.

Across all industries and economic conditions, only a fraction of participants claim consistently superior performance as measured by profitability, return on assets, product commercialization, job creation and stock valuation. How do they do it? What specific things do they do differently? While there are no easy answers, we have found five principles that invariably accompany robust business innovation:

1. 1.

   Mindsets. Great companies know that complacency is the thief of innovation. Such companies foster a culture of "no-fault discontent," in which people constantly call current practice into question. "What are the conditions under which we could close a loan in three hours?" "How could we schedule labor precisely for the schedule variations we experience?" This kind of thinking requires that the whole system remain open to inspection, which is not easy when the prevailing philosophy is "no surprises," standardization and managerial control.

2. 2.

   Tools. It does little good to simply empower people or exhort them to be creative. "Launch and learn" has to be augmented with tools for innovation – like the software that allows you to plan a garden or design a house, serving up options and inviting their flexible application. Several hundred engineers regularly visit National Semiconductor's site to make use of the company's previously proprietary design tools, thus outsourcing innovation to customers and equipping them to contribute.

3. 3.

   Peripheral vision. A three-year-old "houseguest" of ours recently spent a quiet moment coloring while his parents and we talked. When he tore his paper in a fit of artistic frenzy, he made his way to his newborn sister's diaper bag, "borrowed" the tab from a disposable diaper and quietly repaired his work. Like Einstein, he knew that "an idea has to be original only in its adaptation to the problem on which you are currently working." Unfortunately, years of schooling and supervision often put minds like his back "in the box." That's why AT&T launched its Opportunity Discovery Department, P&G sponsors its fabled Business Discontinuity Boot Camp, and Nortel underwrites Future First initiatives. Each of these firms is attempting to systematize the kind of "peripheral vision" that encourages people to see adhesion in one environment and recognize its value in another.

4. 4.

   Different perspectives. Innovation has its roots in the capacity to play; and the most exciting play involves diversity – unexpected combinations of experience, demography, function, context, and point of view. Eric Von Hippel's work at MIT shows that commercially important innovations –

5. 5.

   70 percent in chemical processing equipment and 80 percent in scientific instruments, for example – are often developed by customers rather than by the companies that bring these new products to market. The wisdom of lead-user studies and other "discovery marketing initiatives" is that they consciously pull people of differing backgrounds together to wrestle with a target challenge.

6. 6.

   Leadership. A quick analysis of the literature on leadership would suggest that people lead through vision, example, permissiveness, incentives or some adaptive combination of the four. Regardless of a leader's preferred style, a continuously innovative company must be visibly led in the notion that creativity is a core value. Following the averting of an industry-wide crisis by company geologists, for example, the chief executive officer of a mining firm we know rewarded the entire team and their families with a trip anywhere in the world. The sole requirement was that they plan to see something geological. Dozens of downstream breakthroughs can be traced to those "vacations."

These five elements work together in a core process that can be both mapped and managed, especially when seen in the larger context of the seemingly unrelated business processes and organizational "scaffolding" that supports innovation.

Mapping the business innovation process

The elements of business innovation are represented on the process map shown in Exhibit 1. Like all business processes, innovation can be represented as the linear march from an idea through to full-scale rollout and business results. Ideas can and should come from anywhere and may be wisely abandoned or foolishly derailed at any stage along the way. Interestingly enough, the fate of an idea is often determined by parallel processes, specifically the capacity to develop a business case and the willingness to adjust organization design to accommodate something new.

Truly innovative companies see the business case as an ongoing question rather than an 11th-hour justification. They are also quick to adjust roles, reporting relationships and incentives so that rolling momentum does not crush initiatives. The "scaffolding" that holds all these factors in place is a coherent business strategy, an enabling culture and the instrumental support – systems, metrics and tools – that equip a broad range of minds to play "what if?" with their operating environment.

Calibrating your approach to business innovation

We have had considerable success in identifying targets of opportunity for improvement using an easy-to-administer self-assessment. The exercise begins with a clear-eyed, fact-based review of the organization's current innovation results. What does the record show on such things as new product launches, process improvements, customer generation protocols, talent retention programs or novel business concepts?

Some companies are bereft of ideas, while others have lots of them but somehow never focus down. They may lack proper "scaffolding" – a supportive culture, a well-understood strategic context or facilitating leadership. Others may rush from prototype to market without generating the proof-of-concept that comes out of a well-constructed pilot. Still others fail for lack of a compelling business case – a process that begins with a commitment to focus and runs all the way through rollout.

A complete innovation assessment allows you to note the relationship between success in the core process and the strength of the cultural and instrumental scaffolding that supports or limits innovation. What is being measured, reported and rewarded? What tools and forums are available? What topics are discussed beyond "business as usual"?

Turn to the IdeaFile page at the end of this issue and use the assessment form to analyze your company's innovation processes and to identify your strengths and weaknesses. Use this checklist to improve your organization's innovativeness and adaptability in meeting the challenges of the fast-moving business environment.