5 criteria for successful innovation in organizations

My old acquaintance Wickie and I met up for coffee the other day, and as we both have an interest in the intersection of organizations and innovation, we discussed our various experiences in this potent field.
At one point she asked me to name the 5 key criteria for successful implementation of innovation projects within an organization.
Many wise books and articles have been written about this and I can only humbly suggest my own perspective which has been shaped by working with 'new stuff' in large corporations the past 15 years.
So here we go, my view on 5 criteria for successful innovation within an organization:

1) Senior management support and advocacy
This is old hat, really, but true nonetheless. If the innovation project hasn't got the support and enjoys active advocacy from upstairs, then forget it.
Be it a new business process, a ground-breaking product, a different set of performance metrics, an untried department structure, a novel view on strategy planning, an unfamiliar business model, a new business unit - it has to be backed by the CEO and his/her management team and explicitly supported and encouraged by them.
If you want to try and go it alone, be my guest - I've done this myself on more than one occasion - but there will be a limit as to far you'll get.

2) The right people
Often, you'll have only few headcounts dedicated to the innovation project so you have to be certain that they're the right people. You can't afford to make hiring mistakes or to lose people in this situation - hiring the wrong person means losing capacity, losing people means losing vital knowledge.
With the right people, you can move at high speed and to high standards, because they create the kind of synergy that make the whole bigger than the sum of the parts.
Not only do people working on innovation projects have to have superior technical/formal skills in more than just their own immediate area. They also have to possess certain personal skills:
  • High capacity for learning new stuff and for applying new knowledge, constantly.
  • Comfortable with the unknown and with making decisions based on limited information.
  • Ability to fly with the eagles and crawl with the ants, meaning keeping the big perspective while getting deep into the engine room.
  • Creative thinkers, able to problem-solve and to generate options.
  • Driven and with a relatively high level of energy.
  • Communication skills, open to and comfortable with a lot of feedback and dialogue.
3) An easily understood plan
Forget complicated, long-winded reports and poetic, flowery vision statements. 'A woolly plan means a woolly idea'.
To get buy-in, the plan needs to be concrete, communicated in basic terms and describe your constituents' role in it. Is it also possible to describe what's in it for them, great, but sometimes there isn't anything in it for them directly, other than a nod from senior management. And actually, that counts for a lot for a lot of people.

4) Stick to the plan
Your plan lays out the goals and how to achieve them. This is worth nothing if you don't stick to it. It's tempting to throw in a new idea that you just heard about from a colleague, your well-meaning boss might have some new thought that would really add a great dimension to the project, the sales guys might want you to please a big customer, and so on and so forth.
Listen to them, take it in, and then tell them why you will stick to the plan. Of course, there might be internal or external developments that force you to take a slight detour or swap the timing of key building blocks, but stick to the overall course and at all times relate everything you do back to the key objectives.

5) Understand where in the innovation process you are
All innovation projects consist of a number of phases that each have certain characteristics, set of activities, focus, and operating mode. Some call it Storming, Forming, Performing, Re-forming. Others call it Proof-of-concept, Proof-of-business, Growth, Scale. Others call it something third, but it all means the same thing, really.
The point is to understand each of these phases, in which phase your innovation project is, and when it needs to shift from one phase to the next. It's not unusual that the project owner or team firmly believes that the project has concluded, say, the proof-of-concept phase and is well into the proof-of-business or even the growth phase. This can be detrimental because focus is on a set of activities that are wrong for the project at that particular time.
For example: A new business unit might assess that it's the right time to start heavily marketing the new service and is overlooking that key business processes are not firmly in place - which would mean that the increased demand would bring the back office to its knees, disappoint customers, and make you unpopular with your supply chain and customer service colleagues.

These criteria, I propose, are the 'high five'. If you have other views on key criteria for successful innovation projects, please don't hesitate to comment on this post or drop me a note.

    Celebrating Drucker

    Peter Drucker would have been 100 years old today. His ideas are more relevant than ever; such as the idea of the modern corporation as an opportunity for community-building and providing meaning for the people who work in them. More about Drucker's ideas in this Business Week cover story from 2005 when he sadly passed away. Also, check out the November issue of Harvard Business Review which is dedicated to Drucker's ideas in the Drucker Centennial.

    Today's links

    • Why Marketing Does a Terrible Job of Marketing Itself - and why it's no longer about controlling the brand but about guiding it through its network of users, no longer about managing the marketing budget but about inspiring marketing excellence throughout the organization, and no longer about being a sales enabler but about being a value driver across the enterprise.

    What is user-driven innovation - and what is not

    Have you noticed the surge in user-driven innovation? Or rather - the surge in companies and consultancies who say that they do user-driven innovation?
    Well, I have and it's causing me a great deal of concern. Why, isn't user-driven innovation a good thing, you might ask. Yes, it is. Only most of these companies and consultancies aren't actually doing user-driven innovation. And this is creating problems for the real user-driven innovation, ultimately watering down the concept and its value.

    User-driven innovation (UDI) means that a firm involves its users directly in the product creation process ('innovation' could also be innovation in eg processes or eg communication through user-driven content or facilitation of peer2peer communication, but in this post I will refer to UDI as products/services development). There are three main ways of doing that:
    1. Co-creation - inviting a number of specific users, often lead users, to create new products with the company's own designers. Example: LEGO Mindstorms.
    2. Customization - facilitating that the user can design his own product based on a number of features and material combinations that the company makes available. Example: Nike ID, LEGO Design By Me, Timbuk2.
    3. Crowdsourcing - outsourcing product design entirely to the users. Example: Threadless.
    There are lots of hybrids of the three categories above but for the sake of simplicity, let's stick with these. The point is that with UDI there are levels of user-involvement - and reversely, levels of brand control - but all involve direct user participation in the product creation.

    And certainly, embarking on any of these three requires full understanding of the strategic, operational, and intra-cultural implications and a plan and desire to deal with them.
    • For companies born as UDI based companies, like Threadless, this is less of an issue since their entire business is engineered towards facilitation of UDI - it simply is their business model.
    • For established companies, like LEGO where I headed up the customization and co-creation business unit for a while, UDI represents issues pertaining to virtually all parts of the company. From sourcing policies, supply chain processes, IT systems, forecasting methodology, product quality standards, legal and IPR matters, corporate culture and HR, success criteria and KPI definition, to brand control policies, marketing principles and so on and so forth.
    Simply put, UDI represents a different way of doing business.

    But what seems to be happening is that UDI is being reduced to either the upstream research or the technology platforms that enable mass-participation. Let me explain:

    Lately, I've run into more and more consultancies and agencies who position themselves as UDI companies. But what they do is research on behalf of a client that involves asking users what they want and coming up with product concepts based on this input.
    But that is not UDI. That's market research. 'Oh, but we go out and ask the users in their own environment and study how they use the products and bring back their input', they say. That is not UDI either. That's anthropological market research. Something that most companies ought to do on a regular basis, yes, but UDI it ain't.
    Anthropological research does not equal UDI any more than a cat and a dog equal a zoo.

    Same thing with the tech platforms. Just because a software firm develops a CMS or a set of apps that enable user participation does not mean that this firm 'makes UDI'. In fact, no agency or consultancy actually 'does' UDI. Only companies whose users are directly involved in the product or service creation can claim that they 'do' UDI.

    We have to understand that UDI is a business model and requires a business system and a company culture that underpins it.
    We have to understand that it means measuring success differently, designing new processes for the product development, figuring out new reward systems, applying new principles to marketing and branding of the products, changing ERP systems and data flow, aligning the internal interests - and, if we're talking about established companies, perhaps also considering whether UDI should be an integrated part of the company or be developed as a separate entity that operates entirely with its own value chain set-up.

    UDI requires sticking one's hands deep into the engine room to understand the operational model that is and the model that needs to be, as well as loosening the grip on the brand and allow its users to bring their interpretation forward. It can seem a bit scary but the better you know your business and the more confident you feel as a brand, the easier it is.

    The rewards come in the form of happier users, more loyal users, higher-value users, users that will spread the word. And in the form of ongoing market and user insights, and - if you do it right - more streamlined internal processes, a more agile business operation, and a more change-ready organization.

    These rewards, however, only come if we understand that UDI involves the entire value chain and corporate culture, not simply upstream research, as user-centred as it may be, product concepts derived from it and a software platform to facilitate it.

    Today's links

    On Point

    Went to see This Is It the other day and then I went to see again the day after. These are 111 minutes that feel like 11. Once the film ends, the audience actually stays to watch all the frames that accompany the credits and you wish it would start over again.
    Michael Jackson is on point, beat and groove, embodying rhythm and soul in every movement, syllable and expression - nothing short of inspiring.
    And to quote Ice-T who with usual precision sums it all up to NY Daily News: "The main thing you get out of the movie is that the dude was still very much alive. It was a cold shot, man. You gotta see it for yourself."