The three pillars required for any innovative company

The three pillars required for any innovative company

In this article I would like to share with you my thoughts on the practice of innovation management in an innovative company. I don’t think I’m wrong in saying that there are as many ways of doing innovation management as there are companies. However, we can certainly guess that all highly innovative companies have something in common that allows them on the one hand to nourish their culture of innovation and on the other hand to energize their entire ecosystem in order to push their innovations to the limits of excellence. It turns out that the following three elements structure the innovation management of highly innovative companies: (i) a support structure, (ii) practices that are consistent with their corporate values and (iii) and adequate processes. Let us briefly develop the concrete meaning of these three elements

The support structure

Many companies claim to have implemented an innovation process. However, once in place, it is ignored! Without a culture of innovation, everyday life takes over and innovation is simply forgotten. Large innovative companies have long understood that the innovation support structure is very important and have created the position of innovation manager, often called CIO (Chief Innovation Officer) in addition to an advisory committee of experts. La mission du CIO est transversale afin de lui permettre de déployer une stratégie optimale d’innovation. This strategy is mainly based on the following points:

  • Supporting good practices: establishing a strategic innovation plan, encouraging creativity in companies and promoting open innovation
  • Support the different business units: Act as an expert by proposing the work methodology and act as a facilitator to bring all the necessary help to the groups working on critical innovations
  • Identifying new markets. Analyze market trends to make existing products more easily accessible to new markets, the term used in this case is disruptive innovation
  • Support the creativity process: Set up platforms to generate new ideas, encourage hackathons, develop internal and external crowdsourcing strategies for the benefit of the company
  • Special funding: Has a special budget to fund innovative ideas that are homeless! Everyone knows the very positive turn in the history of the Post-it! Many important innovations were born as a result of a traffic accident.
  • Designing shelters for promising projects: Designing elaborate processes for disruptive innovations (portfolio, capex, stage-gate, sufficient budget…) in order to shelter them from managers who propose the status-quo

Many SME managers will probably recognize themselves in some elements of the CIO function but few have a real innovation process, not to be confused with the R&D process. My recommendation is to encourage collegial work through the establishment of a formal committee with a strong innovation and best practice process. The individuals who make up this committee must come from different departments and must be recognized for their boldness in proposing out-of-the-box ideas.

Innovation practices

The practice of innovation differs greatly from one company to another. The key is to have practices in place to foster an environment conducive to a successful innovation process! We will discuss innovation processes in the next section, but for now, let’s take a closer look at the most important practices adopted by successful innovative companies.

  • Innovation is an integral part of their corporate culture: All managers share the same definition of innovation with their employees and experience innovation on a daily basis as a continuous phenomenon. This creates a very favorable energy for the emergence of new ideas. Many companies go even further by funding creativity programs for their employees. A question that will be answered in another article is how creativity and innovation connect together?
  • Adapted collaborative tools: Set up platforms to generate new ideas, encourage hackathons, develop internal and external crowdsourcing strategies for the benefit of the company
  • Innovation is measured: All innovation activities are measured e.g. time spent in creativity sessions, investments in training, revenues generated by new products, new intellectual property, …
  • Excellence in innovation is valued: New innovations that achieve their goals are recognized and contributors rewarded

The innovation process

There are as many innovation processes as there are companies. At both ends of the spectrum, we find short iterative processes such as the one proposed by Lean Startup, and very complete cascading processes, such as the one proposed by AFNOR for innovation management. In this article, we

The Lean Startup process according to Rice

propose to explain the main lines of the Lean Startup approach introduced by Rice in 2011. This approach is currently very popular even among large companies because of its prototyping efficiency. However, the implementation of this process in large companies faces certain challenges related mainly to the ill-adapted pace of new teams recently trained on the Lean Startup process compared to the pace and ways of doing things in large companies that remain unchanged. I invite you to read Tendayi Viki’s article in Forbes

The Lean Startup method is based on a short iterative process, centered on experimentation, and structured by 3 operations: Build, Measure and Learn (See figure). From one or more ideas, we build an MVP (Minimum Viable Product): the MVP is the smallest unit that can be tested by potential users and the least elaborate, for example a model or a prototype. The MVP should be tested as soon as possible to measure its effects and collect data. With this data, the team learns and updates new ideas. The cycle can then begin again. The major risk to avoid is to spend too much time on the Build phase, and thus delay the Measure and Learn phases. Indeed, the objective should always be to confirm as soon as possible if the idea and the product create value for the customer, and to learn what are the weak and strong points of this idea. Too many startups (and project teams) spend months or even years refining a product without ever testing it with users. When they finally learn that the latter are not interested in their idea, it is often too late and the startup (or the project) dies. The Lean Startup approach aims to combat this risk, and the concept of MVP is therefore central to it.

A second central concept in Lean Startup is that of Pivot: the pivot allows the startup, or the project team, to adapt its strategy and its product to each new knowledge acquired through experimentation. The change can be incremental or radical: in the case of a radical change, the pivot can lead the startup to considerably modify its strategy, its product, its target market, etc. In all cases, the Lean Startup approach aims at reducing uncertainty to jointly build a concept and a market. It is important to emphasize that the purpose of this process is neither the product, nor the turnover, nor the customer: the purpose of the process in the mind of a startup is to learn, through validated knowledge, how to create a sustainable and successful business

In conclusion, a supportive structure plus stimulating practices and a Lean startup-inspired process are three important pillars adopted by companies seriously engaged in innovation.

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