Insights from Today’s Innovation Leaders
If you are lucky enough to be on an innovation team you understand the need to deliver successful innovative solutions. In this contemporary world assessing your progress and allocating resources is always a priority. Recently, Innovation Leader published the report, Benchmarking Innovation Impact 2020 offering an in-depth look at innovation strategies, investments, and approaches that drive successful innovation. It included responses from 215 professionals in innovation, strategy, R&D, and other roles as well as what they refer to as “role model” companies. These are organizations that have mature innovation initiatives including tangible results. Whether you are just starting out or re-evaluating your existing program, this report offers great insight from some of the most successful innovation initiatives today.
Bravo Innovation Leader and KPMG for an excellent look at benchmarking innovation.
Creating The Right Strategy
Before you begin, you need a strategy. Included in this strategy is a breakdown of activities focused on delivering incremental, adjacent and transformational successes. It is true that the industry itself impacts the distribution of such efforts however, almost all respondents cited the need for early, tangible successes – also referred to as “base hits” that show new initiatives provide solid value to the company. In addition to the industry the focus differed between all respondents and role models but basically it breaks down to 50% incremental, 25% adjacent and 25% transformational, give or take a 10% swing depending on industry and innovation maturity.
Besides creating a strategy that’s in line with your industry and level of innovation maturity, it is equally important to stay connected in the innovation space. Being integrated or collaborating with strategy teams, corporate dev/M&A and venture capital teams is essential to a successful innovation.
Resourcing & Funding Innovation
When it comes to resources, we are talking people and funding. Often innovation initiatives start off small. They must prove their value before getting any tangible resources. For incremental innovation, the most successful initiatives came when the business units worked together. This helped ensure a successful go-to-market. For adjacent and transformational there is a reliance on outside resources including innovation labs and corporate venture capital programs.
When you really look at the companies that are truly focused on innovation, they have a dedicated team of FTE’s working in innovation. Depending on the size of the company, the size of the team varies but 1-9 FTEs is the most common. The “role model” group runs between 10-24. Once again, these are the seasoned innovators, the ones that have been doing it awhile, and know what they need to succeed.
When it comes to funding, you need an innovation budget. The size of the budget will depend on the maturity of the program and the size of the company. Like many things in life, you need to prove your worth before getting more resources. This holds true to innovation. If your innovation leader is successful at bringing businesses units together and delivering successful incremental innovation, the chances are you will get more funding for the riskier adjacent and transformational initiatives.
Breaking Through The Barriers
Innovation programs are still in the early stages for most organizations and that is represented in the obstacles to success. For everyone, competing priorities and the ability to scale their programs are at the forefront. For the role model set they have moved beyond, “politics, turf wars, and lack of alignment” to traditional departmental type struggles like finding someone with the right skill set and program funding. Company culture and inability to act also ranked as bigger obstacles for adolescent programs whereas the more mature groups had established stronger relationships between business units and were actively pursuing innovation and delivering results.
In addition to funding – people, process and technology rank highest among the role model responses for enabling success. It starts with the right leadership and culture by-in. From there you need a vision, the right people to execute it, funds to make it happen, and the technology to support it. Again, this comes from the role models, the men and women who have built successful innovation programs.
Delivering Impact & Measuring Success
Let’s face it, it comes down to the revenue and if you have ever participated in budget planning you know it. The difference in tracking innovation revenue is when it begins. The early stage innovation programs are less focused on tracking while the more mature programs are absolutely tracking. Financial metrics need to be tracked. It you are leading the initiative it shows you truly understand the value of your program and realize that knowledge is power, no matter how incremental, adjacent or transformational its impact.
Besides revenue there are other ways to track your success. Learning and insight are the most prevalent, followed by projects launched, patents received and customer recommendations. As far as incentives to participate in innovation, offering recognition and rewards, bonuses tied to innovation and seed money to fund the kickstart of an idea help engage and build successful programs.
The report offers a lot of innovator perspectives across different industries. It concludes with some great peer-to-peer advice, from what has delivered the most impact to what they stopped doing completely. Additionally, there are worksheets and links to videos, podcast and infographics that will help any innovation initiative get going or move forward.
If you are truly serious about innovation you need a dedicated team of FTEs to run the program. Dabbling in innovation is collecting ideas, serious innovation is building and testing new solutions. For a successful innovation initiative, you need an experienced leader who understands what it takes to create an innovative culture. They need the resources to build a dedicated and knowledgeable innovation team. Someone who will advocate for the program and bring business units together to deliver ideas to market. A person who understands budgeting and cross departmental accounting.
Overall, confidence is high among the mature innovation leaders. They have grown through their adolescent stage and survived the trials and tribulations of initiating what can be an intimidating endeavor.