Insights

How to structure the new innovation

framework inovacao

 

It is consensual that companies need to innovate quickly and must mobilize and involve the largest number of employees as possible in this innovative process. It is also known that a great deal of innovation efforts – ideas and plans – fails.

 

Institutionalize innovation

Most companies have difficulty managing the innovation process because... they do not have an institutionalized innovation process. They talk about innovation, they discuss innovation, they generate and develop new ideas, but they don’t have formal models for thinking and implementing innovation, shared and adopted throughout all the organization.

The truth is that there is no model above all others that serves as a reference, The model should be developed according to the sector, the business and the stage of the company, the products and services, the key people, the competitors and customers evolution, among other factors. What is important is the company having a framework or a methodology approach and an action plan that be consistent and coherent among all its elements. But most companies just don’t have a business process to innovation formalized. Many others have a document, or a process defined somewhere but only few in the company know about it and fewer use it.

The evidence shows that a common denominator among innovation leaders is the existence of a formal and disciplined process of innovation management, from idea to market launch, managing each stage rigorously and measuring the critical success factors in each stage.

For this reason, a great part of the innovation challenge begins to be overcome when adopting a work framework, if a process is institutionalized and, in fact, the process is implemented. It doesn’t have to be anything too complicated. "A journey of a thousand miles begins with a step." This initial model will signal an intention to the whole organization and will allow a process of learning and improvement that must be oriented more by the subsequent practice in the day to day than by theoretical model’s complex.

 

Bet on innovation

Evidence shows that innovation leaders associate their innovation process to the strategic process and challenge the organization to look beyond the boundaries of existing business and mental models and to participate in the generation of new possibilities. Focusing on incremental and short-term innovation, just to "grow the business", is positive but yields limited results. Disruptive innovation that challenges the company and industry business model has the potential to generate significant profits and generate incremental innovations.

 

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Strategic innovation is focused on generating growth opportunities through new products, services, processes and business models that generate significant value for customers and for the company.

 

Create success conditions

In many cases, top management introduces a model of innovation without creating the conditions for success. A bold stroke approach, a presentation to impress, with great ambitions and great changes in the way of acting, is adopted very easily, where employees stay as spectators of a glamorous film. After the session, everything returns to normal life.

Once again, creating success conditions differs from case to case, but elements such as: sensitizing the urgency and importance of innovation, informing and involving the entire company, mobilizing sponsors and allies at various levels of the organization, setting an ambition clear and operational Key Performance Indicator (KPI), train people in innovation and new tools, set new incentives and introduce auscultation, engagement, support and performance measurement mechanisms.

In addition, it is important to analyze the concrete barriers to innovation and work objectively to remove or mitigate them.

 

Choose the model

Each company is unique, and the innovation model must be built in a customized way, from reference models. Multiple factors influence the definition of each company's model. Innovation models have evolved a lot in recent decades. The former was linear. The latest are network models.

The first wave corresponded to technological push models, starting from a scientific invention to a corresponding technological development, to a industrialization process, followed by marketing push, concluding with sales. The second wave corresponded to a market push model, starting from market needs for development, industrialization and sales. The third wave combined the previous two and introduced feedbacks in the process. Cooper's Stage-Gate Model is the best known, has several advantages and is still relevant and applied today, if integrated with new open innovation strands. The fourth wave is an interactive model that integrates, simultaneously, various functions within the company - marketing, product development, etc., which is a representative example the MIRP. The fifth wave corresponds to network models that try to embrace the complexity of the innovation process by promoting the internal and external connections of the company, such as the Creative Factory Systems Innovation Model. The sixth generation of innovation models is open innovation, a concept recently conceived by Chesbrough, in which innovation comes from internal and external collaborative mechanisms. The focus is no longer the company but the ecosystem in which it is inserted.

 

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This model needs to ensure that dominant convergent thinking in management and engineering is complemented by divergent thinking tools (to create new possibilities) that enrich the innovation process. It is in this context that becomes crucial to introduce tools such as design thinking, customer journey, value creation forums, and pretotyping, among others, and open the company to external sources of innovation, especially interactions with startups and solutions with partners.

 

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The important to emphasize in this analysis is that a good model should adopt the following principles:

  • The innovation process needs a strategic framework to objectify and focus efforts and resources.
  • Innovation must be adjusted towards identifying and meeting customer needs or aspirations
  • Segmenting innovation in stages helps to focus resources and simplifies management, providing clear decision points and facilitates control of the innovation process
  • The quality of innovations outcome directly from the quality of the innovation management process and not just from the creativity of employees
  • Creativity is not so much an act of inspiration but essentially a process of opening the field of possibilities through divergent thinking, which should not be stifled by the culture, hierarchy and rules of the company.
  • The introduction of multiple points of interaction and rapid prototyping - schematic or development, testing, feedback, refinement - increases the effectiveness of the process.
  • Innovation is never an isolated act but the result of multiple functional interactions, internal and external, and people with different perspectives.
  • It is important not to neglect competition analysis. In addition to the concern to create value, it is also necessary to ensure the capture of the value created.

 

Relevant models

Of the many existing models, it is worth mentioning three types: the simple one, the normative model and the strategic one. The simple model has the advantage of being easier to implement. It consists in defining four stages of action and learning.

 

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Some companies choose to follow the normative model aiming to obtain the innovation certification. 

 This model is easier to assemble because it is standardized and tested and requires discipline in the innovation process. However, there is a big difference between innovation bureaucracy and innovation management. In some cases, companies are more concerned with the formal compliance component, which may be cumbersome in some situations, not giving due attention to the quality of innovation.

The strategic innovation model is what allows us to design a solution that is more tailored to each company because it involves an approach that is essentially strategic, totally focused on creating customer value and profits. The essential part of this model is a strategic checklist that may be simpler or denser depending on the company size, ambition and resources, and which may result in a simple model or a more complex model. For this reason, does not have a graphic representation in this article. To sum up, this model combines process tools with customer-focused innovation tools and creativity. The steps of construction of the model are:

  1. Diagnosis (strategic threat, innovation culture, internal processes, etc.).
  2. Definition and strategic alignment of innovation.
  3. Definition of objectives, process, and innovation plan.
  4. Creating conditions for success.
  5. Implementation focused on new products, services, processes, and business models.

The most important components of this model are the promotion of an innovation culture throughout the company; the introduction or strengthening of processes to understand customer needs; the demanding identification of market needs and opportunities; the development of champions and teams of innovation; the introduction and training in new innovation tools; technological and competitive surveillance; a solid process of generating, filtering and conducting ideas to the market; adapting company incentives; the establishment of partnerships and interaction with entities outside the company; the allocation of key resources and the permanent measurement of results.

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