Innovation Inspiration: Lessons on building an innovation portfolio
30 Jun 2011|Added Value
As corporations have turned their attentions from survival to growth strategies, so the innovation pipeline has come increasingly under the spotlight. What are some recent lessons in creating an operating rhythm to bring new offerings to market across staged time horizons?
P&G’s four types of innovation
Connect+Develop is by now a well-known innovation outreach model (read Where Next on Open Innovation?), but P&G recognized they needed to drive organic growth as well. As part of their overhaul of how the company innovates, they focused on the systemization of four types of innovation:
Read more: How P&G tripled its innovation success rate
Incremental and Breakthrough go together
In a similar vein, Rosabeth Moss Kanter writes in the Harvard Business Review about how organizations need to consistently balance differing degrees of innovation, rather than lurching from short- to long-term time horizons. We need to think of an innovation system as a pyramid, with a large number of small ideas at the base, a middle new-opportunity incubation layer and few major bets at the top.
Read more: Block-by-blockbuster innovation
What about service businesses?
That’s all very well for product businesses, but what about innovation models for service companies? Well, as recent examples have demonstrated, it’s service businesses who are setting the pace with their Fire-Reload-Aim possibilities. The likes of Apple have created groundbreaking business models that combine hardware, software and service.
Watch this: Clayton Christensen on Reinventing your business model
Failure is the mother of innovation
Author Mike Malone said of Silicon Valley, “we don’t stigmatize failure, we admire it.” Or, as the poster at Facebook’s Palo Alto HQ puts it, “Move fast and break things.” Encouraging people to take risks is not a new idea, but it’s a key strategy in achieving disruptive innovation. Baba Shiv, Professor of Marketing at the Stanford Graduate School of Business, talks about unleashing Type 2 Creator mindsets to fail and deliver golden nuggets.
Read this: Why failure drives innovation
Disruptive change and organizational capability
So, how do corporations organize for disruptive innovation: aren’t the two things contradictory? Clayton Christensen and Michael Overdorf say you need to think about your organization’s capabilities – your resources, processes and values – otherwise, the graft won’t take.
Take a look: Meeting the challenge of disruptive change
Why companies don’t meet innovation targets
And finally, why don’t businesses get innovation right? Research findings vary, but somewhere between 50-90% of innovation projects are judged not to meet their organizational goals. David O’Sullivan identified issues in five key areas:
1. Goal definition
2. Alignment of actions to goals
3. Participation in teams
4. Monitoring of results
5. Communication and access to information
Read more: Framework for Managing Development in the Networked Organisations
Written by Jonathan Hall, Managing Director, Cheskin Added Value