Posted By: Bala & Debbie
Everything is easier said than done? Wanting something is easy. Saying something is easy. The challenge and the reward are in the doing. Especially it is true when it comes to any Innovation or Transformation initiatives.
In the previous articles of this series “Making Innovation Ordinary”, we have discussed how to set the foundation for Corporate Innovation Programs to flourish. In this episode, let us get into the actual “Doing, and Doing it Right” part.
Newly appointed Chief Innovation Officers or VPs of Innovation have been popping up in every company these days. While they may be vaguely tasked to install the entrepreneurial mindset in the core business and look to the future, their core responsibility is to design, institute, and nurture the Innovation Portfolio. They may start their Innovation initiative as a minuscule project with a specific and tactical focus in mind. Going a bit further, that project can be expanded to a program that embraces many Innovation projects with the governance of maintaining coherence, budget, and monitoring risk. Nevertheless, when you are venturing into making Innovation “part of your DNA”, you have to have a well thought through Innovation Portfolio for allocating finite resources into potentially infinite opportunity areas and then into specific projects to capture a strategic objective.
As we all know, Innovation is required to lead to short-term returns through optimization of existing products, services, and business models. However, it also plays a central role to secure long-term survival by exploring new territories, whether geographic or new business. Many companies unintentionally harvest their core business by pushing short-term performance while losing out on long-term investments to stay ahead of the game. Sustainable innovation management must, therefore, be targeted at identifying and developing future businesses in parallel to optimizing current ones. An innovation portfolio maintains this delicate balance required for companies to remain viable years into the future by creating change today. This may seem like a daunting task, however, when you ensure that the building blocks have been crafted well, your Innovation Portfolio can be easily arrived at and managed.
Let’s dive into a few of the prerequisites that will help make your Innovation Portfolio a sustainable success.
It’s a Journey
While any portfolio management can be seen as a continuum, its subset of Innovation programs focusing on breakthrough innovations and key problem-solving are better managed as cycles with specific goals for each run. This will enable the cycles to start with an end in mind, and enable innovators to have the right guidance, tools, and support along the way. As we all know, coming up with an idea is just a starting point… but the real impact and value can be realized only when those ideas take shape and grow legs. This progression is a journey wherein each stage, the small sparks that the innovators come up with evolve to good ideas, which will progress into working prototypes, then eventually grow into sustainable new products or services or even business models.
Here at Innovation Minds, we follow the map outlined below to ensure that Innovators have a well-articulated and published journey map clarifying the Whats, Whys, Hows, Whos, and Whens. See if it resonates with you.
Moments That Matter
We as people are driven by a variety of factors including emotions. Whether it’s choosing a wedding dress or deciding to attend a conference, there is emotion behind everything we do. When we can create a specific moment that has high emotional capital with another person, we impact their feelings about the relationship. Likewise, you can create a positive emotional connection between your Innovation program and its participants. Providing a concise and easy way for your people to sum up their relationship with your program and easily share it is one of the most empowering things your Innovation program can do.
Find the magical moments that resonate with your Innovators, within the context of your culture, and embed them into your Innovation portfolio. Based on my experience and insights leading Innovation programs for eBay, PayPal, and LinkedIn, I have outlined some of the moments that matter from an Innovator lens in the diagram below.
By setting an emotional connection as an overarching goal, the “true north” of the innovator experience, an innovation portfolio can point its investments in the right direction, execute more effectively, and reap significant rewards. The rationale is that the emotional connection is directly related to improving employee engagement which is key for any initiatives’ success.
From Creative Problem Solving (CPS) to the Innovation Ambition approach used by Google, to John E. Arnold’s Design Thinking, academics and consultancies alike are putting ever more tools on the market promising to solve the difficult task of managing innovation. On the other side, there are many structured, comprehensive and consistent sets of concepts such as Lean Startup, McKinsey’s Three Horizons Model, Strategyzer Innovation Portfolio, and Customer Driven Innovation vying to manage your Innovation program and portfolio. There are plenty of options for Innovation managers to choose from, however, they need to either choose or build frameworks, that are not complex that no one understands them, but they cannot be so simple as to remove rigorous thinking from the process.
The one I like is ‘Three horizons of growth’, a popular McKinsey model for helping organizations structure their initiatives and find an appropriate balance between short-term and long-term projects in their portfolio. The basic idea of the model is quite simple: for a company to maximize its growth potential, they need to simultaneously work on projects within all three of the horizons. In conjunction with ‘Three horizons of growth’, we at Innovation Minds use a proprietary 6Thons© Innovation Framework to govern our Innovation cycles. What are your preferred models and why?
Tools at Work
While no software will automatically make your innovation initiative a sustainable success, the right tools can significantly help make it or break it. However, choosing the right tool can be challenging as there are many great innovation management software applications to choose from. Instead of picking the first solution that promises to fulfill all your innovation dreams to date, paying attention to those that work seamlessly with your existing processes helps you to ensure that your specific innovation needs are met now – as well as in the future.
I recall hearing my mentor often say to SaaS providers, “If I install your solution, how many existing solutions from my ecosystem I can retire?”. Instead of your Innovation management tool is yet another tool, if it can be positioned as a go-to-place for several interrelated needs, not only does the adoption grow, but your Innovation portfolio flourishes too. When choosing your Innovation portfolio management tool, you should consider aspects such as Easy-to-use, Engaging, Transparent, Accessible, Versatile, and Process-driven. Especially ensure the platform supports your diversified Innovation portfolio such as Internal vs. External and Breakthrough vs. Incremental and can provide core capabilities to manage your needs:
- Continuous Improvement: Manage incremental ideas/suggestions to continuously improve your products, services, technologies, processes, and business models
- Event Management: Manage any of your local/global innovation events for employees to search, find, RSVP, check-in, and be engaged.
- Feedback Management: Manage feedback campaigns for a particular challenge, program, and project
- Innovation Management: Manage holistic Innovation programs and/or targeted Ideathon/Hackathon/Sharkathon, focused on breakthrough Ideas
- Open Innovation: Manage co-innovation with your customers, partners, and sometimes even competitors
- Integrated Project Management: Continuum to evolve and manage selected Ideas to approved projects
- Integrated Talent Management: Leverage Insights from your Innovation Engagement to transform your workforce in terms of Talent Coaching, Talent Succession, Reorg Modeling, etc.
Piecing it All Together – Innovation Portfolio
Now that we have sorted out the prerequisites of the Innovation Portfolio, let’s dive into managing the Portfolio itself. Just as a good retirement fund will spread its investment into high-, medium-, and low-risk categories, companies must decide where and how to allocate their resources in an ever-changing environment. By diversifying investments into many different bets instead of one big transformation project, managing our innovation portfolio can make the overall output more predictable. The primary goal of building innovation portfolios is to make the unpredictable more predictable.
Among the many options available, a tool I specifically liked is the ‘Innovation Ambition Matrix’ by Bansi Nagji & Geoff Tuff. It is a refinement of a classic diagram devised by the mathematician H. Igor Ansoff to help companies allocate funds among growth initiatives. Ansoff’s matrix clarified the notion that tactics should differ according to whether a firm was launching a new product, entering a new market, or both. Innovation Ambition Matrix replaces Ansoff’s binary choices of product and market (old versus new) with a range of values to acknowledge that the novelty of a company’s offerings (on the x-axis) and the novelty of its customer markets (on the y-axis) are a matter of degree. Nevertheless, innovation managers should do due diligence when choosing or building their own tools and techniques, to ensure they really work.
All the best from Bala!