Copenhagen, London, Hong Kong

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MannazFirst Floor

3 Queen SquareBloomsbury

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United KingdomTel. +44 (0)203 119 1240

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Mannaz LtdSuite 210221/F Ovest

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Tel. +852 2914 0028E-mail: hongkong@mannaz.com

www.mannaz.com

Enabling real achievement

Mannaz is an international frontrunner inleadership development.

Adopting innovative and efficient learning methods, we empower people development and business success.Founded in Copenhagen in 1975, we now serve clients across the world.

www.mannaz.com

www.mannaz.com

A Mannaz research-based series into

Leadership in Fostering Innovation

InnovateTime to Managing the innovation process

MZ Innovation report omslag RT.indd 1 27/11/13 10.59

Copenhagen, London, Hong Kong

Mannaz A/SKogle All 1

DK-2970 HrsholmDenmark

Tel.: +45 4517 6000E-mail: info@mannaz.com

MannazFirst Floor

3 Queen SquareBloomsbury

LondonWC1N 3AR

United KingdomTel. +44 (0)203 119 1240

E-mail: london@mannaz.com

Mannaz LtdSuite 210221/F Ovest

77 Wing Lok StreetSheung WanHong Kong

Tel. +852 2914 0028E-mail: hongkong@mannaz.com

www.mannaz.com

Enabling real achievement

Mannaz is an international frontrunner inleadership development.

Adopting innovative and efficient learning methods, we empower people development and business success.Founded in Copenhagen in 1975, we now serve clients across the world.

www.mannaz.com

www.mannaz.com

A Mannaz research-based series into

Leadership in Fostering Innovation

InnovateTime to Managing the innovation process

MZ Innovation report omslag RT.indd 1 27/11/13 10.59

1211

10

9 3

4

56

7

8

2

1

Not everything that counts can be counted, and not everything that can be counted counts.

- Albert Einstein

MZ Innovation report omslag RT.indd 2 27/11/13 10.59

Introduction: Managing the innovation process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Learning from successes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

01 . Innovate with your clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

02 . Innovate with your partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

03 . Trust your own people . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

04 . To manage the innovation process, focus on people . . . . . . . . . . . . . . . . . . 9

05 . Avoid gas plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

06 . Solving the organisation structure/culture dilemma . . . . . . . . . . . . . . . 11

07 . A look at the content of these papers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Identifying where to find the potential for innovation . . . . . . . . . . . . . . . . . . . . . . . . 15

08 . Exploring and scanning trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

09 . Broadening our perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

10 . Using the value chain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

11 . Exploring opportunities the Opportunity Matrix 1 . . . . . . . . . . . . . . . . . 20

Selecting promising ideas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

12 . Screening ideas the Opportunity Matrix 2 . . . . . . . . . . . . . . . . . . . . . . . 22

13 . Refining an idea the Egmont approach . . . . . . . . . . . . . . . . . . . . . . . . . . 24

14 . Assessing capabilities and go/no-go decisions . . . . . . . . . . . . . . . . . . . . . 25

Developing ideas for innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

15 .Bringing innovation teams to a high level ofperformance . . . . . . . . . . . . . 26

16 .Protecting your idea to make innovation happen . . . . . . . . . . . . . . . . . . . . 27

17 . Seeking and getting feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

18 . Dealing with setbacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

19 . Securing executive and managerial support . . . . . . . . . . . . . . . . . . . . . . . 32

20 . Learning from your competitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Supporting innovators and innovations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

21 . Marketing and promoting your idea a story . . . . . . . . . . . . . . . . . . . . 36

22 . Widening the market for your innovation . . . . . . . . . . . . . . . . . . . . . . . . . 37

23 . Leadership development and HR initiatives . . . . . . . . . . . . . . . . . . . . . . . 38

24 . Key insights on managing the innovation process . . . . . . . . . . . . . . . . . . . 39

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Suggested reading and references . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Contents

Copyright 2013 by Mannaz A/SAll rights reserved . Printed in Denmark

We at Mannaz are delighted to publish the third paper of our research-based series into Leadership in Fostering Innovation Managing the innovation process.

Our research shows the critical role innovation plays in surviving intense market competition and generating growth within an organisation. In order to foster innovation in the first place, an almost intrinsic criterion is creating a supportive culture, which is not as easy as might be assumed (see our previous paper: Creating a culture of innovation). Fundamental as it is, creating a culture of innovation only lays the foundation as the innovation process continues, various challenges arise. Only through effectively managing the innovation process can successful innovations be launched and eventually contribute to the overall performance of the organisation. In 2012, Mannaz conducted a global research study on innovation. We interviewed over 80 senior executives, experts and experienced practitioners from around the world. These individuals are involved in innovation and innovative practices as well as the design, development, implementation and facilitation of leadership development initiatives, both in-house and across a wide range of industries. As the survey shows, general human resource practices have been widely adopted to encourage innovation, especially in R&D departments, but few organisations reported that they have a systematic methodology for organising innovation.

In this report, we suggest companies start by learning from successes: from their clients, partners and their own people. With a better understanding of themselves and the wider environment, companies are in a powerful position to start the formal innovation journey: identifying potential ideas and practices for innovation, selecting and developing promising ideas, and making sure they gain both practical and moral support all the way through.

Depending on what the main hindrances and obstacles are, readers of this third paper will hopefully gain insight and find illuminating and practical ideas, as well as methods to assist them in mitigating the challenges to managing the innovation process.

As always, we are very grateful to all our interviewees and respondents to our survey who have contributed to our research by sharing their experience and views, by giving their time and their idea without you this white paper series would not be possible. Special thanks to Didier Gronin, who has compiled and edited the series, and Shiyuan Rao for additional input.

This third paper will be complemented by our final paper, to be published in early 2014: The role of executives and leaders in fostering innovation. Enjoy!

The Mannaz research team

Managing the innovation processIntroduction

4

We will start exploring what it takes to manage the innovation process by referring to several of the innovations cited by survey respondents, (originally outlined in our first report in this white paper series). In other words, let us start by learning from our successes!

01. INNOVATE WITH YOUR CLIENTSWhen asked how close their organisation is to its customers, the majority of survey respondents said they were quite close, and that they were eager to understand their customers needs and expectations with respect to new products, services or approaches. Nevertheless, not all organisations are able to develop this customer intimacy.

One respondent recognises that he is just doing repeat business with existing clients, but notes that,Some of our client organisations are very good at using things like DataAnalytics, who have software to look at customer patterns of purchasing. In this way they are getting close to their customers, and even doing co-design and co-funding. Some clients bring their customers into their innovation units.

Speaking about one of his clients (a biotech company) one respondent says that They needed to recognise and understand their target market, as they were themselves all PhDs or techies with little understanding of their customers. So they set up a new outward-facing unit to address those customer issues. Their CEO said, This work is now central to our strategy moving forward.

Another interviewee describes a new product that has been on the market for one year: an invisible deodorant that does not mark clothing and explains that, It was developed as a result of customer complaints. We were able to create a solid link between R&D and Marketing who worked regularly together to conquer the problem. We created a project team that looked at what competitors were doing. Feasibility checks were done. The time it took was fast for the organisation five years whereas normally it takes eight years for a new product to get to market.

One respondent, after having explained that in his company the capacity for new products is full, explains that Our loyalty approach to customers is whats

innovative: we pay them with knowledge and they reward us with knowledge. We exchange. They tell us. The exchange is knowledge-based, not money-based.

A respondent from the legal field describes the creation of a new online global facility which enables clients to use the legislation and regulations around specific areas no one had yet done this. This was a bold move, as we created something that is faster, quicker and cheaper for the clients. This has very positively affected our brand.

Understanding our customers is not as easy as it may seem though, and requires thinking beyond the obvious the obvious being A customer is someone who buys from us or who uses our services. This way of perceiving our customers is quickly becoming obsolete.

In the field of innovation, we need to learn to think of our customer as a partner; someone we form a relationship with. And, as in all relationships, we need to care about, listen to and grasp this persons concerns and challenges, as well as his or her successes, in order to fully understand them. This is more than enhancing customer loyalty. Its about asking What can I offer that will make our relationship unique and difficult to sever?

Knowing the preferences and potential needs of customers helps to reveal business opportunities. Some customers, who are early adopters and early adapters of a product, are called lead users' (von Hippel, 1986). They are very keen on the product and have expertise in their own wide-ranging fields, which means that they are very likely to offer original ideas about how to use and improve the product and may even be willing to cooperate with the organisations to make things happen. Consider Lego: by involving its lead customers in a user panel for a year, they co-designed the extremely popular next-generation Mindstorms series.

The closer your organisation gets to developing such cooperative relationships with your customers, the

Learning from successes

5

more naturally and easily they will work with you as partners in co-creating, co-designing and co-developing innovative solutions. Therefore, the core question here is how to develop a close tie between your organisation and your customers. Some of the respondents claimed that they do this by offering extended value, some by data mining and some by giving better responses to customer complaints. We believe that there are even more approaches to be explored. Facebook, Twitter, LinkedIn mobile apps and other state-of-the-art platforms, as well as traditional networking organisations and membership communities, are all possible options which can help you to interact more with your customers and create a sense of belonging. For instance, the official page of Microsoft on Facebook has over 2,870,000 likes (as of September 2013) and it updates almost every day, with each message wining thousands of likes; for more customer-facing companies, such as Disneyland (over 17,250,000 likes as of September 2013) and Lego (over 5,900,000 likes as of September 2013), online interactions are on a more frequent basis: the official page turns into an online community. Worldwide, people check Facebook every day and some even spend hours on social networking websites, making it a desirable channel to get your message to potential end-users.

02. INNOVATE WITH YOUR PARTNERSLet us look at cases where the partners were not directly the clients but other organisations.

A respondent describes a situation in which no tool was available to solve a problem in a space station. As they told us, An industrial company had a similar need in their production plant, but it took three years to start a concept study to get the initiative accepted (because of confidentiality, etc.), and passing from one funding source to the other became a challenge. Finally co-financing was agreed. We then worked on the prototypes and ended up with a breakthrough revolution for the space sector. This happened because of the motivation on both sides and of the confidence that was built between the two parties. My role is to support these kinds of initiatives.

Another respondent talks about a different type of co-creation. We have been working with Moller PSFG to design the Value Partner Programme (VPP) to increase the client management skills of our fee earners, which includes a highly attractive training programme; but the innovation is in what they are doing next, as they are trained in client teams to deliver exceptional service. We hope to roll it out globally.

One respondent was enthusiastic about the successful broadband Direct-Air-to-Ground Communications demonstration between a passenger aircraft and a ground-based LTE network. This new solution for in-flight connectivity, developed by Deutsche Telecom and Alcatel-Lucent, was presented in this successful demo event to convince representatives of major airlines as well as regulatory authorities of the DA2GC performance. Furthermore, the event was dedicated to boosting the next steps towards the designation of a dedicated frequency for unique in-flight connectivity in continental Europe.

Another respondent speaks about their wide-ranging collaborative processes: We are engaged in an innovation journey process with an agency partner, holding workshops in representative markets for each of the clusters/markets for the brand, collecting a portfolio of ideas, consolidating them and defining new requirements for new products or new approaches. In this process, we invite production, finance and sales representatives as well as the brewmaster and consumers.

For us, says another respondent, some large, unexpected acquisitions that initially seemed to go against our brand have been successful for all: new, disruptive business models that initially caused backlash from competitors were eventually initiated, changing our mind-set from the idea that innovation and new products need to come from headquarters to the approach that they can come from anywhere, and can be exported to the US!

6

All of the above cases effectively illustrate that instead of fighting the battle alone, working with your partners is a strategically better choice. As mentioned in the previous paper (Creating a Culture of Innovation), these outsiders are best placed to view your situation from a different perspective. With their distinct resources, partners may have the complementary technology or skills that you have been looking for. According to recent research, this new knowledge and capabilities can boost organisational innovation and financial performance in the business-to-business service sector (Wagner, 2013). Collaboration is often the key!

What stands out from the research is how people in these organisations dared to break the invisible wall between insiders and outsiders to establish long-term, trusting relationships with other companies and/or valued partners, enabling them to make innovation happen. This is closely related to the extent of the innovation culture within the organisation. Empirical studies have addressed the fact that, in an open-minded organisation, external knowledge is appreciated and integrated into organisational knowledge system, facilitating (for example) new product design processes (Brettel and Cleven, 2011). In industries producing highly complex products, where complementary components are produced by a set of specialist organisations innovating with upside and/or downside partners together as if the innovation process takes place on a platform (called platform innovation), innovation efficiency and quality are enhanced through knowledge sharing.

A critical issue in collaborating with partners is partner selection. Who are our partners? They could be your supplier, your contractor, other organisations within the industrial sector and even the crowd (Boudreau and Lakhani, 2013). Who to trust? Friends, acquaintances or strangers? In a cooperation context, knowledge flows. For some R&D-intense organisations, IP protection is a critical issue. Research suggests that in terms of trust, partnering with acquaintances creates a serious situation for organisations concerned about opportunism, because it is more likely that acquaintances can succeed in stealing their partners core technologies, if they choose to do so (Li et al., 2008).

7

03. TRUST YOUR OWN PEOPLEInnovation is a tough and challenging process; nevertheless, like most business activities, the ultimate determining factor in whether or not it leads to business success is the people carrying out these procedures. Therefore, we argue that your people are of strategic importance: trust them and they will prove their value.

When thinking about the process of turning a creative idea into an actual product, we can easily imagine how

Issue Solution Value/Result

Time wasted in the workplace. Workshops and projects set up and driven by employees and frontline staff.

Increased collaboration and motivation.

Cutting down the time spent interviewing people and the money spent on recruitment agencies.

HR brainstorming session: a simple website where candidates could upload videos of themselves maximum five minutes long answering a series of predetermined questions.

Hiring managers were very happy with the process, feeling they had made a good selection and that they had gained more insight into the candidates.

A client request for something we have never delivered before.

We set up a cross-functional working group to develop the solution for the client.

This is cost-efficient for us, adds value for the client and our people feel happy and inspired, as the result is a new product that can be re-used.

A client request for something we have never delivered before.

The global leadership development programme designed by global headquarters does not fit in with our regional needs.

To innovate around the basic programme principles and bring something more suitable for our audience.

It was not easy to convince our global headquarters that we had good reasons to change the design, and we also had a tough time with the external vendor who found it difficult to accept that we needed something different; yet we succeeded in including some significantly innovative elements.

This programme has been extremely successful and I am proud to have been a driving force behind the change. Success factors certainly included factual arguments and persistence, but also the trust of my manager who empowered me to be creative. Without his support and him defending our innovative approach, I dont think we would have succeeded.

To bring to life a new onlineMasters in Management programme.

A framework was built: different leaders built the content of their areas, which took time as people were given free rein to decide what would be appropriate to include materials were put together to produce a draft version of the programme we sought approval of the external qualification team (content, assessment and awarding processes) it was finally launched in the market place.

The programme has been reviewed and continually improved to provide the best experience for our students, and we have tried many ideas during the development process.

many challenges must have been encountered and overcome. How can an organisation ever conquer all the unknowns and win the battle? Not through the use of established routines, but by involving your most valuable resource your own people!

Based on our survey, the following table effectively summarises how some tough issues are solved by tapping into the wisdom of employees.

8

04. TO MANAGE THE INNOVATION PROCESS, FOCUS ON PEOPLEAn overwhelming outcome from our research was to involve your people in the innovation process, involve them early, and trust them.

It is estimated that some 70 per cent of major change projects initiated by companies fail. Examining how companies manage the change, we found that traditionally most emphasis has been placed on the project processes and the expected results at each stage, almost completely ignoring the human factor. Paradoxically, when it comes to examining why projects failed, people are almost always blamed, as if the people themselves wanted them to fail! But is that the real reason? As Chris Argyris would suggest, if we do not question the variables that affect our actions, we can end up failing again and again, getting more and more impatient with the incompetents or idiots who ruin our plans, our strategies and our ideas.

There are three stages in the innovation process, namely: ideation; selection; and retention, just like there are steps in project management or in change management initiatives. However, this is not a reason to focus only on these steps of the process and forget the people who are actually making things happen! After all, the purpose of the stage-view of the innovation process is to offer a big picture, not to set strict controls. As the widely accepted 8020 rule suggests, in order to fulfil our goals, we should invest 80 per cent of our time focusing on how we achieve the results we want, and 20 per cent on the results themselves. Unfortunately and in many cases, unfortunately this is not widely understood by those who manage innovation. As a result, when introducing innovation programmes, many organisations focus on getting the steps right rather than focusing on getting the right people, successfully managing the productive interactions between them, encouraging the positive attitudes and desired behaviours and on the leadership and team building skills all of which account for at least 80 per cent of the actual success of project teams.

Unlike in manufacturing plants where logical, left-brain-designed processes prevail, people are at the heart of innovation, just as the anecdotal evidence shows in the previous section. Some of our respondents have realised this, telling us that There isnt a full talent pipeline across the organisation yet, but that really needs to be fixed. The point we are making here in light of the impressive and

almost paralysing list of blocks to innovation identified by survey respondents, and the fact several of them continued to talk about blocks when asked how they overcome them is that the first thing to do when you want to manage innovation is to pay attention to the people.

As one of our respondents said, When you dont encourage innovation, you are actually hindering it. The very first step towards showing your encouragement of innovation is to get to know your people, understand them, listen to them, engage in dialogues with them, seek input from them, give them support, acknowledge and encourage them and act as a leader of innovation. Never use your powers whatever they may be; personality, position, organisation, resources or funding powers against your own people. Use your powers to work with them to achieve breakthroughs and innovation. The number one enemy you could have in managing the innovation process could be yourself!

Create a culture of innovation. Create an environment in which innovation will flourish, blossom and bear fruit. Trust the people and the results will follow.

9

05. AVOID GAS PLANTSAs suggested previously, traditional business models and left-brain step-by-step models are not innovation-friendly. This obviously does not mean that there arent any stages in the innovation process, but that its people who make managing and leading innovation such a fascinating adventure and journey. Creativity is the generator of innovation; it is a blessing we human beings possess. There is simply no example of real innovations brought to the world new products, services or novel approaches to work without a series of incredible human stories. Anyone who has been involved in making innovation happen will confirm this statement. Innovating is one of the most exciting and noblest human adventures there is.

We are strongly suggesting here that you, as a leader, sponsor and supporter should put people first, to be partners in the adventure. Avoid those who keep advocating a step-by-step model. If you wish to create a culture of innovation, why not trust your people, be patient, and see the marvellous ideas blind variation may bring to you.

Presentation style

'We have a process for managing the beast!' PPT: highly colourful PowerPoint charts with lots of arrows showing the way to successful innovation Figures: lots of figures, beautifully and impressively presented, preaching to the converted Stressing that innovation is a matter of survival

Style of suggestions

You have to measure and assess at the beginning, and then at each step Huge and complete organisation audits of innovation capabilities Of course, we can do this for R&D, but it is so much more powerful if you do it for the whole company Not investing your capital in this could jeopardise the survival of your organisation . You have to think about it and by the way, this other company (your competitor) just bought our complete audit

A TYPICAL GAS PLANT

10

06. SOLVING THE ORGANISATION STRUCTURE/CULTURE DILEMMASolving dilemmas is the daily bread of executives. Yet, once again, analysing and reflecting on the wide-ranging answers given by respondents to this survey, we acknowledge that there is no consensus and no clear universal answer regarding organisational structure. To make a synthesis and draw some tentative conclusions is even more difficult when you realise that this variety of viewpoints isnt attributable to the fact that different organisations are at different stages with respect to where they stand in creating a culture of innovation. Actually, the only areas in which there is some consensus and consistency across respondents answers can be summarised in the following statements:

Innovation should be addressed at senior executive level.

It often comes from the top, i.e. innovation is clearly part of the strategy.

A person on the executive committee is responsible for regularly bringing up the subject provided she is the right person.

Some others say that everyone on the executive team should act as mentors for innovation, which raises the following questions: Realistically, how prepared are they for assuming that role, even if they believe or claim that they already are? How effectively will they do it? How do you ensure that they will not send mixed signals to managers and employees?

The trickiest part for executives to get right when managing innovation is to balance between the exploratory, future star products and the current cash cow. Explore or exploit? Efficiency or flexibility? Do we have to choose one, or can they be reconciled? Studies suggest a balanced view, with evidence that business units employing ambidextrous organisational structures the capacity to simultaneously achieve alignment and adaptability at a business unit level compared with those employing (for example) traditional function-based structures show better performance and higher innovation streams (Tushman et al., 2010). Three major organisational structures for achieving ambidexterity are shown in the following figure.

To face radical environmental change, sequential separation is suggested, but the shift itself is risky and can incur potential administrative costs as well as psychological adjustment costs to employees.

To create new business, especially to invest in a relatively distinct business with high growth potential, structure separation is the most appropriate option as it gives a higher degree of autonomy, enabling control of almost all of the value chain, while at the same time creating benefits from sharing assets with operating units.

To cultivate existing knowledge and expertise to upgrade products, parallel structure is a good choice as it facilitates both supply side exploitation and demand side exploration through close integration with the primary organisation and a dedicated sales and marketing team.

'I am satisified that we have a senior innovation officer'

'It is a shame that we only take innovation management seriously in our R&D department. I believe that other departments could benefit from innovation as well'

'I am satisified that we have a seniorinnovation officer'

'This is certainly not the way to go'

YES

NO

'It is a shame that we only take innovation management seriously in our R&D department. I believe that other departments could benefit from innovation as well'

'Some years ago, an innovation officer was hired to entralise the innovation

efforts, but only lasted a year!'

YES

NO'This is certainly not the

way to go'

'Some years ago, an innovation officer was hired to entralise

the innovation efforts, but only lasted a year!'

WHAT ABOUT HAVING AN INNOVATION OFFICER?

11

Organisations change back and forth between different corporate structures.

Decentralisation is used to ignite innovation and change; centralisation to increase coordination and efficiency.

Exploitation and exploration are emphasised sequentially rather than simultaneously.

Organisations are divided into two (or more) separate units with different structures.

Flexible innovative units explore new areas for growth; more formal operational units ensure efficient operations in the existing business.

Exploitation and exploration are addressed by different employees and organisational units.

Organisations create supplemental network structures to complement the formal primary structure.

Employees switch between the two types of structures depending on their respective tasks.

Exploitation and exploration are addressed by the same employees, but in different structural environments.

Temporal separation Structural separation Parallel structures

Exploitation

Exploration

ExplorationExploitation ExplorationExploitation

CEO

t

CEO

It is worth pointing out that these three structures are not mutually exclusive. Organisations can customise their own structure design according to their strategic focus (Raisch and Birkinshaw, 2008). However, it is not just structures that matter; a supportive organisational context boosts individual engagement in exploitation-oriented actions, which contributes to the ambidexterity of organisations and this subsequently enhances organisational performance (Gibson and Birkinshaw, 2004).

Making innovation the responsibility of everyone in the organisation is, of course, a beautiful statement. How would one dare challenge it? This is about creative deviance (Mainemelis, 2010). How tolerant is your culture towards deviant behaviour? Well, let us try: what does this concretely mean? How can and will each of your employees act differently as a result of what you do to create such a mind-set, such a culture? (A number of ideas were proposed in our second report, Creating a culture of innovation. Others will be offered in our fourth report, The role of executives and managers in fostering innovation.)

TREE TYPES OF BALANCED DESIGN SOLUTIONS

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Do people in our unit create good ideas on their own?

Do we create good ideas by working across the company?

Do we source enough good ideas from outside the firm?

Are we good at screening and funding new ideas?

Are we good at turning ideas into viable products, businesses, and best practices?

Are we good at diffusing developed ideas across the company?

Number of high-quality ideas generate within the unit.

Number of high-quality ideas generated across units.

Number of high-quality ideas generated from outside the firm.

Percentage of all ideas generated that end upbeing selected and funded.

Percentage of funded ideas that lead to revenues; number of months to first sale.

Percentage of penetration in desired markets, channels, customer groups, number of months to full diffusion.

IN-HOUSE

Creation within the unit

KEY

Q

UES

TIO

NS

KEY

PER

FOR

MA

NC

E IN

DIC

ATO

RS

CROSS-POLLINATION

Collaboration across units

EXTERNAL

Collaboration with parties outside the firm

SELECTION

Screening and initial funding

DEVELOPMENT

Movement from idea to first result

SPREAD

Dissemination across the organisation

CONVERSION DIFFUSION IDEA GENERATION

07. A LOOK AT THE CONTENT OF THESE PAPERS

People who have been involved in making innovation happen, as well as experts who specialise in analysing how innovation happens and supporting organisations in fostering it, agree in saying that there are clearly some distinct steps in the innovation process. The most prevailing one is the BVSR model (Campbell, 1960a). The innovation process starts with blind variation, which is followed by the selection of promising ideas and ends with idea retention. A more practice-oriented analogue was also put forward in 2007 as the following figure shows: internal ideas generated within a unit, refined by cross-unit/party collaboration, followed by screening

and initial development before being disseminated across the organisation (Hansen and Birkinshaw, 2007). In addition, as the innovation regime in most industries shifts from traditional, closed innovation towards a more open culture, information and knowledge flows in and out during the whole process through purposed exchange and implicit transfer.

13

In other words, the experience of how a large number of innovations have materialised shows us that these are the steps followed by people in making them happen. We should not forget, though, that the vision and energy of a single person can strongly influence this process picture. Would iPods, iPhones and iPads exist without Steve Jobs? In this paper, we will follow these steps:

The identification of ideas that have potential for becoming innovations, i.e. strategic approaches that can lead to innovations.

Ideation

Screening and selecting promising ideas a critical step in the innovation processIdea selection

How novel and promising ideas can be nurtured and developed to make innovation happen. Ensure that innovation is supported along the way. Materialise ideas into working environments so the ideas blend into the organisational memory, (eg. a Post-it wall or some showcases).

Idea retention

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Identifying where to find the potential for innovation

One of the challenges in managing the innovation process comes from the confusion between creativity and innovation. Creativity is more of a psychological concept indicating the production of novel and useful ideas in any domain; while innovation is the successful implementation of creative ideas within an organisation (Amabile, 1996). It is, of course, important to generate novel ideas in order to find the few magic ones that will lead to a new product, service, process or business model; however, we will not focus here on some very powerful creativity techniques (such as brainstorming, lateral thinking, mind mapping, Metaplan or the use of metaphors as these were already outlined in our second report). This is definitely not because these techniques are of no use. They certainly are, and organisations that offer support to use these tools to their managers and employees do help create a culture of innovation. Instead, wed rather address the following question:

Among all the ideas we can generate, how do we go about strategically identifying the promising ones?

We start here by looking at how you explore trends, how you can consider broadening your perspectives and how you identify sources of opportunity.

08. EXPLORING AND SCANNING TRENDS

The future will be determined in part by happenings that it is impossible to foresee; and it will also be influenced by trends that are now existent and observable. - Nobel Peace Prize winner Emily Greene Balch

In answer to the questions: How does your organisation study and analyse trends? We repeatedly heard responses along the lines of: Well, we have our market research department and they are responsible for that

Market research has a place and benefit in the business world, however we want to look at something larger here: at an awareness of global economic, political, financial, social, demographic and technological trends that may or will have an impact, both in the short- or long-term, on your business and/or on the way you conduct your business. Why? Think about Skype; originally initiated as a money-saving application, it gradually developed and changed the image of the telecommunications industry. Think about Kodak, the leading camera and Film Company. How well do you think they read and adapted to the digital image era? Did they anticipate enough? Did they proactively act when revenues declined? And so on. Many survey respondents explicitly stated that they missed some critical opportunities; however, the reasons are unclear. Some suggest that it is due to resource allocation decisions and risk aversion that they had to give up a certain opportunity. Research suggests that the inability of some successful organisations to allocate sufficient resources to technologies that initially cannot find an application in mainstream markets (but which later invade them) lies at the root of the failure of many once-successful organisations (Christensen and Bower, 1996). Hence, deciding on and identifying which idea(s) to invest in should rely not only on market research but also on detailed trend scanning.

As John Naisbitt the author of Megatrends tells us, Trends, like horses, are easier to ride in the direction they are going. This can prove to be very difficult for all of us, as one of the major obstacles to innovation is our natural tendency even when it is not consciously realised to do what we are accustomed to doing, what we already know and what has worked well or served us well till now.

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Paradoxically, but in a very real and dangerous way, the amount of information we are bombarded with on a daily basis constitutes another obstacle to exploring trends. Naisbitt observes that, We are drowning in information, but starved for knowledge and, Intuition becomes increasingly valuable in the new information society precisely because there is so much data. We dont want to amass great quantities of data about trends rather than listening to our most intuitive people.

As Sun-Tzu summarised in his famous book The Art of War, Only the one who has deep understanding of oneself and the external environment can win each battle. For an organisation to survive in this competitive and ever-changing environment, it is critical that it takes a retrospective view of itself and an introspective view of the world, and that it does this regularly as part of the organisational routine.

What precious knowledge should we not miss in current trends? What are the latest basic science/technology developments that will significantly influence our society?

Know the trend

Who are the people who can help us detect and understand key trends relevant to our organisation? How can we leverage our suppliers, business partners and customers to help us know the trends better?

Know our partners

How do we study and analyse the trends that will impact on our future? How could we benefit more from the interest some of our managers and employees have in trends analysis? How could we reap the benefit of trends analyses performed by people outside of our organisation?

Know ourselves

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To illustrate how we can broaden our perspectives when trying to identify a promising idea and to find novel ways to bring about innovation, lets take the example of a case study provided by Lenny Shine, a Mannaz associate experienced in fostering innovation with client organisations.

Innovation experts all suggest that the approach shared above can lead to success and in different areas than the concrete challenges outlined above. The underlying reason comes from the wisdom of the

Problem statement The company was dissatisfied with the cost and complexity of inspections and repairs of oil and gas pipelines, particularly in valuable but harsh climates such as the Arctic or deserts.

Process The netted process: a cross-functional team including apparently unrelated experts to break the mould of pattern-centred thinking about the issue, i.e. not being constrained by conventional wisdom on the impossibility of what they were trying to do. Subject matter experts from unrelated areas (e.g. fibre optics, lenses, magnifiers, and other non-oil and gas industries) were brought in as resources to aid the process of transforming ideas into actual machinery.

Additionally, people skilled in areas such as cultural anthropology, organisational psychology, and small and large group communication were assigned.

Key success factor Through the marriage of unrelated areas of expertise, guided by strong innovation facilitators, the possibility of an idea was embraced.

A very concrete innovation that deals with the remote inspections and repairs of oil and gas pipelines was launched.

Result

Bringing together seemingly unrelated people from unconnected disciplines to really question, observe, listen, experiment and network with the goal of associating and linking ideas in a strongly facilitated team process takes the creativity of ideas and turns them into the products, processes and structures that we call innovation, and delivers a business outcome.

Comments

09. BROADENING OUR PERSPECTIVES

crowd (Surowiecki, 2004) and brokerage returns (Burt, 2005). By engaging people from a variety of backgrounds, companies not only cultivate a wider knowledge pool, but more importantly when these previously isolated experts meet and discuss ideas with one another, it is very likely that common sense in one field combined with expertise from another is the perfect remedy for a problem in a different field. In this way, our often limited perspectives on the complex business or organisational challenges that we are facing can be broadened.

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10. USING THE VALUE CHAIN

The basic tool for diagnosing competitive advantage and finding ways to enhance it is the value chain, which divides a firm into the discrete activities it performs in designing, producing, marketing and distributing its product. - Michael Porter, author of Competitive Advantage

It is true that using the value chain can prove to be both an occasion to bring kaizen continuous improvements to the functioning of your organisation and a powerful way to identify sources of opportunity that may have been ignored or neglected by your organisation as a whole, or by specific functions or departments within your company.

The three first activities input, operations and output are logical and self-explanatory. Everything that comes in the organisation or the department forms the input. Operations represents everything that we do to deal with the input. Output covers the solution to the problem or request and the delivery of products and/or services. The two others are different, as they relate to the image of your organisation or department, the way you are perceived by customers, other departments, the media, competitors and suppliers and after-sales considers what your department does once it has delivered the product and/or the service to the customer. Finding ways to improve processes in these five areas leads to competitive advantage and to finding sources of opportunities and possible innovations.

It is a pity that most respondents keep their innovation work within the boundaries of R&D departments rather than reconsidering the value chain of the organisation.

Value chain analysis is an inward-looking process requiring examination in great depth of how your organisation or your department performs. It is based on the belief that there must be a better way of doing the things we do, and opportunities for innovation based on process systems can be found in abundance if you apply a systematic approach to the analysis. In his book Competitive Advantage, Michael Porter offers a tool for doing this examination. He divides the activities of a typical organisation into five areas as shown in the following vertical diagram.

Anything that comes in your organisation: products, services, inquiries, orders

Goods/services in input

How you process the input: interactions with other departments

Operations

How you deliver your products and/or services

Goods/services out output

The image you project both externally and internally

Advertising and marketing

Development Advice Follow-up After sales back-up

After-sales service

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Brainstorm

The brain storm section can be based on questions such as; How could we improve the way we receive inquiries?, How could we welcome our customers better?, How could design and develop more effectively?, How could we project a better image? and In what way could we improve the delivery of raw materials (service)?

Use the value chain analysis. Each member of the team needs to select two ideas for each step which would make the most impact on your performance or help you deliver better customer value.

Test

Ask for volunteers to implement the selected changes, with an action plan and agreed deadlines. Review with the team as you progress according to plan.

Analyse and select

A FULL DAY WORK SHOP OF THE MANAGEMENT TEAM

A simple and powerful way to get started is to get your management team together for a full-day workshop and perform the analysis, possibly starting with a brainstorming session based on questions such as:

How could we improve the way we receive inquiries?

How could we welcome our customers better?

How could design and develop more effectively?

How could we project a better image?

In what way could we improve the delivery of raw materials or of our service?

After having collected ideas for improving performance in each of the five steps, you can ask the members of your team to select two ideas for each step which would make the most impact on your performance or help you to deliver better customer value. Then ask for volunteers to implement these changes, with an action plan and agreed deadlines. Review with the team as you progress according to plan.

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11. EXPLORING OPPORTUNITIES THE OPPORTUNITY MATRIX 1

The challenge is to identify all the ideas which will occupy the upper right corner of the matrix, and that are as close as possible to the vertical line on the axis of Possibility-Impossibility: the line of impossibility.

The objective is to allow the people who participate in the exercise to consider highly unlikely opportunities and to invite them to push the envelope, think out-of-the-box and allow themselves to explore rather than to censor ideas. The goal is not to predict the future, but rather to reveal possible opportunities whose significance may be difficult to determine at present, but whose consideration may contribute to the development of patterns of opportunities. We are also aiming to establish, in the minds of the management team or project team members, the need to regularly exercise their potential capacities and to share prospective ideas.

Like the value chain analysis, the Opportunity Matrix 1 can also be used to explore opportunities. As illustrated in the diagram, it has two axes: Opportunity and Possibility. The vertical axis is the Opportunity axis and runs from the most negative (or perilous) possibilities at the bottom to the most positive (or desirable) opportunities at the top. The horizontal axis is the Possibility axis and runs from impossibility (0% probable) at the extreme left to 100% improbable (actuality) on the right.

Almost impossible

Highly probable

Opportunities

Most negative/perilous

Most positive/desirable

Opp

ortu

nity

Possibility

OPPORTUNITY MATRIX 1

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Define the ideas in the upper right of the Opportunity Matrix

Reflect on all the notes collected and identify the most possbile one

Identify the 'almost impossible to achieve' ones

Brainstorm the best imaginable outcomes

Identify the 'can reasonably possibly

happen' opportunities

List of opportunities

Other approaches may be taken to generate desirable opportunities: using metaphors and conducting a Metaphor Survey and using Appreciative Inquiry have already been described in our second report, Creating a Culture of Innovation.

Another way to generate and identify possibilities, and opportunities as a result, is to use Post-it adhesive notes with a management team or a project team. Here is the process:

You first define the upper right of the Opportunity Matrix on a chart, a wall or any large surface on which Post-it notes may be affixed. You then brainstorm the best imaginable outcomes of your search for opportunities, write each response on a Post-it note and post them in the most appropriate location. You then reflect on all the notes collected, identifying first those which are likely to happen before you turn to the remaining ones. You then identify, among the remaining ones, those which you believe can reasonably possibly happen. Finally, you identify those which are almost impossible to achieve. Be careful, this is a critical step. Here, one is close to having identified true breakthrough or innovative opportunities, dont dismiss it. You have the beginning of a comprehensive list of possible breakthrough opportunities. If you perform this simple exercise regularly, you can add new outcomes and influences and review the already identified ones.

Almost impossible

Highly probable

Opportunities

Most negative/perilous

Most positive/desirable

Opp

ortu

nity

Possibility

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12. SCREENING IDEAS THE OPPORTUNITY MATRIX 2A crucial step in the previous stage is the prioritisation of ideas; however, before looking at ways of selecting promising ideas for innovation, lets first look at the method, presented by Kathryn Redway in her book, Make it Happen! The Opportunity Matrix 2 helps to form an initial screening of ideas that does not give undue weight to excessive quantification too soon. Although it does not include a customer focus which is its weakness it can be helpful in prioritising ideas and in taking resources into account early on.

You need to have a broad focus during the screening stage. An evaluation that would be purely financial or only people-oriented is not likely to be successful. The following matrix shows two axes: one addresses the question of strategic fit and benefit to the department, the other the question of ease and cost of implementation. When we evaluate a promising idea, our aim is to find the best possible match between the two.

Selecting promising ideas

The strategic fit and benefit axis questions whether the idea is in line with your strategy and business objectives. Does it tie in with the nature and direction of your business? What will be the benefits in terms of productivity, market share, the quality of your service or product and your profitability? If your answers are definitely Good (where the scale goes from Good to OK to Bad), go to the top of the line in this first axis.

Ease and cost of implementation measures the idea against four resources: People, Time, Systems and overall Cost.

People: Do you have enough skilled resources? Who will it affect? Will you meet resistance? If so, who from?

Time: How long will it take to develop and implement this idea?

Systems: Do you need to change your systems and procedures? Do you have the technology?

Cost: What will it cost to market and promote this idea? Will you need to retrain or recruit? Will you need to upgrade your technology?

GOOD

GOOD

Possible

Remote

No Ok Good

Highly probable

PossibleHighly

probable

Best

OK

OK

BAD

BAD

Str

ateg

ic f

it a

nd b

enef

it

Ease and cost of implementation

Possibility

OPPORTUNITY MATRIX 2

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If the answers to these questions are Good, go the right-hand side of the matrix.

After answering these questions, four types of opportunities can be recognised, they are:

For the remote and no ideas, should you just forget about them all at once or maybe keep an eye on them? Here is a word of caution: some disruptive innovations incubated in distant, emerging markets may have the potential to take over mainstream incumbents in an unexpected manner. Moreover, this opportunity matrix does not include a customer focus. Therefore in case the customer market changes, and the strategy of your organisation needs to be adjusted, these previously remote and no ideas may turn out to be of great value. In short, you need to be very clear and sure about your strategy or business objectives. Involve other colleagues or team members to get a balanced and objective evaluation. Good luck!

Both strategic fit and costs are poor. Not a good idea.

Both strategic fit and implementation could do with improvement. Work on the idea.

Good strategic benefits and reasonable costs, or Reasonable strategic benefits and low costs. Try to improve the weaker factor.

A close strategic fit, high benefits, ease of implementation and low costs. Go for it!

Forget about it?

Best oportunities

Highly probable opportunities

Possible opportunities

Remote opportunities

No

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The COSTAR

(brought to Egmont by Herman-Gyr)

Helps you to think through ideas by looking at six dimensions:

Consumer: Putting the customer first, what is the unmet need that the consumer has? Opportunity: How big could the innovation be? Solution: What is the end product or service envisaged? Team: What will you need? Who needs to be involved? Advantage/alternative: What else is out there? Has your idea got legs? Results: What will happen? What will be the result for consumers and for the business?

Pitch tool

Rapid idea improvement session (RIISS)

An elevator speech which consists in telling a memorable story about your idea and what you want from people in your audience in order to improve your idea. Its a three-to-five minute speech that ends with a request.

Helps the culture change in the organisation as it helps to open minds and to make people think differently. Construct and organise feedbacks collected using COSTAR and the Pitch tool in two parts: gold and green feedback. Gold feedback: What is great about your idea? What is compelling in the way you present and champion it? What you must keep as you progress? Green feedback: What is less convincing? How could the idea improve, with respect to both content and presentation? Other feedback: specific actions that the person could consider, who can one to talk to? What to do next based on feedback?

13. REFINING AN IDEA THE EGMONT APPROACH One of the respondents to our survey, Dawn Cordy, Innovation Director, HR partner and strategy director at Egmont UK, shared with us the approach her company is using to refine new ideas after they have been submitted in a virtual innovation box. There is a process: when an idea is proposed, an idea manager is alerted and comes to see the person who proposed it, guiding her and encouraging her. The company uses three tools to refine original ideas: the COSTAR method; the Pitch tool; and the Rapid idea improvement session (RISS). These three tools were inspired by the Enterprise Development Group who Egmont Kids Media UK worked with initially on their innovation process1. Lets briefly describe each of these three tools:

The idea manager is not there to do all the work on the idea, but to facilitate the process and support the person who generated it. The combination of the above three tools clearly helps a person who has an idea to quickly refine it and reflect on what has to be done to further develop it.

1. For further details, see Creating value with CO-STAR by Laszlo Gyorffy and Lisa Friedman ( Produced with help from Egmont).

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14. ASSESSING CAPABILITIES AND GO/NO-GO DECISIONSWhen an idea is presented to senior executives for assessment and for a go/no-go decision that will result in funding and resources given to an innovation, there are a number of dangerous traps to avoid.

The first is to dismiss an idea too quickly. As many respondents have said, really novel ideas need time to incubate. It is better to give new ideas a chance to be nurtured and developed to reach a stage when they can be fully assessed.

Another concept, is often linked to an assessment of the industrial environment in which the organisation is operating. In an era of change, it is crucial to keep an eye on the external environment and not be held back by individual decision makers cognitive biases and path dependency on existing ways of operating. With hindsight like in so many case studies it is very easy to judge that the decision made by executives was not the best one. There was a time at IBM, for example, when the idea that the future of the company should move to IT consulting was totally blocked by the members of the executive committee. Lots of arguments were used to

dismiss the idea, one of the decisive ones being that the company had simply no capability in this area. And yet a few months after the board had replaced the IBM CEO, the new one announced that the company would move to IT consulting, and took the necessary measures to develop the necessary skills. The rest is history. The critical judgment to make is whether the innovation is one that requires only investment in skills and technologies, or one that calls for strategic change (Tripsas and Gavetti, 2000).

Yet another trap relates to the time it takes to fully develop and test new technologies often an eight-to-ten year cycle being too hurried; not going through the initial testing carefully may run a substantially high risk, especially in some industries. The recent grounding of all Boeing 787s provides a dramatic example of such a situation, as a new lithium-ion battery that was in its fifth year of development was included in the plane. The driver for the go decision here also seemed to be the relentless pursuit of market share, combined with the desire to become number one again, not to mention the pressure to deliver a totally new plane requiring extremely complex integrations. Overlooking such complexities and going too fast either in the rush to be first or beat the competition can have serious consequences.

Go/no go reviews are also, clearly, a chance to fully assess ideas a number of other key factors can be taken into account at the same time. Examples might include:

Customer needs and expectations Strategic fit Competitors standing Funds and resources required

These constitute unique opportunities for innovators to present the potential impact of what is being proposed to develop and at the same time to make an in-depth assessment of what it will take to make innovation happen.

Dismiss too quickly

Path dependency

Rush to market

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Developing ideas for innovation

15. BRINGING INNOVATION TEAMS TO A HIGH LEVEL OF PERFORMANCE Innovation is often brought about by well-integrated and highly effective teams. Bringing people together in a team enables the integration of a range of expertise, skills and attitudes to focus on a common objective. There are several excellent tools for assessing the strengths individuals brings to a team and for helping them to better understand, appreciate and leverage the strengths brought by others.

Myer-Briggs Type Indicator: For a better appreciation of each otherThe Myers-Briggs Type Indicator (MBTI) is a psychometric questionnaire designed to measure psychological preferences in how people perceive the world and make decisions (Myers and Myers, 1980, 1995). Proposing a team MBTI workshop in which people use and apply the Type in Organisations and Type in Teams MBTI booklets, or using the Team Management Profile (TMP), also based on MBTI dimensions, can help team members gain a better appreciation of each other.

FIRO-B questionnaire: For synergetic actionThe fundamental interpersonal relations orientation (FIRO-B) questionnaire focuses on the needs of each team member with respect to interpersonal relations. It can also help team members to understand their own and others preferences in order to build synergy.

Belbin Team Inventory: For optimising team efficacyThe Belbin Team Inventory is based on Meredith Belbins research on the roles people play when they work in a team and is presented in his book, Management Teams: Why they succeed or fail. The techniques can significantly help team members appreciate their respective strengths and allowable weaknesses, and optimise their effectiveness as a team.

Research has shown that, regardless of the organisational size, high-performance teams display the following characteristics: A shared sense of purpose. There is a sense of

clarity and clear common goals and priorities about decisions.

Open communication. People feel free to express their thoughts and feelings; conflicts are brought in the open and resolved.

Trust and mutual respect. People value and respect each other in the team. They provide honest, constructive developmental feedback.

Shared leadership. Depending on the tasks, different team members assume leadership. The formal team leader acts as a coach and facilitator.

Effective working methods. Team members know how to gather, organise and evaluate information and are ready to improve the way they work together.

Building on differences. The team optimises the skills, knowledge and strengths of its members and seeks the viewpoint of outsiders.

Flexibility and adaptability. Team members view changes and setbacks as opportunities, reframing the objectives and responding quickly.

Continuous learning. The team learns from both mistakes and successes, encouraging the growth and development of all its members.

Using a team assessment questionnaire based on the above eight characteristics will enable the innovation team to build further on its strengths and to make swift action plans to improve in lower scoring areas. A facilitated workshop in which the team have the opportunity to use some of the techniques described above can considerably help the team to reach a level of high performance. However, the above discussions are based on the assumption that the team has already been set up but what about creating an innovative team in the first place? A number of empirical studies have pointed out the relationship between team diversity and team creativity. The main argument is that as long as there is the precondition of sharing the same ethos, more open and effective communication among team members will boost creativity.

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In order to preserve the life of your idea, to protect and nurture it, it is important to do certain things. The first step is to clarify your objective as much as you can, which may not be that easy in certain cases. One way to do this is to discuss it with members of your team and/or experts in the area, so you can be as specific as you can with respect to the product, the service and the process, as well as the expected outcomes. Why is this so important? Because innovators often become so passionate about their idea that they do not take enough time to step back in order to clarify the purpose, the objectives and the expected outcomes of the innovation involving, whenever possible, future clients.

16. PROTECTING YOUR IDEA TO MAKE INNOVATION HAPPEN

The second step is to create a plan of action that will show both what you hope to accomplish and when you plan to have achieved your objective. This plan could include a marketing plan (possibly with the help of experienced marketing people), a summary of risks and costs involved as well as the expected benefits. Why is this important? Simply because some innovators often tend to overlook the importance of planning and tend to dislike strict and rigorous plans, as they think and feel they restrict their natural creativity and spontaneity.

The third step is to assess what resources will be needed to help the idea to become an innovation: do you have

Clarify your objective

Main goal: Get an objective picture of your idea. Approach: Discuss it with members of your team and/or experts in the area. Be as specific as you can with respect to the product, the service and the process, as well as the expected outcomes.

Plan your action

Main goal: Get practical. Approach: Draw up a plan show what you hope to accomplish and timeline your objectives. This plan could include a marketing plan, a summary of risks and costs, and the expected benefits.

Assess resources needed

Main goal: Actual feasibiltiy test. Approach: Ask yourself, what do you need, what do you have, and how could you get support?

Anticipate possible difficulties

Main goal: Be prepared for dangers and traps ahead. Approach: Scenario analysis recognise various obstacles you may encounter, such as competition, negative customer feedback and loss of resources.

Set timeline

Main goal: Detail key milestones. Approaches: List key constraints, and considering these factors, what will you and your team have accomplished by when?

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or how could you get management sponsorship and support? Do you have or how could you get funding and financial support? Who can support you at different stages, either within your innovation project team or outside? Who can you go to, at different stages, to ensure you do not miss critical expertise?

Through the three step process outlined above, a clearer picture of how to make it happen appears. Now its time to reflect and anticipate the various obstacles you may encounter during your journey (competition, negative responses from customers, loss of management enthusiasm and support, loss of resources, business turndown, etc.), which can all be very useful. This can be done using scenario analysis: What if your competitors generate a similar prototype? What if during the innovation process, support from senior management cools off? It is essential in any innovation project to anticipate difficulties and setbacks in order to preserve the life of your project and your own fighting spirit.

Finally, based on all the information above, a provisional timetable can be established to help you anchor key milestones. What will you, and your team, have accomplished by when? One of the major derailers of innovation projects is the lack of awareness and/or respect for important milestones. Why? Because the idea is so fantastic almost anything can be tolerated. Can it really?

The above steps are similar to project management disciplines. The difference is that you gave birth to your idea and wish to preserve its life and well-being, and that your passion and enthusiasm may occasionally blind you. The above ideas will also help you protect the members of your innovation team along the way, ensuring the maximisation potential for success.

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17. SEEKING AND GETTING FEEDBACKWhen we facilitate leadership development seminars and introduce 360o feedback processes, at Mannaz, we often say that feedback is the lifeblood of organisational life. But why do we stress the importance of seeking and getting feedback when exploring the management of the innovation process?

We all learn from differences and complementarity in viewpoints, and yet many innovators prefer to pursue their vision and can either neglect to seek others viewpoints or neglect the feedback when it is given it to them.

By seeking more feedback from others existing or future clients, experts in the field, trusted colleagues, friends, and experienced managers innovators can often improve the way they themselves manage the innovation process. The saving grace for many of them is that innovation is almost always managed by innovation teams, and high-performance teams provide a climate and a context in which feedback can be shared if there is open communication and trust between their members.

If seeking 360o feedback is as useful for developing leadership skills as it is for helping innovators, the most important feedback to seek is that which may be the most difficult to obtain: customer feedback. In terms of innovation, however, it is not necessarily good to listen to the general feedback from the entire customer base. Innovation comes from two sources: one is market-leading incremental innovation, where customer feedback may be invaluable. Regarding these innovations, it is vital to:

keep lines of communication open with customers, especially lead users, as it will show them that you are tuning into their concerns.

Feedback is important for simple and important reasons Achieving goals is one of the engines of creativity, and feedback is a facilitator of this process (Shalley and Gilson, 2004). People who generate creative ideas and who bring innovation are often highly intuitive, forward-looking people who embrace change easily. They are enthusiastic, passionate, curious and open to new concepts and ideas. They are willing to take risks, are daring and display courage and persistence in the pursuit of innovation. In other words, they share many of the leadership attitudes and behaviours highlighted in the executive summary report of this series, Time to Innovate (sections 13.00 and 14.00). All these great traits often have their flipside any strength is often coupled with allowable weaknesses, for example they pursue their idea so strongly and are so persistent in their pursuit that they often do not seek enough feedback from others. Innovators are so much in love with their idea that they often do not seek the feedback from people who are different from them:

people who focus on facts, figures and realities. people who are practical and pragmatic and who

can help them be more grounded and to take into account facts that they may overlook.

people who are logical and can help them see the pros as well as the cons.

people who can warn them and help them anticipate setbacks.

Why don't innovators tend toseek enough feedback from others?

Innovators are 'in love with their idea' persistent pursuits lock them in their own world.

If they are willing to take feedback...the question is, from whom?

'Left-brain' thinkers offering complementary ideas and different views Customers, experts, managers, etc.

Will the process be embarrassing? What is the best way of facilitating feedback-gathering and boosting interactions?

Instead of one person fighting for all, try to build an innovation team. Team leaders are responsible for building up trust and faciliating open cmmunication.

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monitor progress with them at each development stage test their assumptions ensure their needs are really taken into account adapt and modify their original idea based on the

feedback received keep their minds open and regularly present current

statuses in order to improve the synergies and the final products or services that will be delivered.

For radical innovations, feedback usually comes from business talents or experts, because the reluctant attitude of the general public can be discouraging and misleading. With the competitive need for pre-launch knowledge protection, not much information will be provided in generating customer feedback, because in this circumstance customers with limited information will probably show a different, conservative attitude compared with when they are shown the actual product. This may be the rationale for Steve Jobs famous quotation, People dont know what they want until you show it to them. Would the public have applauded the advent of the iPhone if they had been told it would mean abandoning keyboards on their cell phones... perhaps not?

As mentioned above, there are three main stages of innovation: the last one is retention. Many of our survey respondents mentioned organisational learning as a fundamental way of storing knowledge created and promoting knowledge renewal within the organisation. Feedback and evaluation systems are an effective first step, in the sense that they incorporate many more people, often with distinct knowledge backgrounds and ways of thinking. In this way, innovative ideas and relevant knowledge are dispersed among more people, and implicit knowledge is preserved in a way that facilitates leverage effects.

18. DEALING WITH SETBACKS

Life is a process of becoming a combination of states we have to go throughWhere people fail is that they wish to choose a state and remain in it.- Anas Nin

When you work on something novel, you dont expect to meet with success all along the way; youre more or less acutely aware of the possibility of coming across setbacks. Anyone who has led innovation projects will recognise that setbacks are part of the journey. And yet, their managers, though recognising that innovation is risky, often expect a trouble-free curve and seem surprised when setbacks occur. People who champion untested or yet unproven, but promising ideas, often go through different stages:

Enthusiasm that gives the person, and the team, a lot of energy and confidence in ultimate success. It is like surfing a wave, and progress is fast.

Then things become more difficult than the individual thought, but despite the struggle morale is still high because obstacles were anticipated, even if the efforts required were underestimated.

Then disaster strikes: something totally unexpected happens and confidence is shaken. The moment has come when trust and synergies will help win the battle or impact the ability of the person or the team to carry on, despite the setback.

People recover from setbacks often because advice and support has been provided, and yet progress is slower than anticipated and deadlines may have lapsed. The person and the team may have to negotiate: setbacks may have changed the original idea, and it may be short of the initial hopes and expectations, or it may even exceed them.

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There are, clearly, important lessons for managers in this short description of the five stages innovators, and innovation teams, go through. We will come back to this in our fourth report, The Role of Executives and Managers in Fostering Innovation, and would like to focus here on what innovators can do to anticipate the struggles and setbacks that they will most certainly encounter. They can reflect on previous experiences and ask themselves: What was really unexpected? Did you overcome the problem? Who helped you?

They can, more specifically, consider the following questions: What are the manifestations of this setback? How am I handling it? What effect does it have on me? On the team? Can I identify a setback owner? How can I limit the damage? Who should I talk openly with?

In her book Make it Happen! Kathryn Redway shares the following story:

I once attended a very high-powered meeting in a multinational firm, and asked the question What will happen to your idea? There was a silence, during which someone entered the room. Dont mind me, he said as he spotted an empty chair, just carry on. What were you saying? I repeated the question. He got up, went to the flipchart, drew a perfect curve plotted against the axis of time and effort, and punctuated his contribution with the satisfied remark, This is how things are done here. I noted, You must be a senior manager. Yes, he replied, I am the managing director. And no one tells you when things go wrong? I said. There was a silence. He looked around the room. People were avoiding his gaze. I think you may be right, he admitted. We need to discuss this. We did, and soon discovered why this world-famous company did not score highly for its innovative powers: the most senior person inspired fear rather than respect. Accordingly, setbacks were not reported. As a result he was convinced that every new project succeeded and could not see why experimentation was necessary.

The team are confident in

ultimate success

Enthusiastic

Unexpected, confidence is

shaken

Disaster strikes

May have lapsed, may need

to negotiate

Facing deadlines

Morale is still high because difficulties are

anticipated

Things become difficult

Trust and synergies; advice

and support

Recover

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19. SECURING EXECUTIVE AND MANAGERIAL SUPPORT Survey respondents have stressed the importance of executive sponsorship and support in fostering innovation and in managing the innovation process. We will come back to the critical role of senior executives in our fourth report, The Role of Executives and Managers in Fostering Innovation, and would like here to take the perspective of innovators to focus on how they can secure executive support for their innovation.

Indeed, innovators are often full of enthusiasm, passion and energy, are raring to go, and with a strong belief in the power of their idea. This beautiful passion can blind some of them to the importance of having friends in high

places people who will marshal needed resources, help them overcome unexpected hurdles, remove bureaucratic barriers that may inhibit progress and shield them from organisational noise. A general managers shift of strategic emphasis from explorative activities to exploitative ones shows a significant influence on organisational innovation performance. The personal support and aspiration from innovation managers, ambidextrous managers and from other exploitative units not only facilitates the innovator to go through trial and error, but also to leverage common resources across innovation types and thereby benefit the organisation as a whole. This is the beginning of a virtuous circle:

Supportive

Better innovation performance

Better organisational performance

More supportive

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Thus, finding a sponsor and securing his or her support is important not only to protect the innovation team, but also because the sponsor will often temper the natural enthusiasm and idealism of innovators by his or her realistic approach.

Innovators and innovation teams need to keep clarifying and clarifying again what they are trying to achieve, what they need at different steps and what the expected outcomes are. We are talking here about short, one-page executive summaries regularly shared with the executives. They also need to demonstrate how their idea will benefit the organisation (which they often fail to do, because it seems obvious to them and that they believe that, it goes without saying). They need to start small for example with just one customer to demonstrate the potential impact and value of the innovation they are working on, and resist promising too much, or the impossible. They also need to build an effective and very diverse team, building support alliances with experts from various areas within the organisation and beyond.

In reality, innovators are often not quite sure who their sponsor really is, and who they are dealing with. Sometimes it is within the business unit, sometimes it is within the local branch, and sometimes it may involve the global headquarters. Lets examine two scenarios here: a best case one and a worse case one.

In the best case scenario, what can you learn about your sponsor and/or your boss? What are their aims and values, what do they want for themselves and for others? Do they have a track record of innovation, sponsoring or initiating new projects? What are their strengths and weaknesses? What do they like or not like to do? Check your perceptions with others. How do they like to work and communicate with others? Informal chats? Emails? Reports? Do they talk things through with peers? What pressures do they have at present? What objectives have they been given?

You can now reflect on what motivates you and on the match that may exist with your boss, on how your own profile of strengths and weaknesses balances or replicates your bosss ones, on what are the best ways to communicate with your sponsor on solutions you could offer to your sponsor and on useful proposals you could make. Seek complementarities, and avoid surprises!

In the worst case scenario, your boss and/or your sponsor may not be that sympathetic. Why? Because they are inaccessible? Then send them emails with short summaries of what you need or want to talk about: use the old adage It is better to ask for forgiveness than permission without abusing it! Simply tell him or her: they may not realise that you need regular communication. Or is it that they dont keep you informed? In this case, tell them: think of wider ramifications as they may actually be doing this to protect you. Set the example by keeping them informed yourself; show that you are reliable and respect deadlines. Or is it something different? Has he or she got a closed mind regarding anything new? Then show them whats in it for them and demonstrate they will benefit from your idea. Dont give up, as persistence does pay off. If your organisation offers appeal channels, consider using them, and always start with your bosss boss or ask for a transfer!

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20. LEARNING FROM YOUR COMPETITORSIt is important to know your competitors in order to operate successfully in your business area in the long term: however, benchmarking should not be done for its own sake. Inspecting competitors should be combined with introspection of yourself. What are the strengths for both sides? What about weaknesses? How can we maximise our strengths and mitigate our weaknesses? Are there any practices that our competitors have already performed that we can adopt as well? Rather than quickly responding that we do know our competitors, we may be well advised to consider the following six traps:

Idea: 'We know our competitors extremely well'. Solution: Ask yourself more questions about your competitors, do more research, experience your competitor's product.You can never know your competitor too much.

Idea: Precious data is locked within certain groups while others in need of this Solution: Regular meet-ups, both within top management and/or with experts, within/across departments, within managerial staff and/or with representatives from all levels.

Idea: Rush to win in competition but neglect other underlying issues. Solution: To clearly define problems, listen and respond to customer needs and bear in mind the strategic focus.

Idea: 'Our products are absolutely unique, state of the art!' Solution: To cultivate humility, to anticipate competition and to focus on trends, scenarios and future developments.

Idea: 'Competition is the ultimate drive for productivity and creativity.' Solution: Recognise the role of cooperation. Initial ideas need to be refined again and again; cooperration is key. Use culture and performance appraisal systems to make your organisational culture a competitive and cooperative one!

Complacency

Myopia

The uninformed

The know-all

Internal tension

Solution: Build open, mutually beneficial relationships with your clients. Knowing the reason they chose you rather