Are You Wasting $ on Innovation?

by

Flushing-money

Companies are increasing their innovation spend year-over-year, but are they effectively wasting the investment? In some cases, yes. Why do I think this? Let me start by asking another question: Do smart leaders throw money at a problem in hopes that it resolves itself? No. So, why do we believe that if we just invest money in generating and developing ideas that we are on the path to success? A lack of true readiness coupled with innovation immaturity can quickly create a situation where some of those investment dollars are being wasted instead of well spent – no matter how much $$ we throw at it…

How does a company create an environment and become mature related to innovation? Here are a few focus areas to consider and questions to ask yourself:

  • Company and/or Business Culture: Is yours conducive for thinking? What kind of thinking (independent, collaborative, etc.)?
  • Industry / Customer Base: What is going on around you and your company that is driving the need for you to be innovative?
  • Partnership capacity: Does it make sense to partner with others to innovate? Can you do it all internally and truly be successful?
  • Processes: Do you have processes to support idea generation? Would they support open innovation? How about customer-led innovation?
  • Governance: Do you have a vetting system in place to help funnel ideas so that the most impactful ones move from ideas to products or services?
  • Measures: How do you measure success? Do you have key performance indicators that allow you to understand if you are achieving an ROI? Or even if your time-to-market is efficient? Maybe a post-mortem analysis to continuously improve measures and processes?

In addition, investing some time and resources up front towards establishing an infrastructure around the above items is a core building block, but you can’t stop there. Now that you have a foundation, this is where it gets fun. Start to look at how you can progress and develop an innovation culture (use the following “levels” as guidance) to help you understand if you are maturing or just hanging out with the status quo crowd:

  1. Initial (Ad hoc): informal, spotty, one-off
  2. Repeatable: informal standardization, basic collaboration, no plans
  3. Defined: defined processes, knowledge sharing, documented strategy
  4. Managed: Management-driven strategy and execution, linked initiatives, governance and metrics in place
  5. Optimizing / Transforming: Transparency, metric refinement, continuous improvement, leveraging partnerships

Many companies are known for innovation (Nike, Apple, Amazon, etc.). That’s when you are truly mature – because your user base also knows that you are innovative. I could internally believe that I am great at innovation, but what does it matter if my products/services don’t feel that way to my user base? As you may consider what this means to you, remember that there is no “end-all-be-all maturity model” that fits everyone, but when you have a foundation, culture and support system in place the investment into innovation can thrive and take you farther as you progress in your maturity. Again, if you haven’t set up an environment where it will thrive, then you’re likely flushing a % of your innovation spend down the proverbial toilet!

 

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