Setting the Proper Groundwork for Innovation Success
If you find innovation challenging, you’re definitely not alone. There are frameworks, and the process du jour, but there are also many headaches and struggles associated with ‘being innovative.’ It doesn’t have the same set of rules, guardrails, or recognized industry practices like our dear friends in finance, accounting, marketing, or even product management have to help usher it along.
Innovation is a discipline, like any other part of an organization. It needs a process, evaluation mechanisms, ecosystems to let it thrive, and executive support to set it on the correct path.
Over the years, we’ve encountered many challenges in the organizations we’ve helped to innovate. In this post, I’ll share some of the more common frustrations that pop up at various parts of the innovation process.
Are You Setting Your Organization Up for Innovation Success?
Setting the proper stage for your innovation efforts to build on is critical. Your innovation teams are going to apply rigorous and standardized evaluations in order to prioritize innovative ideas. They’ll make sure the organization understands:
- Why are we innovating?
- What problem are we trying to solve?
- Where does it live?
- What’s our risk tolerance?
- How much runway do they have?
- What do we considered valuable?
Answering these questions helps establish a logical path forward for new ideas and sharpens the focus of the innovation efforts. Without it, the team can take on too many projects that could be considered out of scope, which results in…
Lacking Proper Portfolio Management
Teams need an understanding of where they can hunt for new ideas, how risky they can be, and how long they have to work on initiatives. This can all be tied back to why your innovation team exists, and the way they manage their portfolio. If you are over-indexed on evolutionary ideas, you need to start thinking big.
Without this approach, innovation teams will consistently fail to articulate the potential value of riskier/longer-term ideas—and not because they aren’t smart or capable. It is always easier to quantify the value of something nearer-term and closer to the current business. Naturally, teams will gravitate towards the shorter term, where the value is more tangible and easily realized.
While this is great and can give validity to the innovation team for earning some small or quick wins, it can lead to the innovation group being a catch-all of work. "My team is swamped," says Product Strategy; "Let’s kick this over to innovation!" Eventually, this can turn the team into a special projects unit.
Portfolio management helps set the stage for where to hunt, techniques to leverage, and how to guide the efforts of the innovation team. It’s critical from the onset that you have a clear understanding of measurable targets and what the success criteria is at each stage. (Read Innovation Portfolios and Keying In On Your Minimum Viable Idea for more on this.)
This ties in closely with another of the obstacles to innovation we see often, which is…
A Lack of Desire to Truly Innovate
Innovation starts out hot; you generate a lot of ideas, find a few you like, and begin to put them together. You are gathering feedback, iterating on the concept…
But you hit a wall, and the goal posts keep shifting. Innovation is sexy, but if the unit is mostly window dressing, it’s not going to perform well if at all In most organizations, you absolutely need executive buy-in, as the imperative (and budget) to innovate should come from the top. Again, this is why your innovation team is key. In evaluating and proving the value of the idea amongst their team, they’re delivering the data-backed analysis you’re going to need to win buy-in to move your best ideas forward.
And of course, there’s always…
Failure to Understand the Costs Associated with Innovation
Yes, ideas are cheap. However, validating, concept development, prototyping—there are real dollars there. I’m not advocating that you throw caution to the wind and break the bank to fund innovation, but there needs to be a fair chunk of change that allows for exploration. . Decision-makers and funders have to understand the value of the innovation team and process—and that the initial outlay of cash required to test and prioritize innovative ideas can save them in the long run.
Depending on why you are innovating and how big you’re trying to think, funders must realize that the innovation team is a separate entity in need of a dedicated, skilled workforce. The mantra, “Innovation is everyone’s job,” can be dangerous, as it too often becomes side-work outside of the everyday. Many major companies’ job descriptions throw innovation into the mix of skills they’d like to see in their ideal candidates, but very few are actually measured on it, let alone expected to perform.
Some organizations have an idea management platform, which is a good start but needs to be executed correctly. Having a clear path for what happens to good ideas is a great next step.
A closely related and sometimes overlapping challenge is…
Not Having Enough Runway
Innovation is an easy target when times are tough. Are you going to cut that which is already performing, or the “maybe, hopefully one day” ideas that haven’t yet had a chance to get off the ground? Executives are often risk-averse that unquantifiable outcomes are simply unacceptable.
By design, a successful innovation team is already working away from the core—sort of out in left field on their own. If you needed to quickly trim a few million dollars, what other box would you need to check aside from "not supporting core, revenue-producing BAU*"?
(*Business As Usual, for those lucky enough not to suffer from acronym saturation and in need of a definition here.)
And then there is the scourge of…
Extreme Revenue Targets
I was once told that if it isn’t a $25M idea, the company isn’t interested. At the time, that would have been about 25% of annual revenue for the organization.
What a litmus test to hang over the heads of your innovators!
We all run into one or even all of these along our innovation journeys. The key is to recognize and course-correct before the speed bump becomes a sinkhole. At Skookum, we have helped to identify and stabilize innovation efforts in multiple industries such as retail, financial services, and healthcare—just to name a few.
If you’re running into trouble or experiencing costly speed bumps in your innovation process, we can help. Get in touch with our team to learn more.