Recently, the CEO of a leading financial institution asked us, "How do we kick-start innovation throughout the organization and how do I make it self-sustaining?" This CEO seemed to be
'done' with hiring companies or consultants to do one-off innovation projects only to find that the momentum stopped the day they walked out of the door. And clearly she did not believe that
one specific outside company could change the corporate culture by themselves.
So how do you create the momentum internally? Here's our response to the CEO:
Based on our work in a
variety of industries, and having witnessed numerous innovation successes and failures, we posit four steps that you, the major corporate CEO, must be willing to take to create a culture of
innovation. These are:
1. Engender the values of innovation throughout the organization -- starting at the top.
No delegating here, senior
management, beginning with you as innovation champion, must be visibly and strongly supportive of the entire process if you hope to create a culture of innovation.
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However, this alone, is not
enough. The best way to accelerate change within the organization is to adopt a philosophy of "Open Innovation" which weaves outside-in thinking into the process.
We suggest
creating:
- An Advisory Board for Innovation with members from inside and outside the company
- A Senior Management Steering Committee, with a full-time employee
responsible for Innovation
- An internal skills development program.
2. Identify 5 - 8 Mission-Critical Innovation Platforms that are must-win territories
over the next 3 - 5 years.
These platforms can be based on recognized customer needs or technology. In either case they must be heavily driven by the voice of
your customer. Importantly, once these platforms are defined, they will set the organization's agenda for innovation for the next 3 - 5 years, enabling the company to deliver on its growth
strategy. These platforms should be used to identify and prioritize action-oriented projects, on an annual basis, with success measured in terms of the number of projects launched and incremental
revenue generated from them.
3. Identify and cultivate core capabilities.
While we strongly believe that companies must develop internal
innovation capabilities, we also believe that capability needs can vary significantly based on the Mission-Critical Platform and project. As a result, we believe the organization needs to create an
Open Innovation process, which actively encourages reaching out to the right partners, (i.e. technology, business insight, data collaboration, predictive modeling capabilities, ASPs, etc.). For each
Mission-Critical Platform, the best-in-class team must be assembled through a combination of outside and internal resources.
4. Outline a skeleton innovation process with the
flexibility required for your industry.
These steps include such areas as Open Innovation Networking (e.g. accessing input and knowledge via Customers, Partnerships,
Experts, Collaborators, etc.), Insight Generation, Opportunity Mapping, Rapid Prototyping, Building and Refining and Roadmapping. The process should be flexible enough to be adapted to the needs of
any project, customer or technology.
In the interest of accessing best-in-class resources to guide you through this process, you will need to call on more than one external innovation
partner to kick-start the process of creating a culture of innovation. A good innovation partner must be willing and flexible enough to collaborate with other outside specialist firms and agencies
(e.g. advertising, management consulting, tech etc.) to help clients achieve their goals. Many outside partners just want to be the client gate-keepers and this can stifle innovation.
Above
all else, an in-depth understanding of the customer, whether small business owner, manager in a larger corporation, or a mom with kids in tow -is the cornerstone that insures the voice of the customer
remains integral to the process. Specifically, the voice of the customer must be central to creating the outside advisory panel, defining the Mission-Critical Platforms and insuring that projects are
customer-driven.
In summary, your desire to foster a culture of innovation within your company is laudable, indeed necessary to assure your continued success in an ever-more competitive
market. However, the simple fact of the matter is, that a culture of innovation will not bloom without careful nurture, including a good dose of outside fertilization.
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