Innovation is a popular word. But scratch the surface and you’ll realize that there are widely varying expectations of what we mean by it. And questions like: Is there a process to drive innovation or is it serendipitous? Does it have to be disruptive or can it be incremental? Does it need a separate group like R&D or can it be ingrained? And perhaps most importantly, what is meaningful innovation?
A decade ago, Robert Wolcott, a professor from Northwestern, along with Mohan Sawhney, Inigo Arroniz, and Jiyao Chen of the Kellogg School, set about collecting 500 data points around innovation from managers in innovation roles across 19 corporations including companies like Boeing, Chamberlain Group, ConocoPhilips, DuPont, eBay, FedEx, Microsoft, Motorola, and Sony. They took the results, whittled them down to 100 measures, and further tested them to a set of 12, framed within 4 quadrants of what has come to be known as the “innovation radar.” These dimensions of innovation and contributing factors are a way to not just understand the type and scope of innovation within a company but also to frame a strategy for it. There are 12 directional vectors aligned to a 360-degree view framed by offerings, customers, process, and presence.
Innovation around an offering, driven by platforms and/or solutions, are perhaps the most obvious measure of which many examples abound. The pharmaceutical industry, for one, is powered by R&D that delivers innovation through great new compounds, but the level of process or customer innovation is quite low.
Innovation driven by customer experience and/or value, exemplified by Ritz-Carlton hotels or concierge medicine practices in healthcare, where high-touch personalized engagement is the differentiator instead of the product itself (that is, the hotel room or the diagnosis/prescription).
Process innovation around an organization and/or supply chain could be focused on making a product affordable, such as Nokia making inexpensive phones to target emerging markets rather than feature-rich smartphones. Or the innovations can be in the supply chain such as P&G’s continuous replenishment model of having “just-in-time” stocks to retailers based on projected demand. Healthcare process innovation is in its infancy, but the use of biometrics for real-time monitoring of at-risk and postoperative patients by hospital systems is one such example.
Innovation around a brand and channels (networks) is framed as presence—and direct-to-patient advertising started in the 90s (although it’s been legal since 1985), triggered in part by the FDA’s easing of the need for a complete listing of side effects on infomercials. Today, a similar situation exists with social media; while legal to promote and participate on, the rules of engagement aren’t clearly defined.
According to ongoing data capture as part of the initiative, Wolcott states that when looking to define a strategy for innovation, it is best to focus on 2 to 5 of the 12 measures and unidirectional innovation (who, what, how, or where) has a far better shot at being meaningful and becoming operationalized than a broad approach. So at the risk of stating the obvious, it’s critical for innovation to have a mission. Best practices seldom drive anything that can be the best. But setting about an innovation goal using a directional framework such as this one is like asking a good open-ended question. After all, the quality of the answers we get often depend on the quality of the questions we ask.