Invitation to participate
January 28, 2010
Successful innovation comes when a holistic or “Total Innovation” approach is applied.
Often individual imperatives are missing or in place but lack or miss others.
What are your barriers to Innovation, what is missing, lacking or weakest area?
Click to participate: http://innovationcoach.brightidea.com/ideas
Observe & Measure: When Validating Innovation, ‘What’s Measured Is Treasured’
January 25, 2010
Innovation may be vital to creating competitive advantage.
But how costly is ineffective innovation? That is, if a company sets out on a new product or service development initiative – and that effort fails along the way for whatever reason – what has been lost? Investments in time, effort, capital – even reputation?
What if the company set in place a practice of observing and measuring innovation at select or pre-set milestones along the way? Roadblocks, sticking points or issue that otherwise might have doomed a project to failure would have been identified, reported and measured – even corrected – along the way.
Success might not have been assured. But there would have been a higher likelihood of averting failure, or at least identifying troublesome issues early on.
Innovation is meaningless without attaching measurable goals to an initiative. Yet, many organizations fail to give meaning and measurability to their programs. They don’t measure the percentage of income that comes from products younger than five years old, or new product sales, or metrics that serve as innovation dashboard to track innovation activities, or R&D spending or headcount.
The importance of having measurable goals in the innovation process cannot be overlooked – or overstated. Yet, it often is both overlooked and understated. Many organizations go through all the right motions – they plan a new product, service or internal initiative launch. They gather the team, provide the specs, and let them loose with an imperative.
But no metrics have been set out to track their success. And without the ability to measure, how can you know whether the initiative is successful?
That’s where observation and measurement come in. Observation means tracking or watching how the team advances on the path of innovation. Measurability requires that accomplishments are weighed against milestones. Done well, the end result is an initiative that adheres to the intended vision, mission or strategy.
Simply put, without goals – which then are observed and measured (and supported by associated rewards), things won’t happen. Observation, measurement and tracking of NPD results are essential to helping ensure optimal ROI.
How is this done? First, create your baselines, with initial observations and measurements. Then capture the time to each gate, the time spent inside each gate, etc. Look for improvements in terms of reduction of time spent within each gate.
Once a product is launched, a key metric is the ratio of new product sales to overall sales. One method would be to track historical new product sales for the first three years after launch versus total sales. This is your baseline. Next, set a target goal for this ratio, based on your needs and taking into consideration your competitive environment and the competition’s baseline. This would be further calibrated to account for the product lifestyle in a particular industry, but in any case, new product sales is measured as a percentage of the total.
Observation and measurement also can be fascinating to watch as headway is made. You see your margins grow, as the right mix of new products come on-stream.
This is part of an overall process of continuous improvement. Plan. Do. Check. Act. Repeat – or revise. Things won’t always go as planned, so take corrective actions and make ongoing course corrections.
Product lifecycles keep getting shorter and shorter, which mandates accelerated NPD cycles. In the personal care arena, for example, lifecycles are only two to three years. So each big idea has tremendous potential value and it’s important not to kill a potential success too early.
Some believe investment into R&D can help ensure success. Actually, R&D spend is no guarantee for Innovation success. In its simplest terms, what gets measured gets done.
By Robert Brands with Jeff Zbar
Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).
Value Creation: The Ultimate Goal of Innovation
January 19, 2010
Why innovate?
Some would argue that companies innovate to achieve a heightened competitive advantage, streamline the organization, or create intellectual property – including patents, trademarks and other protected property – that create value in the portfolio.
Many reason and rationales can be argued for the pursuit of innovation. Yet no purpose for or result from innovation can be more compelling than Value Creation. This metric is the ultimate measure of return on investment when measuring innovation’s role in creating value.
Simply put: Innovation done well drives value creation – for the organization, its customers, its internal stakeholders and its external shareholders.
Successful innovation turns ideas into money. All the processes, creativity, time, sweat, research, dreaming, refining, modeling and retesting transform effort into tangible, valuable results.
This includes innovation that touches all sectors in the company or organization – not just in the creation of a new product or service. Enhancing the business model or networking, enabling a new core process, creating a new channel, brand or customer experience delivery model, or offering a new product system, boosting product performance, or providing a new service each creates value.
Nowhere is this more relevant and apparent than in the acquisition process. If one were to look at acquisitions with and without a patent portfolio, I would argue that a well-created and -managed patent or IP portfolio can double company value. My former company, Airspray, created of the novel packaging and dispensing process that turned liquid soap into foam. It was a company with a typical value of 7-8x EBIT. Yet, the addition of this patent to its portfolio resulted in 15x EBIT paid when the company was acquired in 2006.
This is especially important in today’s market. Current economics continue to hold down already devalued corporate stock prices. Companies are challenged to find ways to boost their value to stakeholders – as well as to keep customers and prospects engaged and purchasing goods. Value creation borne from innovation can be critical indeed. As evident in the Airspray example, one item in our patent portfolio almost doubled the EBIT paid at acquisition. This example is not unique, but was the result of painstaking and thoughtful focus on value created by innovation.
Moreover, value creation and innovation done well can immeasurable enhance the corporate brand. Between adding new products, reviving the corporate dress, even launching new marketing creative or advertising campaigns, customer value can be created through the value-added components and enhanced public face of these endeavors.
Of course, it’s essential to find that delicate balance between cost, price, and return. Balance is found, in part, by seeking stakeholder input and customer feedback during development of any innovation process.
The arguments for innovation are, frankly, inarguable. Value, brand enhancement, share price and perception among various stakeholders can be elevated by innovation done well. Add to the equation the inclusion of intellectual property derived during the process, and the overall ROI can be well worth the investment.
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By Robert Brands with Jeff Zbar
Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).
‘Is This Yours?’ In The Innovation Process, The Answer Defines Ownership
January 13, 2010
“Excuse me, is this yours?”
If someone asked members of your Innovation Team about “ownership” of a current initiative, would individuals reply, “Yes”?
Or would the people involved point to the team leader, the CEO or someone else – someone other than themselves? Would they reply, “No, that’s his”?
I spoke recently with a CEO of a consumer products company who expressed disappointment that an idea for an exciting new wrinkle in sunglasses technology had faltered. In doing so, others had beaten the company to market.
Why did this happen? The “Leader” admitted he’d failed to sell the idea. “Others just didn’t get it,” he said. “Their hearts weren’t in it. They were moving forward out of duty, not out of passion. And we dropped the ball.”
In the world of Innovation, it’s the Chief Innovation Officer’s job to marshal forces, to empower, to inspire, and to transform team members into stakeholders of the process or project. In short, it’s to create and encourage a spirit of Ownership.
As one of the 10 key Innovation Imperatives “Ownership” ranks up there in importance (http://www.robertsrulesofinnovation.com/category/blogs ) with Ideation, Risk, Results, Idea Management and all the others.
Put as a business equation, Ownership Equals Accountability Equals the Foundation of Innovation. Without accountability, ideas stall. Progress dies on the vine of best intentions. Any real chance at success is lost.
Without ownership, positive results are almost impossible to achieve. A team member cannot point to the Chief Innovation Officer or team leader as a project’s or initiative’s owner. Every participant along the innovation process’s chain must embrace accountability as a champion of the idea, the development process, the success – and the failure – that may come in tow.
To be sure, Champions at the highest level – like a CIO – have the authority and (and should have the passion) to garner organizational respect needed to push Innovation from the idea stage to development and ultimately to fruition. Champions build consensus, convince others to take calculated risks and to work outside their comfort zone.
But Ownership must extend beyond one single Champion. To be sure, a champion at the highest level ultimately drives projects forward. But “ownership” must be claimed by all involved, encouraged by the senior project manager, but wholeheartedly embraced across the organization.
How will you know a project has been welcomed into the hearts of its team? Ask one question:
“Excuse me, is this yours?”
The response will give you your answer.
By Robert Brands with Jeff Zbar
Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).
Business Week Column: Innovation Made Incarnate
January 12, 2010
Much of Apple’s success relies on the inspiration CEO Steve Jobs has fostered in employees. Here are seven steps to turn inspiration into innovation
See: www.businessweek.com/innovation
When Apple (AAPL) unveils its iSlate in late January, the tablet computer will be just the latest wowing of the world by the pioneering computer company. With its iPhone, iPod, and MacBook laptops, plus the original Macintosh computer itself (and the “1984″ TV commercial that pitched it), Apple’s innovation has changed technology—and the people who use it.
http://www.businessweek.com/innovate/content/jan2010/id2010017_541888.htm
The Year in Innovation
January 11, 2010
The innovation industry took a hit this year, as executives dialed back on initiatives—and paid the price. But some encouraging trends also emerged.
In 2009 the world was no longer flat; much of it was flat broke. Deflated by slumping sales and income, companies roundly did what innovation consultants say they never should—they cut spending on research and development. The U.S. drug industry, historically one of the most lavish spenders on research and development, announced the elimination of a record 69,000 jobs this year, up 60% from 2008. At many companies, quick hits and line extensions replaced more costly, though potentially more rewarding, investments in game-changing inventions. (Source: Business Week)
Innovation: Training & Coaching, Business Overlooked Imperative
January 5, 2010
Smart companies often pride themselves on training programs that introduce or enhance employees’ knowledge of corporate business practices. They promote mentoring initiatives that pair seasoned execs with rising talent. They create booklets or PDFs on corporate policy – and implore staff to read them.
But introduce a business innovation initiative, and those involved are expected to just know how things are done. They’re supposed to possess some innate awareness of the concepts, the best practices, the goals, milestones and targeted end-game.
It doesn’t work that way.
Innovation is a learned concept. Training and coaching is the forgotten imperative in the process of innovation. For best practices in the pursuit of innovation have to be shared to be learned – and mastered.
From the Chief Innovation Officer (CIO) to the innovation team to rank-and-file employees who will implement, follow through or carry forth on the fruits of innovation, people don’t just know. They’re taught.
Organizations whose teams are not trained and coached in its unique approach to the imperatives of innovation are destined to amass a litany of failed projects.
For example, a major multinational launched a new Innovation initiative with the hopes of turn-around renewed profitability and growth. After much initial excitement and visibility, expected results did not materialize – and in the turn-around world, false starts are more costly for an organization than starts or restarts.
What happened? The team involved basic project management training. After a course of such training and coaching, associates had gained a common language and understanding. Progress was realized, and the company today remains on a growth path.
Training and coaching is vital to transmitting the organization’s unique approach to innovation – and ensuring people adhere to its practices. Proper hiring, training and coaching is the way to create, reinforce and enhance company culture and mindset. At its root, training and coaching introduces people to the organization’s vision, mission, strategy and objectives, and points everyone’s compass toward True North.
Training and coaching should cover the lot – from the unique way ideation is treated, to the unique way ideas are cataloged and approached; teams are inspired, formed and managed; risk is assessed; new product development is explored; ownership is encouraged; value is created; accountability is attached; metrics are observed and measured; net results are rewarded; and yes, how teams are trained and coached.
Training and coaching is developed and delivered on a continuum. No sooner are existing policies and best practices discussed, then new procedures are introduced to further the organization’s pursuit of innovation.
Continuity is the key. Training helps your team constantly improve its skill set, through new techniques in ideation, process experience and intra-organizational communication of best practices. Ongoing reinforcement helps employees understand their place and aspire to greatness on the New Product Development team (whether that “product” is a product, a service or an internal practice).
This goes beyond the team. Trainers and coaches need continuous training and coaching, as well. Even the CIO at times requires training and coaching on evolving corporate innovation practices.
Alas, training and coaching often is lost or last as companies often believe they have little time and money to fund these efforts. Best of breed companies have earmarked a dedicated budget to training and coaching.
Why? Because they realize the downside of not training – and retraining – their people in the process of innovation is to be mired in mediocrity.
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