Quick Returns And Innovation

While it is globally acknowledged that the future belongs to organizations that can innovate – the vast majority of the emerging companies are still struggling with making innovation work. Why is it so?

The predominant reason is with the measures of performance. Historically when a firm has been very performance driven, then thatIdea_Informer_logo becomes a culture. In every action of the firm, the inherent expectation of performance and metrics get embedded. When an innovation program gets initiated, it is natural for such a firm to extrapolate the existing measures that it uses for its mature business for measuring success of the innovation program. While I am not suggesting even for a minute that innovation programs or efforts should not have measures associated; what creates problem is when measures applicable to existing and mature businesses are extended to the innovation program which is predominantly exploratory in dynamics.

One of the ways to re-look at this is to set clear expectations from the innovation program. If the CxO level team sets the right strategic expectations from the program, then leaders from the execution layers can create appropriate program structures with the right measures that don’t stifle performance. When innovation experiments fail, organization programs must have the right routines to handle them. This should be in such a way that they have to encourage the employee to re-join the innovation program again. This is one of the biggest challenges in many institutions.

One of the companies that approached us for innovation services, had in place an innovation program, which was not as effective as the CEO expected. When we analyzed their program, we found while many of the initial program set-up routines were appropriate, the parameters of success as defined for the innovation program was very short sighted. Instead of encouraging experimentation, the metrics were highly result oriented in terms of short-term gains. This prevented many good ideas and experimentation to take off in the system. The focus on ROI was stifling free thinking.

A good innovation program encourages experimentation but has a set of check gates that are able to spot and further meaningful ideas in a systematic manner. Innovation programs must have staged review so as to exact maximum participation. As more people participate in the program, the ideas must be validated in stages and moved to the next stage with adequate support of resources. Success in an innovation program comes from open appreciation to the willingness to experiment, coupled with a keen intuition on identifying aligned proposals and providing them with concrete support in terms of resource and time. And there is no defined time frame when it comes to gestation period of an innovation program, however it can definitely be catalyzed. Senior management require patience and long-term commitment if they want to benefit from their innovation programs in the true spirit of the game!

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