Business Management Blog

Innovation is very much a capability in its own right. For an organization to be innovative, all aspects of a capability must be considered and must be well honed. And as the level of sophistication in the innovation capability increases, so does the value the organization reaps. Most people are at the “innovation as an event” level. They have brainstorming sessions or hold contests to generate new ideas. If the idea is a good one, there is some value added to the organization.

In some cases, the idea may even lead to tremendous value. However, there is generally a huge amount of transformation between the idea generated in an event and its realization. At a more sophisticated level, innovation is more than an event and becomes part of a process. That is, the organization has a structure in place to define problems, generate and evaluate ideas, and develop action plans to implement those ideas. The result is a realistic, deliverable solution based on an organizational problem. However, the problem with both of these is that innovation is reactionary and discrete. It only occurs when someone decides it is time to innovate.

Innovation as a capability, however, creates exponential value. In the innovation-as-capability world, people innovate not only to solve the problems that are presented to them, but in everything they do. They continuously or even radically improve their products, processes, and organization. Innovation as a capability is comprised of the five components that make up all capabilities:

Strategy and Customers. A strategy is needed to decide when, where, and how innovation will be used within the organization. Some companies use innovation when in crisis mode only. “We have a major customer who is threatening to leave us if we cannot get him his shipment today. What are we going to do?” Of course this level of reactive innovation does little to differentiate a company from the competition, and just delays the sinking of the ship. Innovation must be pervasive and perpetual: everyone, everywhere, all of the time. Innovation must be seen as the key currency within the company.

Measures and Performance. Innovation, as with any capability, needs to be measurable. But what is being measured? Should innovation be measured in a negative way, such as scapegoating for failure to solve a complex problem? Or should innovation be a core measure, one which determines career progression and compensation for everyone in the company? What kind of measures are used? Are they focused on business outcomes and results?

Process. Is innovation random and subject to divine intervention, or is there a standard model used for targeting, generating, and selecting innovative ideas? Is divergent thinking encouraged before converging on best ideas? Is the physical environment stale, businesslike, and siloed, or is it conducive to innovative thinking and collaboration?

People. Is the culture one of “praying that it will work,” or is it one that values innovation and deems it necessary for success? Is innovation viewed skeptically as “phony-creative,” or is innovation done without thinking about it? Is innovation led by the “last one to step back,” or is everyone accountable? Are innovation skills regarded as being the property of a select few who show curiosity, or are innovation skills valued above all others within the organization?

Technology. Are groupware tools used to help enable collaboration among employees, customers, and suppliers? Are decisions made based on gut feel, or are they supported by real data? Are ideas lost in the ether of the organization, or are they maintained in idea banks to facilitate the capture and dissemination of innovative thinking?