Have you got an innovation plan?
Every company starts out with an idea for a product or service. If it’s a good idea, the company may prosper. Management teams that succeed tend to be very good at building efficient teams and processes. They are excellent at optimizing resource allocation for their current business.
However, as sure as night follows day, competitors have a nasty habit of spotting success and bringing their own services to the market. So, to ensure survival, and better still growth, your business will need to innovate in order to develop new services.
Innovation is risky. You are entering unknown territory. You are almost certainly leaving your comfort zone. It becomes quickly apparent that different skillsets are needed to build successful innovations inside a well-established firm. A good innovation management plan can reduce risk, identify better ideas, deliver faster outcomes and generate higher returns.
There are probably 4 distinct stages to innovation. Different types of people excel at different points in an effective innovation process. We can group them under archetypes.
Innovation Archetypes
Empath
They are good at empathy! They can see where people encounter problems and understand how that feels. They have a talent for spotting ways in which an improved service could provide immediate gains for customers to make their work or lives easier. They have strong communication skills that allow them to frame the opportunity and describe it in a compelling way to their stakeholders. But, they are not always the best people to take the idea forward in a practical way.
Inventor
They know how to make stuff. They can take a set of tools and resources and work out how to put a new service together. They tinker, test and iterate until they have developed a working prototype. But they are not always good at selling stuff.
Explorer
These people know how to scale ideas. They’re good at finding new markets and understanding new types of customers. They are natural traders. They can sit down with new types of customers and bargain. They are great at developing pricing, volumes, packaging and all of the other modalities of the deal. But they can quickly get bored with the details of running a steady-state business.
Farmer
Once they have the business, these folks are great at sweating the assets, the customers & the process. No one will work harder to keep things on track and deliver.
Now, if you accept my analysis, it is pretty clear that not only do we have very different types of people required for each stage of the innovation process, but we also have very different measures of success.
Innovation Stage Gates
Spot needs: Empaths are looking for ideas that resonate with a customer. Their proof points are to establish whether a customer really needs something and needs it badly enough to pay for it. They are trying to convince the business that there may be a market in these newly identified needs.
Invent working solutions: Inventors are trying to work out how to build the solution in a robust manner.
Discover Markets: Explorers need to find the market & establish market traction.
Harvest Returns: Farmers need to deliver a robust and repeatable process that is profitable.
Each step needs different types of people & different measures of success. The C Level may not be the right people to work on the first 3 stages. Afterall, it is likely that C Level staff are Farmers – especially in established firms. If they are Farmers, then they may struggle to understand how to manage early stage innovation success and to determine innovation investment strategies for each stage gate. Thereafter, they will need to ensure that they hire the right types of people for each stage of the innovation process; people who are very different to them. Finally, they need to establish robust processes to deliver innovation through each stage gate. That’s a tough management challenge.
Questions that you need to answer in your business may include:
- What is our strategy for growth? Is innovation a strategy for growth in our business?
- How is our Organizational Design optimised for Innovation?
- What are our talent management plans to source and allocate the right people to the right work at each stage in the innovation process?
- What are the innovation stage gates in our business?
- What are our measures of success for innovation?
Innovation is never easy, but it is an essential business practice that can help to deliver growth and thus a long and healthy life for your business.
So, what is your innovation plan?