It's an exciting time to be working on innovation. Strong public markets, rapidly developing technology and fierce competition across all sectors are driving massive investment. New products, services, experiences and processes are top of mind for leaders, getting the attention of C-suites and boards. In order to compete, companies have no choice but to innovate. Leaders are finding that the success of the businesses and their personal trajectories is now closely tied to their ability to quickly translate innovative ideas to operable concepts that deliver transformational outcomes.
This new dynamic can be uncomfortable. With greater visibility within organizations and higher levels of scrutiny, the pressure to demonstrate returns on innovation is extreme. And executives are dissatisfied. According to a recent Arthur D. Little report, “Systematizing Breakthrough Innovation,” fully 88 percent of companies are unsatisfied with the outcomes of their innovation investments. A bevy of other executive surveys show similar results, as do Point B's conversations with executives at Fortune 500 companies. When we talk to executives about how their innovation initiatives are playing out, the response is universal: Results take too long, and outcomes don’t resemble the original intent.
Point B's Perspective
There are some common reasons for the disconnect between innovation and impact:
- The skills and tools to innovate are not the same as those required to run a business.
- Innovation teams rush new concepts to deployment, getting tactical when they should remain strategic.
- Execution teams make compromises instead of adjustments.
- Leaders make binary decisions when they should be multi-faceted.
Point B charts a clear path forward for putting innovation into action. The dynamics that jeopardize success can be addressed by filling organizational and operating gaps and by making small changes in how innovation, execution and leadership teams think, the tools they use and the activities they prioritize.
The solution rests in four categories of activities that cover the execution lifecycle. Some are probably already being done. Some can be executed with little effort. Others require a harder look at how the organization is working. However, none require major change in the organization or for people responsible for delivering a return on innovation.
Prepare for success
Success is built on strong, clear leadership alignment and support which sets the direction for the organization. Leaders need to come together on expected outcomes and be committed to communicating their support.
- Secure resources. Have the right people, processes and technology in place for execution. When trade-offs must be made, adjust approach and expectations accordingly.
- Determine the impact of internal and external factors on timelines. The success of execution is affected by what is happening both inside and outside the organization.
Develop the infrastructure to execute
- Assemble cross-functional teams. Make sure that all functional stakeholders are "in" during the initial stages of execution, and that they have their leadership's commitment to support the initiative.
- Develop hypotheses. Successful execution takes a clear vision of the behavior you want to see, its impact on the organization, and what is required to deliver those behaviors.
- Craft a learning plan. Such a plan provides execution teams with a roadmap for testing hypotheses in a way that allows organizations to plan for required resources and understand timeline expectations.
Nail the details
- Test and iterate. Engineer pilots to learn rather than to launch. Rooting them in iteration allows for continuous, efficient improvements that lead to desired outcomes.
- Pivot rather than change. Use a learning plan to make many small pivots to concepts and their execution, while avoiding wholesale changes that impede speed or the precision of outcomes.
- Know when the organization is ready to launch. A realistic, continuous assessment of organizational readiness during the testing phase helps ensure that execution does not stumble in the last mile.
Ensure lasting outcomes
- Transition to operations. Operating team involvement during pre-launch activities helps ensure a smooth transition from innovation teams. Abrupt hand-offs jeopardize success.
- Monitor and assess. It often takes time for financial planning and analysis functions to integrate new activities. Interim monitoring functions can be tailored to the innovation to meet the unique assessment needs of new operations.
The Bottom Line
The "how" of innovation doesn't happen overnight. Organizations that are innovation leaders hone their competencies and capabilities over time. The execution lifecycle described above provides a general roadmap for putting innovation into action. However, the actual activities and focus for each organization depend on the types of innovation they want to develop, together with their existing capabilities and the maturity of their execution teams. It's all connected.