By M. Isi Eromosele

In order to survive, compete and grow in a global economy, businesses must innovate.

Innovation is often about small, incremental changes to products, services and processes. It involves all managers in every department from Finance to Customer Service. It should be planned and managed as a core business process covering all parts of an enterprise.

It needs to be integrated into the business at both strategic and operational levels. It is the core business skill, the heart of the business.

Planning and Innovation

Innovation needs to be aligned with strategy and the business planning process.  Innovation activities must be driven by strategy and current business imperatives.The extent and type of innovation you practice should be determined by current business performance and future expectations and by your organization’s tolerance for risk.

For organizations heavily involved in process improvement, product development and market development, they can probably innovate to a greater degree with existing resources and skills.  New product ideas tend to be focused on extending the existing range of products rather than being truly innovative.

In situations where a business must address a key issue or crisis, new capabilities and resources might be necessary. A company breaking into a new market with its current product range might need to acquire new manufacturing or sales capabilities.

For truly innovative strategies, in areas such New Business Development and Strategic Change, the acquisition of new resources, capabilities, ideas and possibly even leadership could be necessary.

How far innovation is integrated with a business’ strategy is also dependant upon a business’ appetite for risk and its risk profile. Differing types of innovation strategies and projects have different risks. A balanced portfolio of innovation projects should be adopted when assessing the risk factors involved and the numbers of ideas or innovations being managed at any one time.

Innovations and ideas can come from any part of an organization. It is not the preserve of the R&D department or Marketing. Nor is it merely limited to an employee or customer suggestion program.

A successful innovation culture embraces all aspects of a business and should be managed as effectively and efficiently as any other core business process. To that end, successful innovation companies operate an ‘Innovation Hub’ where all ideas and innovations are collated and coordinated.

Creative processes and analysis can be used to stimulate new ideas in four basic areas:

Ideas should be effectively screened and ‘bad’ ideas killed off quickly but sensitively. The number and type of ideas will be determined by the ‘performance gap’ and available resources. 

An effective screening or filtering process prevents ‘innovation overload’ whereby a company is almost paralyzed by the sheer volume of innovations and ideas generated from the multiplicity of sources previously mentioned. If new ideas and innovations are to make a difference, they must satisfy five basic criteria.

Value - The idea must deliver tangible benefits to the organization. This helps eliminate those ideas and innovations that are good in principle but add little or no value to the bottom line, now or in the future.

Suitable - It consistent with business strategy and the current marketplace environment. This helps eliminate those ideas that are potential distractions and move the business needlessly away from its core business focus.

Acceptable - It is crucial that proponents of an idea or innovation spend time and effort on selling the idea internally and gauging the level of support for it. This is often overlooked and failures are often attributed to ‘office politics’. Stakeholders are an internal barrier that must be negotiated as if they were a formal process.

Feasible - The innovation must be managed within existing budgets additional funding provided as required.  New skills must be acquired to implement this idea effectively. The above will affect the timeline for implementation and the potential return on investment calculation. It is often seen as a reality check.

Enduring - The idea must deliver value in both the long and short term. If a new idea or innovation is to be truly strategic will it survive the rigors of time? Is the long term gain worth the short term pain of bringing a new idea to market?  This also highlights the return on the investment to be made.

The Innovation Process

Innovation should be built into business routines at three distinct levels - at the Annual Business Planning (ABP) process, through structured themed Quarterly Innovation Workshops (QIWs), and ad hoc day to day activities. 

Some of the routines are ‘proactive’ by nature, a conscious focus on bringing ideas and concepts forward into the innovation process such as ABP meetings and QIWs. Some routines are passive or reactive, such as creating a culture of innovation where day to day activities and management seek to enable innovations to flourish.

Ideas and innovations should be driven by market, customer or competitor insights (MCIs) and progress reviewed on a monthly basis.  A robust project management process is often a prerequisite for effective implementation and communication.

Set up an ideas market culture by which heads of business units or departments have established budgets for innovations and get together to fund ideas, irrespective of where they originated; this is an internal market for ideas, innovations and people. Getting to this point may take a major culture change and is unlikely to be a quick fix.

Innovation And Performance

Creating an innovation process and installing an innovation culture must be managed and measured on an ongoing basis. Monthly and weekly meetings should focus on the progress and performance of both new ideas and the implementation projects.

Issues should have a process by which they are escalated and associated risks managed where appropriate. The performance of the innovation process and the issues raised should drive and inform the next planning process and review of strategy.

The frequency of performance measurement is often dependant upon how critical the innovations are to the overall business performance. Performance measurement is intimately linked to the innovation Platform used by the organization.

A clear business strategy that integrates innovation appropriately at its very heart combined with effective and efficient operations which allow innovation to flourish will stand a greater chance of succeeding.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2012 Oseme Group

By M. Isi Eromosele

Your company has the potential to be a world leader in innovation. The strength of your company and its wider knowledge base are strategic assets. Your untapped knowledge base could be the most productive in your industry, with a depth and breadth of expertise across over multiple areas of distinctive research strength.

To grow within your industry, your company has to be committed to invest in maintaining and strengthening its knowledge base, and to continue to fund a balance of blue skies and applied innovative projects.

To succeed in the global innovation economy, your company must strengthen its ability to leverage the commercialization of emerging technologies, and to capture the value chains linked to these. The private sector is always going to be central to innovation.

Innovation and research are now increasingly international endeavors. Most innovations originate from multiple countries, drawing in components or technologies developed in multiple locations with the high-growth economies playing an increasingly important part.

Global Collaboration

Open innovation means harnessing new knowledge wherever it comes from. Your business should already have strong partnerships with other companies in the United States and overseas, which will reinforce its strengths and bolster its weaknesses.  

The geography of innovation is changing. Fast growing economies like China and India offer new opportunities for both business, technology and new product development cooperation.

Global Innovation And Research

Other countries understand that innovation is fundamental to economic success. Despite marked differences between national innovation systems, some countries, like the U.S., Japan and Germany innovate more effectively than others.

Scale confers advantage, yet much smaller countries like Sweden also perform strongly.

Fast growing economies like China, Brazil or India are rapidly raising their game. China, for instance, is set to become the second largest recipient of foreign direct investment in the world and is already the second largest investor in R&D after the United States. In the major emerging economies, high-technology manufacturing trade now represents 30 percent of their total manufacturing trade, compared to 25 percent for the OECD (Eurozone) area.

New scientific hubs have been created over the last decade, for instance in Seoul, Shanghai and Sao Paulo. Some universities in Asia, such as the Hong Kong University of Science and Technology, are emerging as leading research institutions.

Many factors influence the effectiveness of any innovation system in many countries: governance regime; taxation and regulation of enterprise, and their access to finance; size of manufacturing base; organization of the university sector; levels and orientation of

government-funded research; and the role and weight of different public institutions.

The most successful national systems, however, share common characteristics. They exhibit an ability to generate long-term and risky investment at scale for new ideas, both public and private. These new ideas are the result of relationships among people producing, sharing, applying and developing various kinds of knowledge through cohesive networks.

These networks also allow them to engage with international collaborators and adopt innovations that emerge elsewhere in the world. Their governments, delivery bodies and agencies take a leadership role.

They develop technological capabilities through funding research and R&D. They actively support strong collaborations between companies and take investment decisions on research and technological priorities, institutional frameworks as well as education, regulation and infrastructure provision.

Challenge-Led Innovation

Innovation is increasingly driven by the challenges that all nations face in the 21st Century. Current patterns of natural resource use are unsustainable and put global prosperity and growth at risk. Demographic change is affecting all developed economies. By 2050, the proportion of the population aged over 65 will increase from one in six to one in four.

The world needs solutions to these emerging societal needs, and to develop more challenges can only be resolved through interdisciplinary collaboration, across technological and sector expertise, involving both fundamental and applied research.

These challenges will transform sectors such as automotive, healthcare, agri-food, construction and digital systems, requiring the development of new business models, technologies and manufacturing techniques.

Design For Innovation

Design can be transformative for your company, through leading or supporting product

and process innovation for managing the innovation process itself, for the

commercialization of discoveries and the delivery of products and services.

Research has consistently shown a link between the use of design and improved business performance across key measures including turnover, profit and market share. Most successful high-tech businesses are design and technology-driven.

Intellectual Property

Intellectual Property (IP) is a significant factor for growth for many companies; innovative companies that use intellectual property rights are associated with significantly better chances of firm survival and company growth.

Evidence shows that use of patents is associated with greater knowledge creation, better use of knowledge within firms and higher transfer rates of knowledge between firms.Trade mark use is similarly associated with higher firm productivity and innovation.,

However, in protecting their innovation, SMEs lag behind large firms. While 13 percent of large firms seek to protect their intellectual property through patents, only 6 percent of SMEs do so and therefore miss opportunities to seize the full value of their ideas. This is often because smaller firms do not always understand the value of their IP.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2012 Oseme Group