Intelectium, based on its experience working with highly innovative technology-based companies as well as its continuous research and implementation of successful concepts, methodologies and work processes, has created a model that conceptualizes, establishes the right phases and integrates all the tasks, concepts and ways of doing the things necessary for a company to be able to innovate effectively.
In recent years, the word “innovation” has been treated very lightly by lax consultants, pseudo-professors from business schools and other sellers of illusions... This has added significant complexity to the task of successfully introducing the practice of “innovation” in companies, since the lax treatment of knowledge tends to create a lot of confusion. In our frequent conversations with entrepreneurs and company directors, this confusion is evident in the doubts and concerns that they usually present to us:
“... Open innovation, customer centric innovation, disruptive innovation... we are not sure in which direction we should go or what processes we should implement...” “... The processes we have in place (suggestion box) have become obsolete...” “... There are many software packages that claim the merit of being the best, but the differences between them are very subtle and it's not easy to tell which one is good and which is not...” “... We know of many companies that have implemented innovation systems and then failed to get employees to use them...” “... The processes of best-known innovations are very oriented to the creation and launch of new products, but they do not include the prior management of ideas, the design and launch of services or innovation in business models...”
Innostart summarizes the challenges faced by companies that want to innovate continuously and that focuses on three key issues:
1. How to increase the number of innovations.
2. How to increase the success rate of innovations
3. How to increase the impact of innovations
The first and second challenges have a common origin in that the processes we use to generate innovations are seriously affected by the lack of predictability, since a good theory, formulated in the context of a specific circumstance, has not yet been formulated to guide the process. The main problem in these cases is that executives, who are heavy consumers of theories, generally apply the wrong theory or eventually a theory that is correct in another circumstance. The third challenge is based on the findings of one of the most interesting investigations ever carried out on innovation: the theory of disruptive innovations. For all these reasons, Innostart by Intelectium presents a holistic and highly rigorous approach to continuous innovation in companies, and allows us to undertake in an orderly manner the implementation of a culture, organization and processes necessary for long-term success.
Challenge 1
How to increase the number of innovations
A study developed by Greg Stevens and James Burley, from the University of Michigan, concludes that 3,000 ideas are necessary to achieve substantial commercial success (with industries where this ratio is substantially higher than the pharmaceutical one where between 6,000 and 8,000 ideas are required). Therefore, producing an enormous amount of ideas on a continuous basis is a fundamental requirement for any company that wants to increase the number of innovations. Subsequently, to increase the number of innovations, it is necessary to implement a series of processes and methodologies to capture, channel and/or evaluate ideas, discard or analyze in more depth, redefine, refine, decide to have seed-capital, build prototypes, test hypotheses and eventually decide to launch new products or services. InnoStart contemplates the existence of a series of initial requirements based on four principles, whose main objective is pave the way for generating a large number of ideas:
1. Run the Core Business: Before starting to work on such an ambitious initiative as transforming a company into a highly innovative organization, it is essential that the company has stable organic growth around its main products or services.
2. Lead and Organize: This is a far-reaching project in which the entire organization must be involved. Since the payout can be very large, it requires leadership from the highest levels of the organization: the changes that need to be generated require decisions and commitment.
3. Improving Diversity: Diversity is essential for creativity. Innovation can't only have its origin in a company's employees. To generate true diversity, a company must be able to connect not only its own employees but also to partners, suppliers, customers and other “stake-holders”.
4. Learning Environment: Creating a culture where people feel that they can express new ideas without fear that the companies' immune system will attack them before their merits have been properly analyzed is one of the key cultural aspects to change in any company that wants to enhance its capacity for innovation.
Once the way has been paved towards the generation of large numbers of ideas, the next step is the development of the “Innovation Engine”. The “Innovation Engine” contemplates the processes and applications necessary for maximize the ideas generated and channel them properly in a process of analyzing, categorizing, evaluating and prioritizing them.
The most successful innovations are generally re-combinations of existing ideas and domains. To generate these types of ideas, it is necessary to encourage people to connect, share information and work in teams based on their common interests. To do this, it is necessary to introduce the necessary processes and applications to “materialize” this connectivity between employees, partners, suppliers, customers and other “stake-holders” of the company. In this sense, not all processes are valid and not just any system is suitable.
Challenge 2
How to increase the success rate of innovations
The way to make innovations successful is to ensure that we innovate on things that are relevant to the market (not just to existing customers). It is important to achieve Abstrating ourselves from our beliefs to focus on innovating on what is truly relevant to people and not what we “think” is relevant. For this purpose, there is a simple technique that is based on two pillars:
The concept of “work to be done”.
The systematic investigation of the “work to be done”.
We say that people, in general, have “jobs to do” for which they “rent” products or services that help them to do those jobs more easily. Innovating on jobs that people don't need to do is the first of the biggest mistakes in innovation, and this is the main reason why countless technological innovations fail: there is not enough market share for new products.
On the contrary, products such as Federal Express or eBay have enjoyed great and lasting successes because they were created to “facilitate” “jobs to be done” that actually existed and that many people needed to do, such as sending something between two points as quickly and safely as possible and auctioning a product, respectively.
Then you need to be able to find At what part of the process What is involved in carrying out such work Is it necessary and possible to innovate to achieve great success. For this purpose, there is a technique known as “Outcome Driven Innovation” that allows “Segmenting” the “work to be done” and individualizing the “result” of the part of the process where two simultaneous conditions exist:
Where it is most important to get a good result.
Where people are most dissatisfied.
By following these simple recommendations, companies can significantly increase the ratio between the number of innovations they produce and those that become major successes.
Challenge 3
How to increase the impact of innovations
Improving the impact of innovations is possibly the most complex area of study about innovation, and yet this is where one of the greatest contributions to management in the last 20 years has probably been made.This is the area chosen by Clayton Christensen, one of the most influential figures in economic theory in recent times, to focus his research work. The results of his research are essentially summarized in two formidable books: “The Innovator's Dilemma” and “The Innovator's Solution”.
The principle behind the ability to generate innovations that are capable of producing great growth was described by Christensen as “disruptive innovation”. Disruptive innovations are those that rely on existing technologies to develop innovations that initially perform below similar or comparable products but have a strong accessibility advantage, either because of their low price or because special skills or knowledge are not required to use them. Because their performance is below similar or comparable products, initial customers are not existing customers but new customers. For this reason, and because of this it does not pose a threat, existing competitors tend to underestimate these innovations, leaving it up to the companies that launch them to establish a base in the market. And when this happens, the companies that have launched this innovation begin to develop what is known as sustainability innovation to perfect the product and improve its performance, in such a way that they begin to attract customers among the lower segments of established competitors.Developing and launching disruptive innovations, however, is a complex task: which manager in their right mind would approve an investment in the development of a product that performs below what their customers expect? or what financial director would approve an investment in a product that has no known customer base and therefore its return cannot be accurately assessed? In order to develop disruptive innovations, it is necessary, first of all, to make large companies and in particular their leaders aware of the theories behind disruptive innovations. And then, implement new processes and new values that make “corporate venturing” possible.
In this sense, in addition to mastering the theory of disruptive innovation, it is essential to implement two key organizational structures: the”Innovation Board”, which analyzes and defines the appropriate implementation framework for each type of innovative initiative, and “Seed Funds” which replicate — within the organization — the operation of seed capital investment funds, which seek to invest in innovative projects with high growth potential.
Conclusion
Innostart contains all the necessary elements to help a company transform into a highly innovative company, but each theory contained in the model must be used correctly, that is, in the context of a specific circumstance. It is impossible to give a detailed description of all the requirements and implications of this Innovation Management Model in the space of a short article. For this reason, we have tried to summarize the most important elements and we encourage those who want to delve into this area to contact us at the following email address for specific and detailed discussions on the aspects that interest them most: comunicación@intelectium.com
