May, 2007

What is your Ability to Innovate?
By Tim Trotter

Why is innovation important? It enhances your ability to create value. It initiates and strengthens relationships. People want to be aligned with innovators.

Innovation also enhances your brand perception or company image. The late Peter Drucker said, “Business has two basic functions: marketing and innovation. Marketing and innovation produce results, and the rest are costs.” Innovation was the driving force behind the legendary actions of Henry Ford and Walt Disney. They realized their visions through their ability to innovate.

Your capability to create, transform and transfer innovation is what most customers, vendors and business alliances want.

Innovation in the business and organization world has two meanings:

• Change that has meaningful business consequences; new business, service or product concepts that add directly to the bottom line.
• New ideas that fundamentally change the basis of competition within an industry.

The 5 Levels
The innovation capability of an organization can be mapped to one of five levels of maturity. Mapping helps businesses understand where they are today, and how they need to change to accomplish the best results for the future.

1) Ad-hoc. Every company has this ability to innovate – it is just a matter of being at the right place at the right time. This level is the baseline starting point for the organization.

2) Repeatable. Companies that have attained this level are able to innovate more than once. The company innovates by throwing enough resources at opportunities. Many efforts fail, but through sheer volume of efforts the company is able succeed more than once.

3) Defined. At this level, companies have a defined process for innovation. Varieties of methods are deployed and used. An environment for innovation promotes experimenting and lessons learned. The emphasis is still on innovating specific solutions.

4) Managed. Methods that actively control and maximize the outcomes of the innovation process are widely deployed and used. The organization is forward looking and actively strives to create the future rather than react to change. The emphasis is on innovating in order to own specific spaces in the market.

5) Dispersed. Innovation has ceased to be the responsibility of a central marketing, development or IT group. Everyone within the organization contributes to identifying and realizing innovative new solutions. Organizations at this maturity level manage innovation value chains that extend innovation capability well beyond the organization itself.

Experience shows that 70 percent of companies and organizations are currently operating between 1 and 2 (Ad-hoc and Repeatable). At the same time, most will not realize goals if they don’t reach levels 4 or 5 (Managed and Dispersed).

What innovation level is your organization or company experiencing?

As you look forward at the benefits to moving forward in innovative maturity, we see many advantages:

• Expansion in innovation maturity reflects leadership.
• More employee involvement into your future direction.
• Ability to move quickly on opportunities.
• Establishment of better quality partners and alliances.
• Ability to continue to add value to clients. The innovation life cycle average is three years. Strive to out-do yourself.
• Provide another way to be valued beyond selling. Most level 4 and 5 innovators transfer innovation to business partners.

Reading this information begs the questions, “Does this make sense, and how would it fit within my business?” No short answer exists, but future innovations are within the minds of your clients, vendors and your employees. Innovation is only limited by the ability of one to innovate.

How this information fits with your current agenda is very simple. The innovation process begins with development of an ongoing innovation plan. This is not a marketing ploy, but a process to “raise the bar.” The results are endless!

Comment on this article