Culture of Innovation – Innovation Strategy

Innovation Culture and Strategy

Creating a culture of innovation has become an important objective in many companies. To create a culture of innovation companies must (1) acquire the ability to execute the innovation process and (2) overcome the organizational barriers to success.

To create a corporate culture for innovation, we suggest that companies take the following approach. Select one person from each product group, division, or company for a one-year assignment as an innovation champion. At the end of the year, these individuals must report back to management and submit for funding a fleshed-out product, service, or operational innovation initiative aimed at organic growth. The innovation champions must be trained to use the outcome-driven innovation methodology and use it to execute their initiatives.

To give the company a broad range of growth opportunities, these initiatives may be aimed at core or related market growth, new market creation, or disrupting an existing market. The innovation champions must support their recommendations with an outcome-driven market study that lays out the customer’s unmet needs, solutions that address them, a prototype that validates the design, and a business case that quantifies the idea or ideas’ financial viability.

If 25 people are selected for such a program, then management will have the opportunity each year to review 25 new product ideas that have been through the rigor of the outcome-driven innovation process. If the program is executed every 6 months, then 50 high-potential ideas will be presented to management each year.

This influx of ideas, which are known to address unmet customer needs, will fill a company’s product portfolio with a plethora of winning products, enabling companies to successfully generate organic growth through innovation and at the same time create a culture of innovation.

We have learned that it is not necessary to change everyone in the organization to create a culture of innovation. With a management team that supports the concept of outcome-driven innovation and innovation champions that master the method, a company can build an innovation culture and leverage a core competency in innovation.

This sounds simple, but it is not. Companies must first admit that the methods they are currently using to uncover hidden opportunities is incomplete, inaccurate, or misleading. They must recognize that when it comes to innovation, traditional market research is flawed. They must admit that outside factors, such as executive edict, personal goals and interests, and company politics, have great influence over what products enter the product development process. They must recognize that current practices are ineffective and that a new approach – along with the new data – is needed to decide where to invest.

Outcome-driven research provides the data needed to decide where to invest and to act with confidence. Adopting the outcome-driven methodology and using the data it generates is the key to success in creating a culture of innovation.