I recall having a conversation in a past life with my direct manager regarding the topic of innovation. At the time the business was struggling to release new products in a timely fashion. In fact releasing a new product at all required herculean efforts! The business was aware that innovation is a by-product of creative thinking. The firm also knew cutting edge firms measure success by how much revenue is generated from new products or services, the final piece of the innovative process! Generating at least 50% of each sales dollar with new products was our goal. We were at 15%. Our product life cycle (PLC) displayed a product portfolio cluster in the areas of maturity and decline. At that time we measured “new” as anything released in the last three years. True, other companies may have a shorter horizon but in our industry three years was a solid baseline.
So what is innovation? There are various definitions and I will share what was applicable to my business at that time. Innovation is the need to drive a better solution that may meet new needs using the voice of the customer as an important input. Innovation should not be limited to the product only, process innovation is equally important. I believe innovation must be practiced to be perfected. It is a discipline the business must support throughout the organization, at all levels. This multi-disciplinary approach provides active engagement from the factory floor to the front office. In my history some of the best new ideas have come from individuals outside the engineering and design functions. Barriers to success contain two prominent inputs, the company’s culture and leadership. If these two variables do not embrace and support innovation the success rate as measured in time to market and revenue dollars from new products will be poor. Here is where my business struggled. The design teams were centrally located in the East; the operations were disbursed throughout the United States. The firm’s organizational structure and culture were not open to accepting new ideas and creative solutions from across the organization. The centric focus of “we know what is best” was disruptive in a negative way. If the mentality of the company is “centric” in nature, ideas and subsequent innovations from other parts of the organization will be easily discredited. This was our dilemma at that time. The end result was market share and revenue loss to a nimble competitor.
So how can you drive innovation? Innovation requires creativity as an input. To be successful, creativity must be supported and nurtured in an organization by having the right management in place, an environment conducive to idea generation and a process to capture and decipher the data and transform a great idea into a product that will impact the marketplace. In addition, look to the customer as a source of knowledge. What better driver to the next innovation than your current customer base? Allow creative thinking to be supported throughout the firm. Make this part of your culture. This goes far beyond incremental continuous improvement. It is break-through! Support and reward innovation (monetary and recognition). Metrics such as patents issued or R&D dollars spent does not provide the complete picture. Driving the need throughout the organization to include a formal process to capture and evaluate idea generation does. It provides the firm with a portfolio of ideas and quite possibly the building blocks to enable the next greatest innovation in the company’s history.
Related Benedictine Programs
If you’re interested in learning more about innovation, Benedictine’s MBA in Entrepreneurship and Managing Innovation focuses on instrumental success factors to assess and explore new business opportunities including managing creativity, building a business plan, and financing your venture. Benedictine University also offers online Undergraduate degree programs. To learn how an online degree from Benedictine can help you in a new business venture talk to a Program Manager today.
About the Author
Pete Papantos is an operations director at a Fortune 500 company. He is responsible for the global execution of their strategic plan and driving operational excellence using lean methods. In addition, Pete is a graduate instructor with emphasis in operations and strategic management — both in traditional and online settings.