But what happens once the company opens its doors or the product hits the market? Whose responsibility is it to spot the next trend or opportunity? More important, who should be charged with shepherding the behavior of trend-spotting across the organization?

Everybody is responsible for trend spotting. This isn’t some cliquey club; limit your people’s involvement at your own peril. From the Marketing and New Product Development Departments, to sales representatives in the field, from the CEO to the receptionist or CSRs – trends happen and are spotted everywhere. Therefore, everyone needs sharp eyes and piqued ears for emerging trends.

But trend spotting doesn’t just happen. Part mandate, part innate behavior, people have to want to be on the look out for new opportunities. Just as many organizations seek to break down silos that traditionally have separated teams or departments, the same sense of unified, yet independent thinking must permeate any organization that hopes to spot and capture the Next Big Thing.

This cannot be an idle mandate – a sort of set-it-and-forget-it statement from on high. Trend spotting is learned by example, and encouraged or shepherded by senior managers who also focus on innovation. This can be the CEO of a smaller organization, or the Chief Innovation Officer at a larger one.

This kind of lead-by-example encouragement transforms employees across the enterprise into Idea Generators – trend spotters who become champions of their space and sources of new ideas that touch every part of the organization. One who submits an idea is more likely to take ownership of it – and help shepherd it in kind through the research and discovery process

(Whether a trend that is explored and later travels the path to New Product Development is another topic. To be sure, not all trends spotted and submitted to the Idea Hopper for further discovery will blossom – at least right away. Some will, and some must wait for market or company conditions to blossom in kind. And that’s fine.)

How can you improve and become more creative in organizational trend spotting?

- Create a Trend / Idea War Room. Like lighting company Sylvania “War Room” for trend spotting. Yours can be a permanent place where white and dry erase boards, competitive products, and ads clipped from magazines line the walls (see more below).

- Solicit outside involvement. Do you have field reps, distributors, retailers who are on the front lines of customer interaction? They can help target opportunities by specific geographies or market segments.

- Tap tradeshows. I’ve always encouraged aggressive trend spotting at tradeshows. As your people walk the floor, encourage them to envision and cross apply. At Kohler, we would attend design and household appliance shows, and come up with better and trend fitting kitchen product designs for faucets and sinks.

- Read (with a trend-spotting eye) trade and consumer magazines. See something cool? Tear it out and stick it to the wall. Let the Innovation Team mull them over. Ideas may crystallize.

- Buy new and competitive products. Tinker with them in a War Room. It’s amazing what will emerge.

- Buy your own service. Experience the process. Where does it shine? More importantly, where is it frustrating? What can be made easier and better?

- Ask your customers. For customer-facing organizations, customers often are your best trend spotters. When I was at Airspray we convened with multitude of disciplines. But most came from customers via sales, rife with bias and lacking filter.

- Set an agenda for trend management. Along with feeding the Idea Hopper, plan to manage ideas and attack the opportunities they present.

Trend spotting in the innovative workplace is by necessity a persistent activity. Opportunities emerge for competitive advantage. Competitive forces constantly emerge that require reaction. It’s a natural part of a corporate evolution, whether related to new product or services development, or the establishment of new internal processes meant to improve the organization itself.

Aristotle is thought to have said, “Excellence is not an act, but a habit.” Replace “Excellence” with “trend spotting.” And embrace the mandate.

By Robert Brands (with Jeff Zbar)

Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).

Six thousand times. Do you have that kind of innovative stamina?

It’s been said that Risk + Experimentation (+ Failure) = Improved Environment for Innovation. Put another way, Innovation = Creativity x Risk Taking.

Innovation is an experiment of sorts. It requires a culture of risk, opportunity and challenge. Moreover, for an organization to benefit from innovation, leaders and team members alike must welcome – and grow from – failure.

Rather than view failure as inherently bad, successful innovation requires that executives and teams commit to learning from each experiment gone bad — and incorporate those teachings into the next endeavor.

The successes and failures borne of innovation experimentation perpetuate innovation. When strategies are emerging, innovators test their hypotheses and gather information to continue forward with their ideas. Whether the innovation is a consumer product, a software application, or an internal process for an existing business enterprise or workflow strategy, the question remains: How will the idea resonate with the target audience or user? What costs are reasonable? Can the audience (consumers, manufacturers, employees) be convinced to shift well-established habits to embrace The New?

Because of a high failure rate, organizations pursuing the practice of Innovation must have a tolerance for failure. Not every idea will win. But each failure must be perceived as valuable in the trial-and-error process as a team seeks improvement. Tolerance for failure must be encouraged, as well as enthusiasm for risk-taking. Without risk, there can be no reward.

To create a culture of innovation, organizations should:

- Encourage well-reasoned risk-taking. The pursuit of innovation isn’t some fool-hardy flight of fancy. Encourage — or insist upon — a plan to be presented first, to ensure understanding and buy-in across the affected organization. Know your tolerance for risk and failure in the pursuit of innovation.

- Test. True innovation requires thorough testing in pursuit of success. Testing, measurement, and an accounting of what’s been learned — even in failure — brings measurable outcomes from successes and failures alike.

- Trust. Do you – as a CEO or team leader – trust your people to pursue new ideas on behalf of the company? Build a culture of trust in the individual’s pursuits — so long as safety-measures are in place to safe guard against failure damaging the organization.

Most of all, avoid letting a failed concept kill your team’s motivation. Every idea should be given positive acknowledgment, every failure should be studied for “what went wrong,” and every success should receive appropriate reward. By providing your team with a culture of Innovation, their risk-taking abilities will improve. And, as was the case with Mr. Edison, they eventually will see the light borne from their successful innovations.

• Innovation and ROI: true Innovation results in value creation for all stakeholders – in terms of financial return, increased market share and enhanced profitability; this is the ultimate goal of your sustainable Innovation program.
• The Right Rewards: rewards and recognition systems can take many forms, from a bonus percentage based upon new product sales to peer acknowledgment and awards.
• Recognition: Pride…a thorny problem solved…the personal satisfaction of a job well-done – these are some of the intrinsic motivators that make creative people tick.

Does that encourage value-added thought process? In my mind, it encourages work, which should need no encouragement at all.

Now, what if that same company put a reward system in place whose reward system was based on innovation and results, not hours or labor? It aligned reward to patents granted, products launched, or sales achieved? And its reward process was integrated along side its Vision, Mission, Strategy, and Resources / Budget?

I would argue that that organization has asked itself a key question: What motivates your team to excel in innovation? The answer is Net Rewards for Net Results.

Many companies see cash as the ideal motivational perk. This might not be the case. A recent survey from McKinsey found that three non-cash motivators rise above all other forms of incentive: Praise from managers; the attention of leadership that takes place in one-on-one conversations; and the chance to lead projects, teams or task forces.

Such nods and recognition topped even cash bonuses, increased base pay, and stock or stock options – the three top-ranked financial incentives, McKinsey found.

“The survey’s top three non-financial motivators play critical roles in making employees feel that their companies value them, take their well-being seriously, and strive to create opportunities for career growth,” the McKinsey report noted. “These themes recur constantly in most studies on ways to motivate and engage employees.”

Though being discussed last in the list of the 10 Imperatives to Innovation, “Net Rewards and Net Results” arguably holds equally high a position as any other imperative. There’s a fundamental connection between the two. Rewards must be in alignment with the expectations of the organization and its people. Some organizations seek to innovate, but try rewarding people based on R&D spend. It’s is a worthy financial metric, but is no guarantee for success.

Incentives should not be about output or spend. It’s about “thought-put,” and the creativity, ideation and esprit de corps brought to the effort.

Done right, rewards the organization in search of inspiration, motivation, ideation – all the imperatives that drive innovation. It rewards the individual for performing at a high level, and the team for working effectively as a Unit of One.

For the organization that seeks results, incentive is a kind of Reward ROI. By investing in employee rewards as a carrot, think of innovation as ROI derived from the alchemy of ideas-to-money. As we’ve written before, innovation leads to improved performance, heightened sales, more black on the bottom line. This profit – whether in actual product on the street or improved organizational performance – brings benefit to all stakeholders: shareholders, executive leadership, employees, customers and consumers.

Various perks can drive incentive. Incentives must be earmarked for all participants at the table. This may include the development team itself, to the marketing, finance, R&D, sales, customer service or people from other departments who helped with ideation, market research, justification or any other process that went into creating the new initiative.

For example, in the NPD process, the team or division should be rewarded with a compensation package that includes a percentage of sales derived from new products delivered. The neat thing about NP sales is that success is rewarded and people stay engaged and involved they care post development or launch.

Simply put, the fruits of your team’s labor benefit all – and rewards must reflect that. Moreover, this type of validation acknowledges individuals’ ability to envision new concepts, help shepherd them through the R&D process (even if the individual is not part of R&D, per se), and play a key role in bringing product to market.

Rewards can enhance valued employees’ commitment to the organization, boost morale, motivate future efforts, reinforce positive outcomes, encourage repeat performances and help keep employees’ “eye on the ball” vis a vis innovation and ideation. It also strengthens the connection between strategy and results.

In sum, when Net Rewards are based on Net Returns in the innovation process, everybody – the organization, the innovators, the stakeholders and the consumers – wins.

By Robert Brands with Jeff Zbar

Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).

• What’s Measured, Is Treasured: And that’s just human nature, so be sure to check and recheck performance – monthly.  No exceptions, no excuses. What gets measured gets done.
• What to Look For?: the key performance indicators and metrics include:
  • R&D spending as a percentage of sales
  • Total patents filed/pending/awarded/rejected
  • Total R&D head count
  • Current-year percentage of sales attributable to new products released in the past year/three years/five years
  • Number of new products released

For a recent survey on Innovation Measurements see:  http://www.innovationcoach.com/resources/survey/ “What do you measure?”

For more Tips see “Robert’s Rules of Innovation” by Wiley, March , 2010

But how costly is ineffective innovation? That is, if a company sets out on a new product or service development initiative – and that effort fails along the way for whatever reason – what has been lost? Investments in time, effort, capital – even reputation?

What if the company set in place a practice of observing and measuring innovation at select or pre-set milestones along the way? Roadblocks, sticking points or issue that otherwise might have doomed a project to failure would have been identified, reported and measured – even corrected – along the way.

Success might not have been assured. But there would have been a higher likelihood of averting failure, or at least identifying troublesome issues early on.

Innovation is meaningless without attaching measurable goals to an initiative. Yet, many organizations fail to give meaning and measurability to their programs. They don’t measure the percentage of income that comes from products younger than five years old, or new product sales, or metrics that serve as innovation dashboard to track innovation activities, or R&D spending or headcount.

The importance of having measurable goals in the innovation process cannot be overlooked – or overstated. Yet, it often is both overlooked and understated. Many organizations go through all the right motions – they plan a new product, service or internal initiative launch. They gather the team, provide the specs, and let them loose with an imperative.

But no metrics have been set out to track their success. And without the ability to measure, how can you know whether the initiative is successful?

That’s where observation and measurement come in. Observation means tracking or watching how the team advances on the path of innovation. Measurability requires that accomplishments are weighed against milestones. Done well, the end result is an initiative that adheres to the intended vision, mission or strategy.

Simply put, without goals – which then are observed and measured (and supported by associated rewards), things won’t happen. Observation, measurement and tracking of NPD results are essential to helping ensure optimal ROI.

How is this done? First, create your baselines, with initial observations and measurements. Then capture the time to each gate, the time spent inside each gate, etc. Look for improvements in terms of reduction of time spent within each gate.

Once a product is launched, a key metric is the ratio of new product sales to overall sales. One method would be to track historical new product sales for the first three years after launch versus total sales. This is your baseline. Next, set a target goal for this ratio, based on your needs and taking into consideration your competitive environment and the competition’s baseline. This would be further calibrated to account for the product lifestyle in a particular industry, but in any case, new product sales is measured as a percentage of the total.

Observation and measurement also can be fascinating to watch as headway is made. You see your margins grow, as the right mix of new products come on-stream.

This is part of an overall process of continuous improvement. Plan. Do. Check. Act. Repeat – or revise. Things won’t always go as planned, so take corrective actions and make ongoing course corrections.

Product lifecycles keep getting shorter and shorter, which mandates accelerated NPD cycles.  In the personal care arena, for example, lifecycles are only two to three years.  So each big idea has tremendous potential value and it’s important not to kill a potential success too early.

Some believe investment into R&D can help ensure success. Actually, R&D spend is no guarantee for Innovation success. In its simplest terms, what gets measured gets done.

By Robert Brands with Jeff Zbar

Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).

• A Means to an End: Think of Innovation as a process that uses intellectual capital to generate positive business results and, in the process, new findings – which spurs more Innovation, and leads to further financial returns, etc. etc.
• The Customer is King: The value proposition is the key to successful Innovation.  Develop an Innovation with high perceived value to your customer, and strong sales will follow.
• IP Protection: Part of the three-legged stool (technology – business acumen – law) I referenced earlier, IP and patent protection locks in your competitive advantage that supports the sales results and market share increases that result in overall stakeholder value.

Some would argue that companies innovate to achieve a heightened competitive advantage, streamline the organization, or create intellectual property – including patents, trademarks and other protected property – that create value in the portfolio.

Many reason and rationales can be argued for the pursuit of innovation. Yet no purpose for or result from innovation can be more compelling than Value Creation. This metric is the ultimate measure of return on investment when measuring innovation’s role in creating value.

Simply put: Innovation done well drives value creation – for the organization, its customers, its internal stakeholders and its external shareholders.

Successful innovation turns ideas into money. All the processes, creativity, time, sweat, research, dreaming, refining, modeling and retesting transform effort into tangible, valuable results.

This includes innovation that touches all sectors in the company or organization – not just in the creation of a new product or service. Enhancing the business model or networking, enabling a new core process, creating a new channel, brand or customer experience delivery model, or offering a new product system, boosting product performance, or providing a new service each creates value.

Nowhere is this more relevant and apparent than in the acquisition process. If one were to look at acquisitions with and without a patent portfolio, I would argue that a well-created and -managed patent or IP portfolio can double company value. My former company, Airspray, created of the novel packaging and dispensing process that turned liquid soap into foam. It was a company with a typical value of 7-8x EBIT. Yet, the addition of this patent to its portfolio resulted in 15x EBIT paid when the company was acquired in 2006.

This is especially important in today’s market. Current economics continue to hold down already devalued corporate stock prices. Companies are challenged to find ways to boost their value to stakeholders – as well as to keep customers and prospects engaged and purchasing goods. Value creation borne from innovation can be critical indeed. As evident in the Airspray example, one item in our patent portfolio almost doubled the EBIT paid at acquisition. This example is not unique, but was the result of painstaking and thoughtful focus on value created by innovation.

Moreover, value creation and innovation done well can immeasurable enhance the corporate brand. Between adding new products, reviving the corporate dress, even launching new marketing creative or advertising campaigns, customer value can be created through the value-added components and enhanced public face of these endeavors.

Of course, it’s essential to find that delicate balance between cost, price, and return. Balance is found, in part, by seeking stakeholder input and customer feedback during development of any innovation process.

The arguments for innovation are, frankly, inarguable. Value, brand enhancement, share price and perception among various stakeholders can be elevated by innovation done well. Add to the equation the inclusion of intellectual property derived during the process, and the overall ROI can be well worth the investment.

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By Robert Brands with Jeff Zbar

Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).

If someone asked members of your Innovation Team about “ownership” of a current initiative, would individuals reply, “Yes”?

Or would the people involved point to the team leader, the CEO or someone else – someone other than themselves? Would they reply, “No, that’s his”?

I spoke recently with a CEO of a consumer products company who expressed disappointment that an idea for an exciting new wrinkle in sunglasses technology had faltered. In doing so, others had beaten the company to market.

Why did this happen? The “Leader” admitted he’d failed to sell the idea. “Others just didn’t get it,” he said. “Their hearts weren’t in it. They were moving forward out of duty, not out of passion. And we dropped the ball.”

In the world of Innovation, it’s the Chief Innovation Officer’s job to marshal forces, to empower, to inspire, and to transform team members into stakeholders of the process or project. In short, it’s to create and encourage a spirit of Ownership.

As one of the 10 key Innovation Imperatives “Ownership” ranks up there in importance (http://www.robertsrulesofinnovation.com/category/blogs ) with Ideation, Risk, Results, Idea Management and all the others.

Put as a business equation, Ownership Equals Accountability Equals the Foundation of Innovation. Without accountability, ideas stall. Progress dies on the vine of best intentions. Any real chance at success is lost.

Without ownership, positive results are almost impossible to achieve. A team member cannot point to the Chief Innovation Officer or team leader as a project’s or initiative’s owner. Every participant along the innovation process’s chain must embrace accountability as a champion of the idea, the development process, the success – and the failure – that may come in tow.

To be sure, Champions at the highest level – like a CIO – have the authority and (and should have the passion) to garner organizational respect needed to push Innovation from the idea stage to development and ultimately to fruition. Champions build consensus, convince others to take calculated risks and to work outside their comfort zone,

But Ownership must extend beyond one single Champion. To be sure, a champion at the highest level ultimately drives projects forward. But “ownership” must be claimed by all involved, encouraged by the senior project manager, but wholeheartedly embraced across the organization.

How will you know a project has been welcomed into the hearts of its team? Ask one question:

“Excuse me, is this yours?”

The response will give you your answer.

By Robert Brands with Jeff Zbar

Robert Brands is the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman and which will be published in March by Wiley (www.robertsrulesofinnovation.com).

• Who’s Driving This Thing?: Your program for sustainable Innovation must have a champion, a true driver of the process.
• Where’s the Passion?: Select associates who care and are truly passionate about the product and the effort.  Kick disbelievers off the bus – this is too important for naysayers to derail.
• Different Strokes for Different Folks: Assign a specific task to a dedicated “owner” – this is critical to unleashing the best performance out of each member of the project team.