In 1980, the Coca-Cola Company was struggling, and its market share was underperforming compared to its competitors. So at a worldwide management conference in 1981, CEO Roberto Críspulo Goizueta decided to refocus the entire organization on putting value creation first.

The company refined its marketing investment, expanded into new markets, and acquired new bottling companies and the intellectual property and patents they held. The company created new products, including Diet Coke. It embraced a global vision; to wit, some market researchers say the company became the world’s best-known brand.

This transformation of company and IP doubled the company’s market share in 15 years, and Goizueta reportedly created more shareholder wealth than any other CEO in U.S. history.

Much has been written about innovation – the imperatives that drive the process and the results borne from the exercise. The purpose of innovation ostensibly is value creation that translates to enhanced stakeholder value. Process-driven organizational innovation drives value creation that transforms ideas into vital intellectual property, IP into revenues, and revenues into increased stakeholder value.

In any for- and not-for-profit organization, “value creation” can be translated in many ways. It is

• Improved, silo-busting, team-building collaboration
• Amassed IP and new product development, which gives the company or organization a competitive edge on the market or competition
• Strengthened fiscal performance, which lures additional investment

This is why organizations invest the time, energy, creativity, research, planning, refining, modeling and retesting that it hopes will pay off in terms of improved process, better teamwork, a new business model, a refined brand – and black-ink results. These are assets that add value to the company, which is why it is absolutely crucial to protect these ideas.

Yet Intellectual Property will drive the future. As we move past the Industrial Age and the Age of Technology, the future era will focus on process that drives IP – and the real value it delivers. As much as teams and share, it is imperative to build and protect IP through the use of patents. Patents protect and define the innovation so they are the key step to commercialization and enhancing value.

It is essential for every company to keep a patented Intellectual Property portfolio. The IP portfolio of Airspray doubled in value because of the patented technology that turned liquid hand soap into foam. Airspray realized – and its fiscal results proved – that the regular and persistent renewing, refreshing and updating of patents was well worth the cost.

To this day, IP remains arguably the most powerful driver in innovation’s Value Creation.

The Stage-Gate innovation process has two key elements.

1. Stage. The “stage” refers to the critical activities that need to take place during a certain stage of product development. It is important that the New Product Development process be cross-business to give balanced ownership. So “stage” content should be divided amongst all business functions.
2. Gate. The process of “gating” involves ownership, decision makers, degree of flexibility, criteria and prioritization. This includes a selection of ideas and concepts from the hopper.

During the New Product Development process, build a system of metrics to monitor progress. Include input metrics, such as average time in each stage, as well as output metrics that measure the value of launched products, percentage of new product sales and other figures that provide valuable feedback. Important for an organization to have agreement of these criteria and metrics.

Even if an idea doesn’t turn into product, keep it in the hopper because it can prove to be a valuable asset for future products and a basis for learning and growth.

Remember that it is possible to nurture both creativity and structure! Here are some tips for how:

• Open Wide: Keep the idea funnels wide open, find and fill the product “white spaces” – untapped marketplace opportunities.

• Sharpen Those Teeth: Make sure your Go/No-Go decision checkpoints have “teeth.”

• Widen the Innovation Highway: Make the system lean, adaptive, flexible and scalable, in order that you can simultaneously process different types and risk levels of projects and increase sped to market.

Robert Brands is a professional Speaker, the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman published in March, 2010 by Wiley.

Some of the most successful product development managers are often successful salespeople in the company, because their talent is building consensus around a brand new, untested idea and convincing others to wholeheartedly work towards that cause with an uncertain outcome. It is the champion’s job to empower and inspire the team towards Innovation.

That’s why it is essential to have a leader for every product development team – a powerful, respected champion for the cause, a passionate leading advocate and ultimate decision-maker.

Next, it is important to establish and maintain regular New Product Development meetings. Here are some key points for these meetings:

• Face to face (in person) is best.
• Keep a regular date, time and duration.
• Clearly state the meeting objectives in a written, predistributed agenda.
• Include cross-functional teams in the meeting: marketing, sourcing purchasing, sales, operations, quality assurance, etc.
• Review New Product Development by priority level (high/medium/low).
• Set next steps and a clear-cut action plan. Follow through and instill accountability.

Everyone on the team should feel like they are part of the process to get a sense of Ownership. To test Ownership, here are some questions you should ask:

• 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.
• Is incentive compensation aligned? : Make sure the incentive and recognition programs are supporting and rewarding the results and those involved.

Ultimately, Ownership must extend beyond a single person to be embraced by the whole organization. The true test of Ownership is simple. Ask them, “Excuse me, is this yours?”

Robert Brands is a professional Speaker, the founder of InnovationCoach.com, and the author of “Robert’s Rules of Innovation”: A 10-Step Program for Corporate Survival, with Martin Kleinman published in March, 2010 by Wiley.

Every company culture needs accountability. Actually, for any company to succeed accountability is an imperative. Members of a corporate team need to feel responsible for their work – to meet deadlines and to deliver what was agreed upon. Holding others accountable begins with clear communication of what is expected of them and even getting the agreement in writing if necessary.

So to expect creativity in developing new products at your company, hold your team accountable. Schedule New Product Development meetings.  Set clear action items and expect follow-through to keep the program moving along. Team members need to feel responsible for delivery.

Now there’s the left brain/ right brain argument that creative people cannot be organized – that creation loves chaos and therefore creatives are not able to deliver on a set schedule. But for a group of creatives who feel responsible for the outcome of their project and accountability for what happens within the company, Robert Brands assures you that in his years of experience leading project development teams that he has seen plenty of people who are creative and competent in delivering work on schedule. If you struggle with accountability, monitor and have your team report on smaller, interim steps in between monthly meetings. These tips should be helpful in encouraging accountability in your organization…

-  Give Them Enough Rope To…: The natural tendency is to dictate terms – deadlines, methodologies, etc.  Let the team members decide upon the “how it’s going to get done” elements.  Should they go a bit off the track, you can always fine-tune.  Or, better yet, lead a discussion on how they can fine-tune.

-  It’s Expected: State clearly, from the outset, that the team members will be expected to develop the answers to work-related issues – it will be their responsibility.

For more tips, visit Robert’s Rules of Innovation’s Accountability page and click on “Tips“.

Ultimately, it’s about people knowing their roles and that there are limitless possibilities and positive rewards for jobs performed in an organization that insists on Accountability.

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).