The task may seem daunting at first, but it’s possible to develop a disciplined strategy that delivers Innovation time and time again for sustained long-term profitability. Make developing that strategy your 2012 New Year’s Resolution. “Robert’s Rules of Innovation” outlines specific steps to implement Innovation. Here are some tips:

1. Define your organization’s needs. What type of innovation are you trying to achieve? An incremental innovation that introduces a new process or feature? Or a transformative breakthrough that completely changes the marketplace? The latter is more difficult to achieve but holds the greatest potential. Choosing the path that makes the most sense for your organization will help in the Innovation process.

2. Formulate a New Product Development process. Each organization’s NPD process can have a different number of steps, so long as they form a structured plan. A three stage plan may include: Stage 1 Product Definition where a product is examined for its brand strategy, profit potential, and competitive analysis. If the product is a “go” then it moves to Stage 2: the Qualification process where a first article product is made and tested for quality assurance. Finally, Stage 3 is Revenue where the product is launched.

3. Create a road map to success. The key elements are examining Quality of projects, Capability of managing them successfully, and Capacity of the organization for maintaining a portfolio of well-managed projects. No matter what NPD process you decide to use, stick to the road map to ensure that each stage, and tasks within each stage, are clearly defined.

4. Some more guidelines for progress: remember to stick to your go/no-go criteria for moving forward with developments. All projects should undergo the same scrutiny, regardless of who suggested it! Also, many organizations are incorporating a “discovery phase” into the Innovation process to allow for more experimentation. This step is beneficial for making decisions based on long-term sustainable Innovation, and not on current budget restraints alone.

In a world of increasing business competition, Innovation is key to a company’s survival. Creating an Innovation strategy that makes sense for your organization is entirely feasible, and an absolute must for creating profit for your company.

Here’s to a New Year of Innovation!

What are effective methods of inspiring innovation? For starters, keep the idea highway open to all. Good ideas can come from anywhere within your company and from any level. Communicate your innovation goals to the organization and encourage everyone’s feedback. Setting regular monthly in-person NPD meetings will ensure that the innovation process doesn’t fall off course. Hold your team members accountable for attending on time and actively participating at each meeting. Monitor progress, make new decisions and set target goals for the next meeting to steer the innovation process along.

The best way to stimulate innovation is to take team members out of their regular comfort zones. Knock down silos in the organization so that groups who don’t typically interact can form cross-functional teams. Take innovation champions from marketing, operations, finance, sales, customer service – or any other department of your company – and communicate to them simply and clearly your innovation goals and how your vision will shape the future of the company. By working with other departments, team members can see how their position fits into the organization as a whole and how they can contribute their specialized knowledge.

Innovation is the lifeblood of any organization and in order to achieve it, CEOs and Management team should lead by example. Encourage, inspire and initiate your team to be creative and to make breakthroughs. Let them dare to take risks, and accept failure along the way as a minor setback for the price of Innovation. By openly communicating and providing ample support, your team members will trust in you as a leader who wants to inspire a culture of Innovation.

No matter if it’s a test score, sports game result or a sales figure, what we measure is what goes down in history. After all, “what’s measured is treasured.” It’s human nature to look back at past results as a basis for comparison and for improvement in the future. For this reason, it is absolutely essential to carefully observe and measure performance in the New Product Development process. In each of the different stages of the process, keep track of how much time is being spent so you know if you are ahead or behind schedule compared to past NPD cycles.

What gets measured is what gets done. Therefore, it’s necessary to set leading and lagging indicators for how the NPD process is going. Leading indicators such as the number of new ideas in the database, number of projects in the hopper, patents applied to, and amount of time and resources spent are all important information that give you insight on the NPD progress. Lagging indicators could include number of new products introduced, patents granted, new product sales in the first three years after launch, and how close your team is getting to the goal of introducing “at least one new product per year.”

By the way the traditional measurement of % of R&D spend is no guarantee for success!

Things will not always go as planned so now is the opportunity to make corrective actions. By measuring performance, you will be able to address your team on what’s working and what’s not for continuous improvement.

Success in product development is seen as one of the top indicators of the future performance of a company. To sustain Innovation, companies need to continuously improve their new product development capabilities. Quantitative and qualitative measurements of new product development will lend insights into a company’s strengths and weaknesses.

Measuring performance doesn’t stop after your product is launched. Now it’s time to measure the fruits of your labor. Some very important and telling information can be collected during the first three years after the launch of a product. In a survey of 200 companies that design and develop new products, they shared these key performance indicators.

1. Measure Research & Development spending as a percentage of your total sales.

2. Look at your total number of patents filed, pending, awarded and rejected.

3. Track your total R&D head count, hours or days spend.

4. Measure the current year percentage of sales due to new products released in the past year, past three years, and past five years.

5. Count the number of new products released.

These metrics should be examined after every New Product Development cycle so you are clear on your spendings and ROI for each product. Look at your ratio of new product sales compared to total sales. Now you have a basis for comparison and can set a target goal for the next new product. This management by objectives style uses ongoing monitoring and is an effective method for keeping the NPD team focused on achieving goals. By looking at opportunities in the New Product Development process to increase ROI, companies are able to improve performance and ultimately, increase shareholder value.

Accountability is an obligation or willingness to accept responsibility for one’s actions. After all, as the leader of a New Product Development team in any organization, how do you expect your team members to deliver satisfactory results within the desired timeframe? Make it clear from the beginning exactly what is expected of each team member and that they are held accountable for their work. Let your team know that, as members of the organization and members of the NPD team, it is their responsibility to contribute, to pull their own weight and to hold firm to deadlines. Otherwise, deadlines can slip with no real improvements made, and the end result may lead to finger pointing for who’s responsible. Don’t let that happen to your NPD process.

Is it clear to specific individuals and groups what their responsibilities are? Do you define action items at the end of each product development review meeting? These are key steps to implement for a good foundation to achieving Innovation.

If you struggle with Accountability, try interim reporting of steps so that when the due date comes the task is completed. Say you want a new design of a product in 30 days at the next NPD meeting, ask for an interim report on sketches a week later, a drawing the week following and a status of prototype build the week before the due date. No surprises…

When you successfully establish Accountability, it leads to great benefits for you such as being able to trust in your team, freeing up time for you to concentrate on strategy, and getting to lead a team that is confident, motivated and ready to take on the next “big thing”.

For more tips and insight visit: http://www.robertsrulesofinnovation.com/tips/accountability/accountability-tips.html

The success rate when it comes to innovation is very slim. In fact, just 1 in 100 new product entries succeed in the grocery business, according to a study by allbusiness.com. For every innovative product that comes out of the NPD process, there are plenty of ideas that don’t work out – deemed as failures. What’s important is that companies have a tolerance for failure and encourage risk taking.  Fear of failure can kill Innovation. Never punish for failed ideas. Instead, learn from them how to improve in the future. Establish a level of trust so your team won’t be afraid to think outside the box. To build a successful culture of Innovation, encourage everyone on your New Product Development team to take risks!

“Robert’s Rules of Innovation” gives five simple steps for encouraging initiative and Innovation. Here are some tips:

1.   Profiles in Risk: Clearly communicate the risk profile you are asking your people to adopt and state why it is important to the organization’s success.

2.   Failure Management: Never allow an unsuccessful risk to hamper a team member’s opportunities and advancement.

3.   Key Learnings Process: Establish a formalized, non-accusatory process for harvesting key learnings from unsuccessful risks.  Distribute these lessons-learned.

For more, see “Robert’s Rules of Innovation” by Wiley, Spring 2010.

Inspiration for companies comes from the leaders, so it is the leader’s responsibility to initiate and drive the innovation program. For the program to be taken seriously and incorporated as part of the company’s culture itself, the CEO or designated leader must set a schedule of regular meetings. Regular, in-person meetings are the only way for team members to accept the serious non-wavering intentions, recognize the goals and deadlines of the project and ensure that the innovation program will not just fall off the map. It’s easy to instruct team members to be conscientious of Innovation, but new products will not come to fruition unless members feel a sense of accountability and urgency for the NPD process.

At New Product Development meetings, take action steps to ensure progress is made:

• Address issues and concerns.
• Share research and results.
• Recalibrate priorities.
• Make new decisions.
• Set objectives and action items to be completed for the next meeting.
• Request progress reports.

The leader’s inspiration and commitment sets the tone for the rest of the organization. By setting a standard of expectations, others see the NPD process as a priority and an indispensible part of the company corporate culture.

Think about the most innovative companies and you”ll find a charismatic, involved, hands-on leader – be it Steve Jobs of Apple, Herb Kohler of the Kohler company or any small innovative trendsetting company for that matter.

Here are some Inspire Tips from Robert’s Rules of Innovation to help you get started. There are three key steps to achieve the type of Innovation culture that inspires and creates intra-organization cohesion:

1. Lead by Example: It all starts at the top. Management buy-in and support of innovation and ideation is critical. And by support, I mean both material and emotional. It needs to not only endorse, but proactively push for Innovation. It’s the only way for your team to get the motivation to take time from their “day jobs” to make Innovation happen.

2. Over-Communicate, Under-Promise: Talk up overarching Innovation visions, successes (and failures), without hyperbole or pie-in-the-sky verbiage. Keep it simple. Keep it focused. Keep it real. Internal and external communications enhances group buy-in to Innovation goals. It’s important to articulate your grand vision and provide the compelling case for change.

3. Silo Demolition: Knock down the barriers that keep silos apart by creating cross-functional teams between groups that don’t typically interact. This keeps the flame of cooperation – and Innovation – burning brightly. “Silo-itis” can smother buy-in for innovation.

For more tips, see “Robert’s Rules of Innovation ™” by Wiley, Spring, 2010.

Of the ten imperatives of Robert’s Rules of Innovation, this step is all about continuous improvement. It is necessary to Observe and Measure throughout the Innovation process, or else, how would you recognize successful Innovation? A system of metrics will objectively show your progress and success each step of the way. Plan. Do. Check. Act. It’s essential to follow a course of actions that produce ongoing improvement.

So first, gather initial observations and measurements at the beginning of the NPD process. It’s necessary to establish a baseline or starting point and measurable facts versus subjective assessments.

Secondly, to have an optimal measurements, one should establish leading and lagging indicators – leading to show where you are heading, and lagging to show you rearview mirror observations.

Examples of leading indicators can be patents filed, ideas created and in the hopper, as well as development time spent. Lagging indicators include patents granted, new products introduced and percentage of new product sales compared to total sales.

Product life cycles are getting shorter and shorter, which means NPD cycles must happen quicker to keep up. For example, personal care products have a life cycle of only 2 or 3 years. That means continuous Innovation is vital. Observe and measure the time spent in each gate, and the time spent to get to the next gate. See if you can make any improvements as far as efficiency.

By following a set of metrics, you’ll be able to evaluate the performance of your New Product Development process and your end result. And it doesn’t stop after the product is launched.

Here are some additional tips:

• 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.

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).