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In the pursuit of innovation, many “enlightened” companies try to follow what they believe are established morays and best practices.
They install someone to manage new product development or innovation. They set up a litany of rules. And they select only the “best” ideas for further development.
Then they wonder why innovation falls fallow.
A recent study from The Nielsen Company. found that companies with acknowledged, successful innovation practices also have limited involvement from senior management. The teams are guided, but freed of stifling controls.
With the premise, “Manage Ideas Lightly, Manage Process Precisely,” the study of 30 top consumer and package goods companies found that ideation and new product development must be structured, but unconstrained. The companies enjoyed 80% more new product revenue when senior executives were less involved in managing innovation. The study also found that the companies realized 130% more new product revenue with less rigid “stage gates” or measurable reporting goals along the way.
In short, smart companies – Apple, Starbucks, Whole Foods and IBM, for example – have an innovation an environment that removes the constraints and welcomes a free flow of ideas, noted Tom Agan, the Nielsen SVP and managing director who presented “Renovating Innovation” at Nielsen’s Consumer 360 conference in June.
“One of the keys to successful new product innovation is to manage new ideas lightly,” Agan was quoted in DrugStore News. “While we don’t dispute senior management’s strengths and good intentions, they are often too quick to get involved in the creative process, especially when things are not going well, and their mere presence can stifle free-thinking and boundaryless ideas — which can doom the new product development process to failure.”
I agree – to an extent. This is much of what “Robert’s Rules of Innovation” espouses from its inception. To be sure, meddling leadership can stifle the process. But effective innovation thrives under the guidance of a CEO or Chief Innovation Officer , supported by the Board, with the authority to provide the air cover needed to protect unfettered (but deliberate) innovation, and the soft hand to foster creative, imaginative innovation.
Any and all ideas should be welcomed, Open Innovation from the inside as well as outside and fed into an innovation Idea Hopper , where they can be further developed, if not in the near-term, then when market conditions or forces allow for such development.
The limited involvement of management is the real gem in Nielsen’s findings. While the CEO is the best possible champion for any company’s innovation strategy (after all, support at the highest level generally helps ensure adherence to vision, mission, strategy and ultimately resources), such support also must encourage lower and mid-level management’s embracing of the concept the CEO or CIO is selling.
With objective and not to be forgotten reward systems and incentives aligned, pursuits have the highest chance of taking root.
Agan also noted the need for stage gates and scorecards to measure results. In fact, observation and measurement is essential to effective innovation. Such deliberate focus provides consistency and keeps teams on target and accountable .
The removal of stage gates can help expedite and foster unfettered innovation, as long as the required steps are still incorporated. Yet this only works if such blossoming of ideas is followed by deliberate pruning and cultivating to ensure the best ideas are pursued at the best possible moment, which – in turn – ensures the best possible opportunity for commercialization or market exploitation.
The challenge for the CIO or Emperor, especially in larger companies, remains to encourage hearty pursuit of innovation – without meddling by VPs, who have full plates, unique silos or fiefdoms, and objectives and rewards that often are contradictory to the very premise of the innovation goals. Such mis-alignment can kill innovation.
Instead, an inspired Emperor must lead the charge. He or she must align agendas, and figure out and pull into line the objectives of fully engaged teams and leadership. Across the ranks, those involved in successful innovation are rewarded or bonused accordingly. Such uniformity builds consensus, helps remove conflicting agendas and can ensure.
In the end, the Emperor will find him- or herself ruling over an empire where ideas thrive, goals are met, and innovation blossoms.
Robert Brands is a keynote speaker, author of “Robert’s Rules of Innovation” and InnovationCoach with www.innovationcoach.com.