Building a case for managing innovation

“Building a startup is an exercise in institution building; thus, it necessarily involves management.”- Eric Ries, Lean Startup

Doesn’t it surprise you that while most managers think of productivity being managed, quality being perfected, and human resources being tamed by adopting time-honed management principles, creativity and innovation, somehow, refuses to fall within the bracket? Why should creativity and innovation be given such a high position in the hierarchy, to an extent that it should be reserved for a select few? Shouldn’t creativity and innovation be for all? I believe so. This article builds the case for managing creativity and innovation with a similar discipline and rigor as any other management function, and the way more successful firms manage to manage innovation.

Let me start by clarifying the difference between creativity and innovation. A working definition of creativity could be as follows, ‘the ability of an individual or a team to generate ideas which are novel and useful’. Whereas, innovation could be understood as the ‘ability of an organization to commercialize novel concepts’. In terms of the levels of operation, while creativity operates at the level of an individual, innovation is mostly a firm-level phenomenon. Or in other words, individuals create and firms sell (read innovate). Similarly, regarding the key operatives, creativity is all about novelty and utility, whereas execution or commercialization assumes central importance in innovation. The question then remains is- ‘can creativity for an individual or team, and innovation for an organization be systematized?’ I reckon, yes.

Just about half-a-century back quality, especially in manufacturing, was of the same status as that of innovation today. The largely held belief, especially in the western world, was that quality is subjected to one’s style and motivation, and can’t be institutionalized. Then came the Japanese and their quality revolution that shook most of the western manufacturing base, and today, thanks to several dozen books and a host of concepts, the manufacturing world at large has learnt the concept of quality and seems to be adopting the ‘principles and techniques’ of quality management quite well. Six Sigma, Lean Manufacturing, Toyota Production System, Quality Circles, and continuous improvement all stemmed from that quality approach. Similarly, customer service, which was, for long, thought of as an art, is increasingly getting construed as a science. Companies after companies are getting in place systems and processes to measure and manage their service levels, and then there are trainers and external consultants that bring the desired level of change. Why should innovation be any different?

Research by strategy&, published as Global Innovation 1000, has time and again shown that firms which treat innovation more of a science than as mere art are more adept at innovating. Similar, the ten years of investigating the world’s most innovative companies by BCG suggests that even large firms can manage to rule the roost, provided they manage innovation well. Else, innovations should increasingly become the realm of startups, which is not the case, as also corroborated by the innovation rankings by MIT Technology Review, FastCompany, and Forbes.

In fact, on the virtue of management and technology adoption to tame the innovation process, Michael Ringel, Andrew Taylor, and Hadi Zablit of BCG reveal that ‘65% of strong innovators mine big data of social networks for ideas’. Had innovation been so much of an act of common-sense or of serendipity, why adopt so much of technology or management thinking? It appears that successful companies manage innovation in a manner similar to that in which they manage most other functions. I believe these references offer at least a nudge to now start thinking about the ways in which a method to the madness could be offered to the act of innovation.

In a proverbial ‘standing on the shoulder of the giants’ act, let me borrow the process map of innovation from IDEO, the world’s foremost design outfit, to bring home the point.

Ideo's design thinking flow-Innovation Management

Figure 1: Innovation process map (Courtesy: IDEO)

I prefer the process map presented by IDEO over other representations because, in my research and practice, this chart is the most accurate depiction of how things unfold in the field. Let me start by explaining the process chart, and then on how the journey of innovation could be managed.

  • It all starts with ‘Discovery’, which is to unearth the existing, and in the context of innovation, it is to bring to fore customer pain points, hidden opportunities, unseen patterns, or sheer unresolved constraints. This discovery calls for a trained eye and a bias for action that leads to fresh insights. Remember what Louis Pasteur quipped, “fortune favors the prepared mind”. The question then is, how does one prepare the mind? It all happens through investing in the science of market research, mostly through anthropology, ethnography, usability research, case studies, focused groups, and several other ‘techniques’ to gather and assimilate insights.
  • Next comes ‘interpretation’, which is to map the several potential problem areas or opportunities to those which the focal firm is adept at addressing. Remember the famous response Henry Ford got when he went about asking people on what did they want, and they said, ‘a faster horse-cart’. The way Ford interpreted their statement changed the course of the history, and he delivered an affordable car made through the famous assembly line and driven by the principles of modern management and workflow. That’s interpreting the pain point on possible avenues of intervention.
  • Only after a good understanding of the customer pain areas, and what is in for the company, the team goes about generating ideas. Remember, ‘ideation’ is not the starting point of innovation, it is, in fact, the third stage! So, good innovations don’t come from good ideas; they come from genuine problems. Another virtue of ideation is that quantity matter over quality, which goes back to the saying of Linus Pauling that “the best way to have a good idea is to have a lot of ideas”. Once again, the platform, tools, and methods of generating and capturing ideas come in handy. Simple techniques like Lateral Thinking triggers and applications liked Mind Mapping can mean a huge surge in quantity of ideas, and eventually the quality.
  • Next is ‘experimentation’, which builds on the dictum of the innovation which is to ‘fail faster to learn sooner’. Experiments have to be cheap and dirty and should have been ‘designed’ such that one learns something tangible from those experiments. Here again, simple techniques, ranging from clay modeling to mock-ups on the Internet, can help save time and money while offering invaluable insights and ratification to ideas.
  • Finally, the ratified ideas and those verified by the customers get to see the light of the day and evolve thereon.

As depicted in the text, each of the stages of the innovation process offers avenues for leveraging technology to both lessen the time and cost, and hasten the learning. Techniques from management, process design, technology adoption, and managing talent, all come in handy when it comes to innovation.

To sum up, innovation should be treated with same rigor and discipline as quality, and, today, we do have principles, tools, and techniques to offer a method to the madness.

 

Innovation management

About the Author

Pavan Soni
Dr. Pavan Soni is an Innovation Evangelist by profession and a teacher by passion. He is the founder of Inflexion Point, a strategy, and innovation consulting setup. Pavan works as an advisor at HackerEarth.
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