Although it is widely accepted by CEOs and senior business leaders that innovation is the foundation of long-term, profitable revenue growth; many companies believe their innovation pipeline is under-performing against expectations.
While there are many factors that could impact your innovation performance, below are some key statements that can help you understand if you need to be taking a much closer look at the performance of the business processes being used to manage innovation:
- Our portfolio is skewed to smaller incremental projects initiatives that do not provide significant growth.
- We lack strong definition of an innovation strategy that is used to shape the portfolio.
- We tend to use subjective, gut based information rather than objective, fact based information in our decision making on innovation initiatives.
- We do not have a clear understanding of the customer’s need or well defined product definition that clearly defines why a customer would buy this product.
- We do not have the discipline to make early decisions to kill bad projects.
- We do not use objective based scorecards and perform risk assessment consistently throughout the new product development process.
- Our new products tend to not meet the financial expectations after launch.
- We tend to be more internally focused, often missing external factors that might impact our plans.
- We tend to miss our planned product launches dates frequently.
- We rarely perform detailed post launch analysis of project learning and review actual business results of new product launches.
If you are tending to agree with the above statements then there are clear signs of fundamental weaknesses in how your organization is managing and governing your innovation pipeline. These statements speak to how you are making business decisions around your investments in innovation.
If this feels like how your organizing is managing innovation, then it is time to start developing an improvement plan. Where do you start? Improving innovation performance is difficult and is fraught with false starts and initiatives that fail to deliver meaningful change.
When developing a plan it is important to assess the organizations strengths and weaknesses against a maturity model for innovation process performance. Use the assessment to identify the highest priority areas for improvement and developed a phase plan to improve the maturity in a series of steps that can be managed effectively.
Once you have identified the areas of improvement the organization should define a series of manageable steps to form an innovation performance plan. The example below shows an approach where a multiple phases are defined to improve both execution (Stage-Gate TM and portfolio) and strategy/ideation processes.
How do you effectively manage the change in the organization?