If you're coming to CRM Evolution next week in NYC, you might notice that one of the sessions I'm doing matches the title of this post. Of course this isn't the first post I've done on innovation, this one, for example, does a pretty good job of looking at the process. It's a topic that is getting a lot of attention from companies in a wide set of industries. Some of that attention stems from the challenging economy of the past few years and the incredible competitive pressure that it has spawned. Changing customer and employee attitudes and expectations are also creating pressure to involve a broader set of constituents in the innovation process and simply to be "more" innovative as a company. Lastly new technologies and new ways to apply technologies are helping fuel different approaches to the innovation process.
You might ask yourself though, why I'm talking about innovation at a CRM event? I mean product or service innovation is a function of a companies product or service design / develop / make process, right? I guess it's obvious where I'm heading with this, the innovation process (and yes, it is or needs to be a planned and managed process) is much bigger than just the core product or service strategy teams. The need isn't necessarily different, input from customers, suppliers, partners, and employees has always been desired to some degree. What has changed though, is the ability to get that input and do something with it.
Today there are many challenges in getting an end-to-end innovation process in place and operating effectively. Some of these challenges are operational, some are cultural and some are technical. Operationally the responsibility for innovation, at least product or service innovation, usually resides inside an organizational silo and let's face it, most companies still operate in the industrial model. The organizational and operational issues are related directly to the cultural challenges as well. Does your company have a culture of innovation and does that culture involve distributed input and involvement or does it leave innovation in the hands of a few, select individuals? Who owns innovation, a department / division, a senior executive or the entire company?
From a technology perspective many companies do not have systems that help facilitate the innovation process. It's more than that though, even if the company has some systems to facilitate the process are they integrated and do they form an end-to-end process? Technology, like organizations, often exists in silos. In fact, the way we talk about apps is siloed, CRM, PLM, PPM, etc. The technology needed for a complete innovation process spans the entire enterprise and stretches outside to customers and partners.
Innovation is, maybe more than any other time in history, an imperative for company competitiveness. The Internet and technology in general have opened up new avenues for creating innovation, but at the same time, that same effect has changed the nature of competition. In the past, usually at least, companies knew much about new competition and had time to prepare a defensive response. The pace of innovation has increased dramatically though as has the unpredictable nature of new competition across everything from product / service innovation to innovation at the fundamental business model level. Don't get me wrong, there has always been the potential for disruptive innovation, but the pace of disruption as well as the nature of that innovation seems to have changed. New competitors can pop on the scene unannounced and existing competitors can make bold moves rapidly that put a lot of pressure on the company and its strategy (that could lead to a discussion on flexible strategy, but I'll save that for another post).
Anyway, I'll talk more about this in the session next week. In the mean time, here are some ideas for building a more successful innovation process:
- The business needs a complete end to end integrated process facilitated by a lifecycle set of integrated technologies. Often the breakdown in innovation is in the handoff between technology / organizational silos, integration can combat that.
- A robust ideasourcing tool is essential for collecting, cataloging and managing ideas from all constituents that the company wants to involve, customers, partners and employees. A transparent collection and management process will go a long way to encourage continued participation. Let the community know what happens to its ideas.
- There a lot of expertise locked away across your business. By involving all employees in the innovation process in some way, you have a much better idea base, and your get more from your investment in employees. The additional fallout is a more engaged and satisfied employee. Think of the power of the collective intelligence of your whole workforce.
- Involving customers in the innovation process has many benefits. The most obvious is that you actually know what the customers are looking for, what challenges they are facing and what they are doing with your products and services. Engaged and involved customers are more satisfied and more likely to stay loyal. An ideasourcing activity in your customer community is a great way to create the "what's in it for me" situation needed for ongoing involvement.
- Innovation needs leadership, and in my opinion, very senior leadership. Who is your chief innovation officer? In many businesses it's the CEO, or perhaps should be. Changing culture is hard and having strong leadership that openly leads the process is a big deal.
- If you're implementing a innovation management process, don't forget all of the supporting elements. Aligning employee goals and incentives, for example, to encourage participation and collaboration is necessary to change behavior. Openness and transparency in the process is very important, not that you shouldn't protect sensitive corporate IP, but there is a workable approach for each business (and it varies by business and industry).
- Changing culture needs a specific change management plan, champions, executive support and use, etc.
So hopefully I'll see you in NYC next week for CRM Evolution and you'll join the session on innovation to flesh this out more. If not, join in here by leaving a comment.
(Cross-posted @ Michael Fauscette)