Managing innovation as a predictable driver for growth

Research and innovation play an essential role in creating added value for society. They’re also critical levers to ensure a sustainable and inclusive recovery, while boosting the resilience of our production sectors, the competitiveness of our economies and the transformation of our socio-economic systems. However, innovation success is often uncertain and inherently risky to predict.

The scaring high numbers of failed market introductions across industries sometimes make innovation a perceived leisure activity when a company is doing well. Even worse, innovation budgets often suffer in times of crisis although top management previously listed it as a number one priority. There are several studies though that prove the contrary leads to more mid-term outperforming growth.

If you’re going to search for a golden needle in a haystack, you need to know when to move on.

Many innovation professionals currently struggle to secure IR&D budgets, as opposed to internal investment programs on digital transformation or operational excellence as the innovation program is seldom managed as a predictable driver for growth. However, it’s our firm belief that innovation processes can, and should, be managed in a more objective and transparent way, making it more reliable as a critical engine for company longevity.

Successful companies require predictable growth drivers. What’s predictability in innovation exactly? This clearly differs for various involved parties as the following overview shows. A holistic innovation program approach should fulfill these various needs.

INVOLVED PARTIES	PREDICTABILITY FOR THEM	SYMPTOMS OF STRUGGLE	HOW TO DELIVER PREDICTABILITY
Innovation enthusiasts	Receive credits on innovation effort even if the realized impact is not visible (yet) Being able to focus on innovation next to the daily operations	Work in the shadows in lack of clear resource approval Low initiative on calls for ideas (due to lack of confidence in adherence)	Deliver clear strategic direction on where to ideate and to get approval for their initiatives Provide a stage-gate flow to gradually tackle the innovation challenge in a lean & agile way (innovation practice)
Middle management	Consequent resource policy to avoid business Continuity challenges Program support to tackle short-term opportunities	Prioritizing daily deliverables over innovation initiatives Setting up own initiatives to deal with an (ad hoc) innovation challenge	Provide a flexible innovation framework that leverages their business unit’s challenges Provide incentives to accelerate innovation and cross-company collaboration Provide a framework to deal with temporal loss of resources
Top management (& shareholders)	Balanced risk-taking and investment Transparent and objective decision-making process on investments KPI’s for follow-up	Putting innovation on the radar, but only taking safe bets on short-term ROI Gut-feeling approval for innovation budget requests No focus on spill-over potential to other business units No framework provided to accelerate insight gathering and de-risking Subjective discussions on whether the company is over/under-spending on innovation	Build a transparent portfolio overview, with a sound risk/reward ratio, spread over the different activities Objectivize innovation effort and impact with simple, yet effective KPI’s (innovation accounting) ‘Fair’ business case thinking framework (more on that later)
Stakeholders	Long-term vision on ecosystem collaboration and value creation Understanding when a reach-out to the company would be sensible	Little or no reach-outs for collaboration Fuzzy bi-directional requests in the value chain	Provide an innovation thesis as a mission and strategic outline Provide a portal and/or dispatch platform to internal stakeholders, incl. communicating on updates

Dan Toma, Tendayi Viki and Esther Gons utilize the following model in their award winning book “The Corporate Startup” in order to summarize the most critical innovation-related activities in a company. Each of these building blocks follow a step-by-step approach to deliver a predictable process.

It’s up to the innovation manager to substantiate these building blocks, keep them connected and relevant, and communicate them clearly to all involved parties. As the discipline of innovation management is still a rather new domain, new insights on best practices pop up constantly.

Interested in upgrading your innovation governance and culture?  Book a call to discuss our Innovation Audit, building further on these insights.

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Leave us your email and get in contact with Pieter Deleye, Manager Innovation Acceleration Services – Strategic Innovation, to help you with your innovation process.