Innovation and CreativityInnovation ManagementDisruptive Innovation

1. Definition and Types of Innovation:
2. Incremental vs. Radical Innovation: The book differentiates between small, continuous improvements (incremental) and breakthrough changes (radical).
3. Product vs. Process Innovation: It also highlights innovations in products and services compared to innovations in processes and operations.

• Conduct an Innovation Audit: Evaluate previous innovations within your organization to categorize them as incremental or radical, and product-related or process-related. This will help understand your company’s innovation landscape.

• A successful product innovation example is Apple’s transition from the iPod to the iPhone, blending entertainment and communication.

1. Leadership Role: Leaders must champion innovation, allocate resources, and create an environment where experimentation is encouraged.
2. Cultural Change: Cultivating a culture that embraces change, tolerates failure, and rewards creativity is fundamental.

• Leadership Training: Develop and implement training programs for leaders focused on fostering an innovative culture.
• Recognition Programs: Establish systems to recognize and reward employees who contribute to innovative projects.

• 3M’s famous 15% rule, which allows employees to spend 15% of their work time on innovative projects of their choice, is a prime example of fostering an innovation culture.

1. Strategic Planning: Innovation strategy should align with business goals and competitive strategy.
2. Portfolio Management: Companies should manage a balanced portfolio of innovation projects with varying levels of risk and potential return.

• Strategic Alignment Workshops: Host workshops to align innovation efforts with the broader strategic objectives of the company.
• Portfolio Analysis Tools: Implement tools to analyze and balance your portfolio of innovation projects.

• Google’s approach includes both risky moonshot projects (like Google Glass) and incremental improvements (like algorithm updates).

1. Organizational Structure: Structure influences the ability to innovate; separate divisions for exploration and exploitation can be beneficial.
2. Cross-Functional Teams: Encourages diverse teams to work on innovative projects, drawing on multiple areas of expertise and perspectives.

• Create Innovation Labs: Establish dedicated innovation labs or divisions tasked with exploring new technologies and business models.
• Form Cross-Functional Teams: Regularly form and dissolve cross-functional teams to tackle specific innovation challenges.

• Procter & Gamble’s “Connect + Develop” approach taps into external ideas through a dedicated innovation lab.

1. Innovation Funnel: Describes a structured process from idea generation to development and commercialization.
2. Stage-Gate Systems: A robust gating process to evaluate and filter ideas as they move through development stages.

• Implement an Innovation Funnel: Develop a systematic funnel process within your organization to drive ideas from conception to market.
• Adopt a Stage-Gate Process: Use a stage-gate system to regularly evaluate projects and decide whether to advance, iterate, or terminate them.

• GE’s FastWorks, an adaptation of the Lean Startup methodology, uses iterative cycles and feedback loops to develop innovations faster.

1. Metrics and KPIs: The importance of measuring innovation efforts using balanced scorecards and other metrics.
2. Financial and Operational Metrics: Balancing short-term financial metrics with long-term innovation health indicators.

• Develop Innovation KPIs: Establish key performance indicators (KPIs) specifically focused on measuring innovation efforts.
• Balanced Scorecards: Implement balanced scorecards that include both financial and non-financial metrics tied to innovation activities.

• Corning Inc. uses comprehensive metrics to assess R&D productivity, including a balanced mix of project milestone achievements and financial returns.

1. Leadership Involvement: Top management must be actively involved in steering innovation initiatives.
2. Governance Frameworks: Creating governance structures to oversee innovation processes and ensure alignment with strategic goals.

• Establish Innovation Councils: Form councils or boards composed of senior leaders to oversee and guide innovation efforts.
• Set Clear Governance Policies: Develop and communicate clear governance policies that outline how innovation projects are managed and evaluated.

• IBM’s “Emerging Business Organization” (EBO) model, where focused leadership teams govern high-potential projects.

1. Collaboration and Partnerships: Leveraging external networks, including partners, customers, and even competitors.
2. Crowdsourcing: Tapping into the collective intelligence of crowds to generate and refine ideas.

• Engage in Strategic Partnerships: Actively seek out partnerships with startups, universities, and other companies to co-develop new innovations.
• Harness Crowdsourcing Platforms: Use platforms like Innocentive or Kaggle to crowdsource solutions and innovations.

• LEGO’s use of customer co-creation on their LEGO Ideas platform, where fans submit and vote on new set ideas.

1. Risk Management: Identifying, assessing, and mitigating risks inherent in innovation projects.
2. Resilience and Adaptation: Building resilience by having adaptable strategies to pivot or change course as necessary.

• Risk Assessment Workshops: Conduct regular workshops with innovation teams to identify and assess risks in their projects.
• Develop Contingency Plans: Create contingency plans for high-risk projects to ensure quick adaptability in changing conditions.

• Intel’s iterative product development cycles where small product launches test market reactions and inform larger rollouts.

• Continuous Learning and Adaptation: Foster a continuous learning environment within your organization by regularly revisiting and refining your innovation strategies and practices based on feedback and results.

Innovation and CreativityInnovation ManagementDisruptive Innovation