“7 Best Practices”

1. C-Suite Vision & Championing
2. External Connectivity/Customers
3. Strategic Focus & Sponsorship
4. Core Innovation Process
5. The Right People-Profiles
6. Adoption Integration & Pull
7. Governance & Support

(I encourage you to read the articles on 1-6 for context)

If the previous 6 practices are the necessary techniques to build a “winning team,” think of governance as the fundamental guidelines that dictate the “rules of the game” — …time periods, scoring, time-outs, fair play & fouls, referees, etc — all the ways in which order and rhythm is brought to the way players interact and the game is played.

While governance can evolve to become quite sophisticated, here are the general categories of rules with basic questions to answer/define:

1. Innovation Project Definition: what constitutes a project or initiative, and what does it take to start/stop one (ex. problem definition, sponsor, team, etc) ?
2. Milestones & Transitions: when/what are the key milestonses in the process and corresponding objectives/criteria/metrics to know if they’ve been attained ( ex idea, project, proof of concept, startup)? Also what happens when a milestone has been passed (i.e. transition)?
3. Funding: where does funding come from and how is it allocated per the projects and milestones (ex from the innovation team, and/or core business)?
4. Management: who facilitates and decides at key milestones?
5. Meetings/Reviews: why/who/when are regular meetings (ex coaching-checkins, steering committees, sponsor/stakeholder interaction, etc)?
6. Staffing: how are people recruited, managed and coached through the process and through key milestone transitions (sometimes called “nesting strategy” – ex. staying with the team or handing off)?

Clearly the answers to the these questions are far-reaching and will shape the way innovation is done in the organization. However we recommend that “rules of the game” evolve according to two guiding principles:

First, “start with the minimum” allowing you to learn, iterate and build additional governance as it is needed/pulled (not ahead of when it’s needed – overdoing governance at the start is a key pitfall that turns into bureaucracy and busy-work).

Second, as the company evolves its strategy, so should the role of innovation … and the rules governance must adapt and evolve accordingly (it’s actually a good sign … it means innovation is “part of the game”). As a note from our experience, we work with companies who are on their third or fourth evolution of their “innovation governance model” – yours will change as well.

Finally keep in mind that although the notion of “rules/governance” may initially feel antithetical to “innovation freedom”, if done correctly, a healthy governance model actually provides a way to keep stakeholders interested & engaged, it defines “innovation constraints & parameters” that actually promote creativity, and it helps us keep score to know what adjust to increase our chances of winning.

Picture: pexels.com

1. C-Suite Vision & Championing
2. External Connectivity/Customers
3. Strategic Focus & Sponsorship
4. Core Innovation Process
5. The Right People-Profiles

(I encourage you to read these articles for context)

If the front-end of the innovation funnel depends on business-sponsorship and customer-proximity, the backend is the mirror image of that. The funnel doesn’t work without the constant focus on ensuring “Adoption, Integration & Pull.” While it seems so logical, it’s a major challenge for innovation teams to master the paradox of both generating discontinuous innovation-breakthroughs (vs incremental), while ensuring it “fits somewhere into the puzzle” of the overall host-organization.

Here’s an axiom we’ve found to be tried and true – “if the host-organization paying for the innovation activity doesn’t see value in it, the innovation team’s work will end up on an ‘island of abandoned toys’.”

While this seems so logical, it’s key the reason why most innovation teams in large organizations fail and get shut down – their work simply wasn’t continually made relevant and wasn’t impactful enough to justify the investment.

Here’s a few best-practices to keep in mind to avoid the “island of abandoned toys, and build strong innovation-relevancy and pull:

• Stay Close to the Customer (externally) – in large organizations that easily drift from the “voice of the customer” to “internal opinions,” staying rooted in fresh customer-insights & proof of market-demand is an ace that customer-centric innovation teams have to consistently play. This should happen in a few ways:
  • Customer-Direct Input: be sure to share firsthand quotes, stories, pictures etc that make the customer need & interaction with your solution come to life.
  • Involve Stakeholders with Customers: give internal stakeholders front row seats to “seeing/hearing it for themselves.” This could look like participation in interviews, experiencing the concept, a “day in the life” of a customer etc.
• Stay Close to Sponsors & Strategy (internally) – your innovation initiatives are not going to live with you forever, but will have to be transplanted from your greenhouse (or nest) and live somewhere else sooner or later. Begin to cultivate & nurture the soil now. Here are a few tactics:
  • Have a Significant Sponsor – this should be a senior level executive (preferably C-Suite) who is an advocate for the project, outside of the innovation team. This helps create visibility and proof of internal desirability from the start.
  • Frequent “Strategy vs Innovation” Discussions – as the initiative continues to evolve & take shape, pressure-test its fits to a business-sponsor’s specific strategic ambitions. It forces the strategy to become practical and identifies disconnects sooner than later.
  • Frequent Experience – experientially “show & tell” the product letting stakeholders “feel it in their own skin.” This is an invaluable way to get feedback and hear about concerns & challenges early on. Don’t wait until the end for the “big reveal” (aka “big flop”).
  • Skin in the Game – as the initiative progressively matures, ask sponsors to progressively put more “skin in the game” – ex money to finance the innovation activity, participation of their people, staffing of their teams, decision-making with their management, etc.

In summary, if the goal of an innovation project is for it to survive and thrive beyond its infancy, grafting it back into the organization cannot be an afterthought, but must be something that is consistently nurtured … from the beginning.

Picture: pexels.com

1. C-Suite Vision & Championing
2. External Connectivity/Customers
3. Strategic Focus & Sponsorship
4. Core Innovation Process

(I encourage you to read these articles for context)

This time we’ll zoom-in on another critical success-factor – the importance of having the right people. It has been said that “entrepreneurship is fundamentally a people business” – I could not agree more. While the other factors provide the “skeleton” for success (i.e. structural- and environmental- parameters), the “people part” is the “soft tissue” that makes it live.

However, while it may appear obvious on the surface, getting the “people part” right is actually a key challenge, especially in large established organizations. Why? To better understand the dilemma let’s look at the different people-profiles aligned to different business-maturity-levels. The following categorization is one we’ve adopted from a leading innovation team at Proctor and Gamble.

1. Starters – those that have the vision, drive and high tolerance for risk & ambiguity and thrive on creating something from nothing. They typically have strong abilities in understanding customer problems & needs as well as a passion & capabilities for the actual “craft” that solves the respective problems (ex programing, construction, fashion, etc.). As the name implies, they are the “spark” that lights the flame of action & innovation.
2. Scalers – they like to build – strategy, processes, teams. They work systematically to expand & standardize things that work “manually” into things that can be replicated through other people and an organization at large. While they may be less creative or inspired than starters, they are the catalyst that can take an idea that has potential and turn it into a scalable business.
3. Sustainers – they’re able to manage and bring stability & predictability to large organizations. Maintaining processes, while ensuring discipline & compliance to them, is critical to incremental/continuous progress. They have the skill & patience to build coalitions, working through complex organizational systems and networks to keep the “aircraft carrier” pointed in the right direction and moving forward.
4. Salvagers – these people “wake up when the house is burning down.” They’re motivated by a crisis, the potential for a turnaround, and have the courage to organize quickly and make tough decisions. They often have low regard for “rules & norms” and have the ability to be unemotional when having to “amputate to survive.”

Based on the above, a few insights are worth deeper consideration. First, all the personality-profiles are equally important (not one better than the other) but derive their unique value depending on the specific “maturity-need” of the initiative or organization at a given moment in time. Second, from the perspective of innovation & entrepreneurship, the starter & scaler profiles are the undisputed essential ingredient. Taking these a step further, and considering the context of most large organizations, this creates significant tension, since the cultural center of gravity js typically “sustainers(ing)” – ex mindset, processes, metrics, rewards, recruiting, risk tolerance…

This begs the practical question of where to find and how to manage starter & scaler profiles within a sustaining organization, but also highlights the primordial goal (and challenge) of creating & protecting a starter & scaler sub-/counter- culture within an organization who’s mindset is the opposite (sustaining).

On the latter (creating an entrepreneurial organization), the success-factors mentioned in the other posts in this series provide guidance on how to create the “ideal conditions” to accomplish this. On the former (finding/managing/organizing the starter & scaler profile & mindset) we’ll provide additional practical guidance in our next post.

1. C-Suite Vision & Championing
2. External Connectivity/Customers
3. Strategic Focus & Sponsorship

(I encourage you to read these articles for context)

This time we’ll zoom-in on another critical success-factor – the importance of a “core innovation process” – a consistent, disciplined, yet fast & flexible approach that gives direction to an innovation-initiative as it matures from a fledgling idea to a legitimate business opportunity.

An analogy that comes to mind is “acting” – it can range from something as simple as an “in-the-moment-improv” (or children’s charades) to a Shakespeare production that is very structured, planned & practiced. The innovation funnel is much the same way, starting with an idea that can be born on a post-it-note, to a scaled-up business model with complex operations and a supporting “cast”/organization.

While it’s impossible to plan & predict every step of the “business-building adventure,” it’s nevertheless far from random and requires a consistent approach to be successful. Clearly there’s a wide variety of “innovation processes” to choose from, but here are some of the underlying factors we believe to be the backbone of those that are most effective:

1. A Portfolio Approach & Mindset (“several plays”)– it’s proven that the more concurrent/competing solutions we have for a given problem (especially early on), the greater the learning/cross-pollination potential, and the greater chances of success. A large quantity of ideas is critical to fill the innovation funnel (especially given the “death-rate”). Also, it’s important for teams and management to develop the skill of evaluating an innovation “portfolio” (similar to a stock portfolio – risk, diversification, health…) instead of only looking at individual ideas. It’s not only the initiatives within a given stage, but all the initiatives across the innovation funnel that makeup the portfolio.
2. Phases, Milestones & Funding (“several acts within a play”) – a consistent approach enables focus and cadence. When phases of the process are clearly defined with corresponding deliverables, it enables teams to stay focused on the right kinds of activities and goals. It also establishes outcomes & metrics that can be reviewed at key milestones to determine if an initiative should proceed or not. Keep in mind that two important things are happening as we move through the funnel – 1) de-risking the initiative to increase the odds of success (as basic assumptions are proven … or not), and 2) building our learnings to continually pivot the initiative into more successful territory. As these objectives/milestones are achieved/proven, commensurate funding (aka “progressive funding”) is released to fund activities for the next milestone. This enables organizations to increase the level of funding in a controlled way as success is proven.
3. Methodology & Tools (“the script”) – as teams move through the process, different tools & frameworks can be applied. While there are many innovation approaches that are available, in general those focused on a deep understanding of user-needs & fast-prototyping are typically better suited for the early stages of the innovation funnel (like design-thinking), while those focused on business-building and scaling are typically better for later stages (like business model design and lean startup). In the end, when it comes to methodology, the most important thing is to pick an approach and stick to it rigorously. This provides a stable base to begin producing outcomes, develop tools & frameworks that prove effective, and develop capabilities & expertise in using them.
4. People & Casting (“the actors”) – while this point is so important that we treat it as its own “success-factor” (which we’ll write about in a future post), it’s important to note that the phases of the process also trigger/imply that different skills & capabilities are needed to enable the evolving maturity of the initiative. Indeed the skills/people needed for ideation & creativity (at the start of the funnel) are vastly different than those needed to run operations of a scaling business later on. Like a theatrical play, the “cast” adapts as the story evolves. This also requires intentional management and oversight (managing the right casting of teams & capabilities), but the process is intended to help us anticipate and prepare for these “people-needs” as the initiative matures and needs emerge.

So as you think about how innovation works in your organization – are there clear phases & milestones defined? … is it managed as a portfolio of ideas/initiatives? … are there consistent tools & methodology to enable the work? … is “people-casting” intentionally managed?

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1. C-Suite Vision & Championing
2. External Connectivity/Customers

(I encourage you to read these articles for context)

This time we’ll zoom-in on another critical success-factor – the critical importance of “Strategic Focus & Sponsorship” to guide the innovation funnel. Imagine an aircraft carrier (aka “large company”) about to embark on a voyage. It’s about to leave port and in less than one hour will disappear over the horizon … but to get to this moment in time, there’ve been weeks (if not months) of planning and strategizing – defining the mission dictating the duration, supplies, crews, maintenance, etc. Clearly the main purpose of the aircraft carrier is to serve as a base/hub for targeted interventions – ex sorties of aircraft, deployment of special forces on speedboats, helicopter drop-offs etc – but all of these are consistent with the defined over-arching mission of the aircraft carrier.

The exact same is true with innovation-organizations in large companies. While they are “smaller missions operating off of the aircraft carrier” it’s very important for them to stay aligned with the overall mission. We believe this is paramount at two inter-related levels:

1. Top-Down Strategic Innovation Spaces/Agenda – the company has a strategy it is executing upon and needs specific innovation-support in targeted areas to help explore possibilities and new horizons beyond the scope of its traditional business. Since there’s a vast scope of potential horizons, clearly defining them is essential to ensure a strategy-driven innovation agenda (ex aka “strategic innovation spaces”, “priority domains,” “areas of focus”). It’s the only way your “aircraft sortie” will actually make an impact toward the bigger mission and find its way back to the aircraft carrier. Without it you’re lost, wasting resources on “random targets,” demotivating your crew, and quickly losing relevance to the mother ship. Tangibly this means the C-suite’s involvement in selecting specific innovation-spaces (typically 3-5) to explore & fund, within which we will chose specific initiatives to experiment.
2. Bottom-Up Core Business Sponsorship/Buy-in – this one can be tricky (and sometimes controversial – since having enough autonomy is also very important) … however if no one in the core business is interested at the innovation-initiative-level, chances are high you’re creating “innovation-orphans” … also known as the “innovation island of abandoned toys.” It’s the “cool but useless (CBU)” stuff that may be a breakthrough to us, but has no chance of survival back in the real world of the core business (…no interest, no resources, too far away from the core, etc.). Even though you’re flying the mission, somebody back at the aircraft carrier has to care, provide support, and be deeply invested in the outcome. This means core-business sponsorship at the initiative-level, both at the beginning of the process (“push”) and continued “skin-in-the-game” to create “pull” for the initiative coming back out of the innovation funnel  (…management sponsorship, money, people, time, access to customers, exposure … connecting back to the core).

So as you think about how your innovation efforts fit to the strategy of your company…what can you do to make sure you’re playing an essential role to enable that strategy?…what are the specific innovation-spaces that have been chosen (have they even been selected)?… and how do you show a direct line of relevance to them?

On the other end of the spectrum, how do you make sure the individual initiatives you’re working on demonstrate a direct line of relevance to these innovation spaces, and the core business? … how do you ensure & preserve core-business sponsorship from beginning-to-end throughout the innovation process to maintain buy-in and avoid adding to the “island of abandoned toys?”

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