Innovation is about finding a better way of doing something. It’s different to invention, which relates to creating things. It’s also different from improvement, which is about doing something differently rather than simply doing it better than before.
Innovation-related initiatives, like other business processes, require structure in their planning and implementation. We’ve been particularly interested in some recent work from The Boston Consulting Group that has looked at the factors that typically enable innovation, the key success factors/characteristics of successful innovation, and the strategies that can be used to create value from innovation.
In this first blog in a series of three, we take a concise look at the five enablers of innovation that differentiate the most innovative organisations from the rest of the pack:
- The commitment of senior management
- The ability to leverage Intellectual Property (IP)
- Strong management of the IP portfolio
- A customer focus
- Well-defined and well-governed processes
1. The commitment of senior management
Fundamental changes in corporate culture, systems, and practices are made in order to promote innovation throughout the organisation.
2. The ability to leverage Intellectual Property (IP)
The most innovative companies use their IP to establish competitive advantage. They’re regularly culling their patent portfolios, structuring their organisations in order to incorporate IP considerations at every step of the product development process, and generating incremental revenues by selling and licensing IP.
3. Strong management of the IP portfolio
The most consistent innovators have in place rigorous processes for identifying and promoting high- potential projects—and for halting them if and when their promise fades.
4. A customer focus
The most highly regarded innovators recognise that innovation does not occur in a vacuum. They constantly interact with their customers. This helps ensure demand for their products at the time of market entry, deepens their relationship with their customers, and prevents them from overspecifying or overengineering products beyond what customers need or are willing to pay.
5. Well-defined and well-governed processes
The most consistently successful innovators have strong processes for reviewing projects in development and ensuring their timely completion. They use transparent criteria as the basis for decisions; draw clear distinctions among governance, portfolio management, and project management; and recognise the importance of being effective along all three dimensions.
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This is the first in a series of three blogs that takes its inspiration from a report by the The Boston Consulting Group (BCG) called “How Leading Companies Search for Their Next Big Thing”. You can read the entire report here