Today there is no need to convince anyone about the importance of innovation. Most managers understand that in a world where change is not only constant but accelerating, the company that stops innovating will lag behind its competitors.
Additionally, the economic crisis that we are experiencing has made us remember how important it is to innovate to ensure the survival of our companies. However, despite the fact that most managers recognize that innovation is important, very few know how to implement it or have it among their top priorities.
In my opinion, the dilemma is not whether to innovate or not to innovate, since most companies innovate to a greater or lesser degree. The challenge today is how we can innovate faster and more systematically. In my experience, most companies in Latin America innovate "at the spark". In other words, innovation is practically a random act, a spark that jumps from time to time in the minds of certain people, be it the owner of the company or a visionary manager. If these people leave the company, the innovation disappears. In other words, innovation is not a capacity that is managed and systematized in the company to improve competitive advantage.
There are already some leading companies that see innovation as a critical business process, like sales, finance, or human resources, that can be planned, managed, and measured. Fortunately, the practices and systems to implement innovation as a key capability in the company exist. Below I explain how to implement an innovation program in your company, regardless of the size of your company.
Align innovation with company strategy
Many companies jump into innovating without having a clear vision of how innovation will help them improve their competitive advantage. Most of these efforts are viewed by staff as "a fad" and end up becoming the "flavor of the month." To be truly effective, innovation must align with the company's strategic objectives. It is not about innovating for innovation, but innovating to increase sales or reduce company costs, in short, improve profitability.
Many companies are lost in innovation for not having a clear innovation strategy. So they start wanting to innovate in everything and end up innovating in nothing. Before starting an innovation process, it is necessary to define very concretely and operationally what innovation will mean for the company. It is very different to innovate in a food company, in a bank or in a communications company, so each organization must define what it means to innovate in their industry.
Before starting any innovation effort, it is important to define how many resources the company is willing to invest in innovation (innovation budget) and calculate what the return on that investment may be. In the end, as the manager of a bank that implemented an innovation program in Central America told me, "innovation must be seen as a business in itself."
Get the commitment of the management team
Like any change you want to make in a company, what does not have the commitment of senior management will not work. It sounds obvious to say, however I have noticed a dramatic difference in innovation programs that are initiated and supported by the CEO, from those that are driven solely by one functional area. If top management does not believe in innovation, that attitude will permeate the entire organization. In the end, the passion for innovation is something that cannot be simulated. Either you have or you do not. Either innovation is on your priorities or it is not. In the end, we are not going to fool anyone, people will see how much time the management team spends on innovation.
A very concrete measure that I have seen the General Managers implement so that the organization gives importance to innovation is to incorporate it as one of the criteria used for the evaluation and compensation of executives. When this happens, everyone immediately starts paying attention to innovation.
Develop a communication, training and incentive plan
Once we are clear about the approach we want to give to innovation in the company and we have the commitment of the management team, it is necessary to communicate our plans to the rest of the organization. Employees need to know why innovation is important and what is expected of them to make the company's innovation program a success. In my experience, most people get excited about the topic of innovation, but what they always say is: 1) "I want to innovate, but I don't know how to do it" and 2) What do I gain if I give it a good idea to the company? This is why it is very important to train people in innovation and creativity and offer them incentives, both intrinsic and extrinsic, so that they are motivated to innovate.
For a company to innovate, it must start by training its personnel in innovation. This includes explaining what innovation is, what is the difference between creativity and innovation (creativity is having good ideas, innovation is making them come true), what is the process to follow to innovate and how can you identify opportunities for innovation, among others. People must also be given practical tools so that they can innovate in their daily work, organized around the basic stages of the innovation process (search for opportunities, generation of ideas, evaluation of ideas, development of ideas and implementation of innovations).
For people to really motivate themselves to innovate, they must know what benefits exist for people who contribute ideas to the company's innovation program. Contrary to popular belief, money is not necessarily the best reward for innovators. People often value recognition and the possibility of doing the job they like the most.
Define structure and roles to support innovation
With the staff trained and motivated to participate in the innovation program, it is necessary to define a structure, whether formal or informal, that supports innovation efforts. This structure will be the “bridge” that will allow ideas not to be lost and to enter the company's innovation system. There must be someone who dedicates a percentage of their time to coordinating innovation in the company and there must be leaders or guides in each area of the company who dedicate a percentage of their time to stimulating the generation of ideas and helping to implement innovation projects.. These leaders should support people who have an idea to shape and present it in the company's idea management system. Without this structure or bridge, it will be very difficult for innovation to become part of the organization and, therefore,ideas will continue to be lost in the company.
Create a process to manage ideas
Just as there is a process to support sales, finance, purchasing, and human resource management in companies, there must also be a formal process to manage ideas. Everyone should know where to communicate when a new idea occurs to them. The idea management process must allow anyone from the company to contribute ideas, regardless of their level or place within the organization. The only thing you have to be careful about is not to bureaucratize the process too much. If collaborators have to fill out form F-400 and fill out template P-600 to come up with an idea, you'll end up killing the innovation. Your innovation process must be simple and keep a balance between freedom and discipline.
The goal of the company's idea management process should be to reduce the time between the moment someone comes up with a good idea and it is implemented to become money, either through process improvements or of new products or services that are launched on the market. Some companies in Costa Rica use technology to enhance their innovation processes and have implemented "software" that allows them to capture, evaluate and monitor the implementation of ideas in the organization.
Define the process for evaluating ideas
In my experience, what companies lack to start innovating are not good ideas, but a process that allows them to capture and evaluate ideas and select which ones to implement with the organization's scarce resources. In many companies, what is left over is creativity. The problem is that they don't know what to do with so many ideas. This is why it is very important to define what are the criteria by which ideas are going to be evaluated, who are the people who are going to evaluate ideas and how are decisions going to be made to select the best ideas. As a manager told me: “we are very innovative, what happens to us is that we don't know how many ideas we have and which ones have the greatest potential to improve the company's profits.”It is in the process of evaluating ideas where the greatest bottleneck of innovation occurs in most companies.
An important aspect that the company's collaborators must be clear about is that not all the ideas they propose can be implemented and that this should not detract from them.
In fact, only a very low percentage of ideas become true innovations, while the rest will go to the garbage dump or to the basket of ideas that must be hatched because their time has not come. In the end, the innovation is a numbers game, where "you have to kiss many frogs to find a princess."
Promote a culture of innovation
Even if your company has the best innovation process in the world, it will not work if you do not develop a culture of innovation that supports it. The innovation process and culture are like the yin and yang of innovation. Because in the end, companies do not innovate, it is people who innovate, and innovation, by its nature, involves exploring unknown waters, which has an implicit risk. If you don't have a culture that encourages entrepreneurship, experimentation and taking intelligent risks, your collaborators will never do anything very innovative. This is why the fundamental question I ask to know if a company has an innovative culture is:What happens here when someone makes a mistake? The answer I hear is that failure is punished very strongly in most organizations and that is why staff prefer to do the same as always, that is, perpetuate the status quo instead of trying to do different things.
In this sense, innovating is like walking a tightrope, since it takes enormous courage to think and act differently within organizations. However, there is a great reward for those who dare to take their ideas to the other end of the rope and turn them into innovations. For this reason passion and perseverance are two of the fundamental elements in any culture of innovation.
Define innovation metrics
If at the end of the day innovation doesn't rattle the cash register and we can't take it to the bank, then we're not innovating. This is why it is very important to define metrics that allow evaluating whether innovation efforts are paying off. One can define input, process and output metrics. For example, as input metrics one can define the percentage of collaborators who have been trained in innovation or the number of clients who have been interviewed to detect innovation opportunities. As process metrics, one can measure the number of ideas generated per employee per year or the average time it takes to evaluate an idea. Finally, as output metrics one can measure the percentage of ideas implemented,the average dollars produced by each implemented idea or the average time it takes to launch an idea to the market (“time to market”). There are many metrics that an organization can use to evaluate its innovation efforts, the important thing is that they provide relevant information to improve the performance of its innovation program.
conclusion
We must stop thinking that innovation is something esoteric, abstract and difficult to implement. The processes, tools and practices already exist so that companies can innovate systematically and make innovation part of the work of each of their collaborators. The only thing you have to have to innovate is the will to put it into practice.
