How To Innovate

This article offers a basic overview on “how to innovate”. Follow on posts will provide deeper insights into this topic.

A wise man once said that the only constant in life is change. Typically organizations resist change while those that are hugely successful embrace the new. These companies tap into the powerful energy of change to bring about Innovation.

The major cause for innovation failures and their percentage occurrences include:

  • Inadequate market analysis – 24%;
  • Product problems or defects – 16%;
  • Lack of effective marketing effort – 14%;
  • Higher costs than anticipated – 10%;
  • Competitive strength or reaction – 9%;
  • Poor timing of introduction – 8%; and
  • Technical or production problems – 6%.

In business “how to innovate” implies to create something new. Often it should be substantially different, not an insignificant change. The change should increase value, customer value, or organizational value. Innovations are intended to make someone better off, and the succession of many innovations grows the whole economy.

“How to Innovate” is about creating value to the innovator as well as the user. The term innovation may refer to both radical and incremental changes to products, processes or services. The often unspoken goal of innovation is to solve a problem.

Innovation solution may lie in the technology (product etc.) employed or it may lie in altering a business model (processes, value proposition, value chain, complete offering, services etc.).

Innovations fall into three camps, radical, semi-radical and incremental. Each have an associated risk level and usually correlated with a time frame. For example radical innovation may require a large amount on investment usually taking in excess of 18 months to develop.

Key success factors on “how to innovate” include:

  • Customer information and data.
  • Strong leadership on the innovation strategy & portfolio decisions
  • Integrate innovation into the company's basic business mentality
  • Align the amount and type of innovation to the company's business
  • Manage the natural tension between creativity & value capture
  • Neutralise organisational antibodies
  • Recognise that the basic unit of innovation is a network that includes people and knowledge inside and outside the organisation
  • Create the right metrics & rewards for innovation


The "How to Innovate" Process

“How to Innovate” does not just happen, business functions must consciously choose it as a key component of their strategy and invest to allow it to occur. An Innovation readiness assessment should be followed by the development of the Innovation strategy and identification of the key components, processes and opportunities.

The typical innovation process consists of the following sequence:

    1. Develop an innovation strategy leading to an innovation culture

    2. Prioritise innovation opportunities

    3. Allocate resources and create an innovation structure

    4. Implement systems and processes that enable innovation

    5. Implement an innovation process including stage gate reviews.  

        May be along the following lines:

  • Idea Generation 
  • Conceptualisation
  • Feasibility
  • Development
  • Scale-up
  • Implement / launch
  • Post-Launch

    6. Employ metrics to quantitatively measure innovation

    7. Employ a reward and recognition system

    8. Replicate learning to further the learning organisation

Benefits of Having a "How To Innovate" Process

Benefits include:

  • Provide a structure for managing innovation projects;
  • Add value and improve customer satisfaction;
  • Anticipate failures and avoid them;
  • Minimise design changes;
  • Reduce development cycle times; Reduce life cycle costs;
  • Reduce manufacturing cycle times and time to market;
  • Improve product quality, reliability, and durability;
  • Improve communication among functions, particularly sales and marketing, product development, and manufacturing; and
  • Reduce costs of after sale service and support.

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