Pushing the Frontiers

Conduct your own technological research

New developments in science have always pushed the frontiers of knowledge and created opportunities for innovation. Use the Internet or "knowledge brokers" to help cast the search net widely. With nearly $1 trillion being spent every year on R&D around the world, the problem is less one of knowledge creation than one of tapping into existing research.

Conduct your own technological research--creating new knowledge--or tap into research being done elsewhere, such as at universities or research institutes. Working with other organizations will help you share the costs and risks.

ACTION POINT: Make research a personal and organizational discipline.

Article 8.1 Customer Satisfaction

We will measure our success in three broad categories. They are customer satisfaction, technological achievement and financial performance.

Customer satisfaction will be judged by factors such as:

• Shipping and fill rates
• Percentage of back orders
• Market share growth
• Customer retention
• Credit and return data

ACTION POINT: Satisfy customers in the above categories and measure their retention.

Looking for Ideas

Innovation can be triggered by many different pressures, and to manage it effectively you must have mechanisms to pick up on these pressures.

The first stage in practical innovation is gathering ideas for new projects. Innovation can be triggered by many different pressures, and to manage it effectively you must have mechanisms to pick up on these pressures. These can come from within your organization or the wider world.

Ideas can be searched for in the following ways:

• Explore existing technology to find opportunity.
• Research the potential market for your product.
• Investigate your competition and learn from them.
• Loot at threats and opportunities for your business.
• Use stakeholder's ideas for new perspectives.

ACTION POINT: Look inside and outside of your organization for new ideas.

Learning From Mistakes

This failure in terms of the original product provided the impetus for what is now a billion dollar product platform for the company.

Sometimes great ideas come from mistake and apparent failures. 3M's Post-it notes began when a polymer chemist mixed an experimental batch of adhesive that turned out to be quite weak. This failure in terms of the original product provided the impetus for what is now a billion dollar product platform for the company.

In the late 1980's, scientists working for Pfizer began testing compound UK-92480 for the treatment of angina. Although it showed little benefit in clinical trails on humans, the team pursued an interesting side effect that led to UK-92480 becoming the drug Viagra.

ACTION POINT: Learn from mistakes.

Reviewing the System

Not every new idea finds a home...

When you have gotten as far as a working model, or a prototype of the new service or process, you need to make sure people will actually adopt it. Not every new idea finds a home, and the challenge at this stage in the process is making sure you can get sufficient uptake to make a difference.

If you are really going to make this an innovation system -- one that delivers a steady stream of new products, processes, and services--you need to make sure you learn from your mistakes and modify the system so you can do it better the next time.

ACTION POINT: Look for the lessons in the mistakes you make in the innovation process.

Implementing Ideas

This is all about project management, but against a background of uncertainty.

Next, you have the challenge of implementing the innovation possibility-- to make the new product or service come alive, to bring the new way of doing things into shape. This is all about project management, but against a background of uncertainty.

You won't know whether you can actually make the technology work, or if there will be a market for your new product or service, until you try to make it happen. So you need a structure that allows you to monitor progress, and if necessary, stop projects before they go too far ahead.

ACTION POINT: Include monitoring as part of the structure of your innovation process.

Article 8. Vision

We are going to be one the most successful corporations in our industry.

Our vision is our dream. We should follow our hopes and dreams. We must know what we want to accomplish before we can conceptualize our vision. What would be your top desire relative to a business entity? What would be your top goal relative to your position in our company?

There would be many different answers, but we could certainly agree upon "to be successful" if we understand what this statement really means. Success or being successful, is a title that requires a positive contribution to others. Think of any successful person or business and you should be able to quickly name the positive contribution to people or society. Be it manufacturing, services, medicine, science, etc. Success must then be recognized as a demanding honor. It is not acquired once for all time. It often leaves as quickly as it arrives. Success is not a permanent achievement, but always a worthwhile goal. A goal that can be accomplished by anyone in any position, or any business venture in any industry.

We accept this challenge as our primary vision. We are going to be one the most successful corporations in our industry. We are going to obtain the image in our marketplace as one of the most positive contributors in our industry, in turn benefiting greatly our employees, our customers, and our vendors.

We will measure success in three broad categories. They are customer satisfaction, technological achievement, and financial performance. Each category will be inspected using industry standards or self imposed goals.

ACTION POINT: Strive for success personally and for your business.

Finding and Selecting Ideas

"Of all the things we could do, what are we going to do, and why?"

The journey starts with a trigger signal -- a bright idea, a customer need, catching up with a competitor. Whatever the stimulus, the challenge in managing your innovation process at this stage is to make sure you have in place ways of searching for and picking up the signals.

But you can't do everything -- you need to be able to answer the question: "Of all the things we could do, what are we going to do, and why?" You need to select -- to make choices based on where you are trying to get to as an organization and how the proposed innovation might help you get there.

ACTION POINT: Build a road map for the journey. Mapping out how you will take the idea ahead helps identify potential problems and who or what else you will need to help deal with them.

Making Innovation Happen

You can look at innovation as a journey: from the spark of a new idea to seeing that idea realized in the form of a new product, service, or work flow.

Innovation is more than a great idea -- innovation succeeds only when you put that idea into action. The innovative manager needs the ability to find and select good ideas, put them into operation, and persuade users to adopt them.

You can look at innovation as a journey: from the spark of a new idea to seeing that idea realized in the form of a new product, service, or work flow. You could get lucky with it once, but if you are going to repeat it, you need to put in place a systematic process to make it happen consistently.

ACTION POINT: Make innovation a systematic process.

A Sample Stage Gate Model

Does it make business sense?

Rolling out innovative changes in stages with key decision points along the way allows you to check course and adjust direction as needed. A sample stage gate model would include:

1. Initial Trigger - An idea for a new product or service appears. Should it be explored further?
2. Concept Definition - Information sought on technology, markets. Does it make business sense?
3. Feasibility Studies - Market surveys are conducted. Should it enter full-scale development?
4. Design Development - Prototype developed. Should it enter full-scale production?
5. Deciding to Launch - Final Go-ahead for mainstream manufacturing and marketing.

ACTION POINT: Examine proposed innovations through the Stage Gate model above.

Using Stage-Gate Reviews

Instead of making a one-time decision at the start, this "stage-gate" approach sets up a series of decisions points,

A widely used approach, originally developed by Robert Cooper, a Canadian professor, is to introduce strategic decision points at various stages in the process. Instead of making a one-time decision at the start, this "stage-gate" approach sets up a series of decisions points, each tougher than the last.

Key questions are asked at each stage, and only if the answers are met does the gate open so that resources flow to support the next stage of development.

ACTION POINT: Consider rolling out strategic initiatives in stages.

Article 7.9 Profitability

Therefore, it has the right and the responsibility to make a fair return.

An unprofitable corporation does nobody good, not society, not its employees, not itself; Therefore, it has the right and the responsibility to make a fair return.

The use of our profitability will be for re-investment in our company, return to its valued employees, and to support charities.

ACTION POINT: Pursue profitability at every level.

Making Real Time Decisions

To make a decision and then commit all of your resources to it without having the option of changing plans midway is risky.

Innovation is about uncertainty, and so the ability to review and change your decisions over time is crucial. To make a decision and then commit all of your resources to it without having the option of changing plans midway is risky. The longer a project goes on, the more resources are put at risk if it fails.

Smart organizations know that turning an idea into reality is a learning process. As you move through the project you discover new things about the technology, about the market you thought existed, about your competitors. So it makes sense to view the journey in stages, and to increase resources allocated at each stage , from outline concept through to the eventual launch of the product.

ACTION POINT: Recognize that there will be things you must learn along the way toward any innovative change.

Building a Good Business Case

Who wants it, why do they need it, and why don't they have it yet?

A good business case is necessary for promoting any new idea. Some features of a good business case include:

• Outline your idea - A short and simple explanation of your idea -- how it is new and what it will do. Remember it is not what you think but how "they" see it, so try and present it in terms of what it will do for them.
• Market Analysis - Who is it targeted at? Who wants it, why do they need it, and why don't they have it yet? How big is the market? Is it growing, declining, or static?
• Competitors - Who else is out thee, what do they offer, how will this idea get ahead of them, how might they react, and how do you protect yourself from that?
• Why it will work - What do you know, and what prior knowledge, skills, experience, and networks can you bring to the table?
• Rewards - What will you get if you succeed -- money, market share, customer satisfaction -- and how long will you have to wait until you get them?
• Costs - How much will it cost, and what do you need to make it happen?
• Risk Factors - What might pose problems and how will you get around them?
• Project Management - Who will take this forward and how? What reassurances can you offer that you can do it?

ACTION POINT: Use the features above to build a business case for innovation projects.

Covering all the Angles

Decisions will not get made on the basis of personality and passion alone...

Making a compelling business case is at the heart of innovation. Decisions will not get made on the basis of personality and passion alone -- you need to be able to convince decision-makers to spend resources on a project that will work.

Is there a market, will the technology work, can you protect the idea, what will it cost, and what are the likely benefits? Showing that you have thought the project through and have answers to any difficult questions they might throw at you will enhance your chances off a successful pitch.

ACTION POINT: Understand the business case for any innovation being considered.

Gaining Support

Do you have the answers to questions they might ask you?

Organizations need to innovate, but they cannot do everything. They need to explore options and then make tough decisions about which ideas they will back and why. You can influence these decisions to your advantage -- if you know your organization is trying to put together a portfolio of projects that balance risk and reward, you can try and make them include yours in the mix.

But you need to present your idea in such a way that its merits are clear. Ask yourself how you can engage them -- can you show them a prototype so they can add their comments? Do you have the answers to questions they might ask you? And do you come across as being passionate about the projects -- will they believe in you?

ACTION POINT: Examine innovation projects to determine their merit and benefit to the organization.

Article 7.8 Technology

Our people must value this competitive edge.

Technological superiority has always been a high value for FSG. The lighting industry is made up of a wide range of technological based applications. The effective development and application of technology is and has been central to the success of our company.

The effective use requires sound research efforts and quality training programs. Our people must value this competitive edge.

We will strive to achieve and maintain a competitive technological position across our diverse industry.

ACTION POINT: Look for and embrace technologies that will sustain a competitive advantage.

Promoting Ideas for Change

you need to put together a compelling business case to convince others that your idea has practical potential.

Unless you are a top manager in your organization, chances are that you will need to "sell" your ideas for change at some point. Maybe you are an entrepreneur pitching an idea to a promotional investor, or you have a great idea about how to make things work more efficiently in your organization. In either case, you will need support if your idea is to become a reality.

Whatever the starting point, the destination will be the same: you need to convince someone else that your idea is great and that it will work and that they will get their investment (of time and money) back. And they need to believe in you and your capacity to deliver all of this. The problem is that you believing in your idea is unlikely to be enough -- you need to put together a compelling business case to convince others that your idea has practical potential.

ACTION POINT: Practice selling your idea to others, inviting critical comments and suggestions for how to improve it. Anticipating the big questions before you make the pitch to decision-makers will help ensure your message gets across.

Gaining an Overview

The more resources a project requires, the larger its corresponding circle on the chart.

It is useful to develop an overview of your portfolio not just in terms of the risks and rewards, but also in terms of how much you are allocating to each project. This can be done by using a bubble chart, which is generated by plotting your projects as circles on a graph against potential risk and potential reward.

The more resources a project requires, the larger its corresponding circle on the chart. This chart gives you an instant view of what resources are allocated to what levels of risk and reward. It can show you immediately if you have too many resources tied up in risky projects that are unlikely to succeed in the end. Equally, you can see if you are putting too much investment in a safe bet that is unlikely to generate significant rewards.

ACTION POINT: Scrutinize all innovation projects equally and fairly. Do not start up a project just because one individual wants it to happen.

Building a Strategic Portfolio

the risk of failure must be balanced with the rewards of success.

All but the smallest organizations are likely to want to include more than one innovation project in their strategy. While a decision matrix helps you compare projects, you also need diversity in your innovation portfolio. Portfolio management helps you to achieve this.

For a balanced portfolio you need a mix of decision criteria: the risk of failure must be balanced with the rewards of success. This requires analysis of potential obstacles against potential benefits In general, as safe innovation will be based on what your company does well.

More risky innovations are radical in nature. While the risks of such innovations are greater, the potential rewards are also significantly more attractive. You may decide to back a couple of high-risk projects if they are small because they could move you to a new game -- and if they fail only a small amount of resources will be wasted -- but it would be foolish to base all your hopes of progress on risky ventures that may never work out.

ACTION POINT: Aim for balance in your strategic portfolio so you have a mixture of probable success and more risky -- but potentially more profitable -- experiments.

Formulating a Decision Matrix

how feasible do you think it would be to implement it?

The decision matrix allows you to give objective scores to each innovation option, to help you make better decisions about which will be most beneficial for your business. The matrix itself can be drawn as a simple table.

List the options that are competing for strategic support (A,B,C) along the X-axis, then list the key checks along the Y-axis. Key checks can include such factors as: Does the idea fit with what you already know (your competence base)? Does it fit your overall business strategy? And how feasible do you think it would be to implement it?

A checklist for a decision matrix would include:

• Have you established a definitive list of the options competing for strategic support?
• Do you have a list of key checks that must be applied to each option, and do the key checks cover all aspects of the innovation's potential benefits?
• Have you considered all potential costs that you might incur as you pursue this innovation?
• Are some factors more important than others? Have you weighted them appropriately?
• What other disruptive factors could your ideas face in the future?

ACTION POINT: Balance risk and reward across several different criteria when making innovation decisions.

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