We recently ran a workshop with business leaders that explored the approach to take when developing innovations and innovative organisations. Our reflections have been captured subsequently in three previous blogs that detail how the workshop came about, that define what innovation is and the key innovation challenges for leaders, and the realities of how innovation is actually experienced in organisations.
The fourth and final blog in this series explores the innovation process and reveals some key insights to the way innovation is managed in small and medium-sized organisations (SMEs). During the day participants were invited to map their “innovation funnel” and develop criteria that would be used to assess ideas as they progressed through particular stages or “gates” during the innovation process. This blog highlights some key observations as leaders progressed through these activities.
“Everyone brings their ideas to me and then…I make a decision!”
Was said by one leader and the group asked, whether they were the exception or more like the rule?
Research and experience of working with many entrepreneurs over time, suggests it is the latter. However, that’s not always for lack of trying. One story was shared about an attempt by the founder and principal of Regency College, to create a board of Directors however, although it was understood that power was not evenly distributed this was not sufficiently addressed and ultimately there was still one decision maker as highlighted above.
Of course an ultimate decision maker, is inherently biased, holds certain values and is predisposed to attend to certain things, from a certain perspective. This can only limit the choice making process. So what can be done? At an individual level it means having the self-awareness to recognise ones limitations and preferences, for the team it requires working with innovation at a group level, and for the system it necessitates creating methods to examine, scrutinise and hold account the organisations decisions and decision makers.
As these developments occur, innovation starts becoming a more strategic process. Methods for idea generation, evaluation and execution become developed and held by more people, with greater perspective. This process can be then aligned with the organisation’s strategic aims. Leaders can ask what is needed, over time, for the organisation to innovate successfully and what can be developed to make this a robust and effective process.
All of this becomes a consideration at board level, the question being not just; do we innovate? But rather:
- in what ways are we innovating, successfully?
- what demonstrates this success, and how could we improve this process?
- what do we need to take into account and do to develop innovative capability in the longer term?And these questions, become significant in developing a culture in the organisation of strategic curiosity, and innovative practice. They begin to inform frame and scrutinise the innovation process which as the workshop highlighted was always present, if often not fully understood and explicit.
“We don’t have a process…wait, let me draw it!”
As part of exploring the innovation process participants were invited to draw their “innovation funnel”, from concept through to reality. The Innovation funnel is a well-known approach that allows individuals within organisations to capture the way ideas, that will include developments in products, services and processes, currently enter the organisation, and the stages through which these ideas progress through to implementation. This approach provides a necessary visibility for ideas, and helps to define the decision “gates” through which ideas have to pass to make progress.
As participants were invited to depict their innovation funnel on a white board and explain their imagery there was a brief silence, and a comment of “we don’t have a process!” A debate ensued and there was a reluctance to share. Many did not have a formal process, something explicit or written down. Instead, the informality around the innovation process was acknowledged, and the tacit nature of this knowledge “it’s in our heads”. Soon, though, four volunteers stepped forward, drew and shared their innovation process.
Six key insights to the way innovation is experienced in SMEs
The presentations revealed six key insights to the way innovation is experienced in SMEs:
- The innovation process reflects the (combined) personality and approach of the senior leader(s) and the context of the organisation. A software company was found to regimentally track and continuously review improvements for their product. This iterative process responded to consumer insights, and decisions were integrated strategically. Other leaders presented a bigger picture, an image of what they believed the innovation process to be, or an aspiration of what the innovation process could be, with less detail. Innovation here responded to the influence of the leader’s approach and the competitive context of the organisation.
- A well-articulated and formalised process for innovation is valuable, and focusing on improving a current product/service line can lead to a level of myopia towards broader opportunities for innovation. Once they had drawn their innovation funnels, the leader of the software company shared how their existing innovation process focussed on iterative improvements to processes. However, it was later acknowledged that the processes surrounding product/service innovation were less formalised, and more reactive, and this is something they recognised as challenging to the future success of the organisation.
- Innovation requires a whole systems approach. The need to appreciate innovation as a broader system of interactions between processes and people was reinforced by one consultancy firm that relied on freelancers for the delivery of work. As the leader drew her organisation’s innovation process it began to dawn on her that freelancers, that operated beyond the traditional organisational “boundary” were not involved nearly early enough in the innovation process, or during the implementation phase. For innovation to occur successfully in this organisation, the leader acknowledged that she needed to be clearer on who was important to the innovation process, whether within or beyond the organisation.
- Gaining awareness of the level of resources required to deliver a successful innovation. A not-for-profit leader remarked how it typically “took years” to bring a new service to market because resources would need to be applied for at an early stage of innovation. In some cases, funding would be secured and in others in other cases it wouldn’t and innovations would stall, or fail.
- The role of the leader in the culture of innovation. A suggestion that “any idea is a good idea” demonstrated a notion of acceptance and encouragement on the one hand, with desperation and limited focus on the other. Overall, the desire for greater clarity by leaders in the group on the way ideas are fostered, assessed, and progressed spoke to a need to achieve greater consistency and fairness for others in the innovation process.
- Clarity on the criteria to assess ideas appeared essential to a healthy, strategic innovation process. Leaders spent time debating the questions to ask of new ideas, and whilst the criteria that formed varied by organisation, they shared common themes, broadly grouped under “technical” and “commercial” headings. This questioning approach brought level of formality and structure to the innovation process, and a feeling of confidence to the decision making process. Leaders felt better able to distinguish between ideas, and could explain the reasons for their assessment.
Overall, the leaders in this group behaved similarly to other groups and companies where innovation and new product/service development is highly informal and largely based on personal knowledge and instinct. However, the need for processes is relevant to all organisations, irrespective of their size. Through the workshop, participants started to appreciate how useful frameworks can be to help them manage the innovation process successfully.
The BIG Network provides a space for ambitious business owners to explore, challenge and resolve issues that are central to the sustainable success of their organisations. The Network is led by its members and is prefaced on openness and honesty, mutual respect and confidentiality.
For further information contact Dr Simon Raby on +44(0)1227 824740 or S.O.Raby@kent.ac.uk