Seven Signs Your Innovation System is Sustainable

Innovation renders other products and processes obsolete. Ironically, innovation systems themselves can suffer the same fate when they become static or lack ideation-implementation balance.   Mainly because we lose sight of the bigger picture and check that the innovation strategy supports the company’s current direction.

With the disturbing trend of innovation programs closing down after three or four years, setting up and maintaining a sustainable system is a major challenge for innovation managers.

What can you do to keep your innovation system performing as intended and delivering a return on investment in fresh ideas?

Applying strategic and systems thinking principles, here are seven signs to look for when giving your innovation system a regular health check, to keep the pipeline flowing and the outcomes coming.

Consider how these elements are interacting with and impacting on the whole system.

Monitoring and evaluation frameworks provide useful data for decision-making.

As organisational strategies change, innovation metrics should change too, so they continue to align with the corporate purpose and strategic objectives of the board and senior management team. What’s your process for reviewing and modifying M&E frameworks to ensure the innovation system remain relevant?

Regular and relevant injections of ideation.

Has your organisation (like many are wont to do) become locked into one or two ideation approaches as everyone becomes ‘comfortable’ with the program? Regularly reviewing how your company generates new ideas, and makes sure such ideas are adding value, is a smart move. Often, planning different ideation approaches for different time horizons or strategic priorities will result in improved outcomes.  We like to say that people support what they help create so customer and key supply chain partner engagement is critical for success. 

Well-oiled stage gates.

It’s common enough – once a stage gate process is locked in it’s rarely modified. When you’re reviewing an innovation system, ask ‘why is this information is required?’ This simple question will help you determine if the stage gate is still functioning. Check that it’s clear what each stage gate is doing, what data is required at that point, and who should be undertaking the assessment.

As innovation systems mature, we need to remember that healthy systems are open systems.  So, some proof of concept projects is interrelated with the activities of external collaborators, such as research centres or supply chain links. It is important that these new initiatives are mapped against your stage gates or that your stage gates are modified to enable R&D outcomes to link seamlessly with your system (i.e. we know this as open innovation).

Proof of Concept (POC) project designs are commercially focused.

POC projects are most effective when both technical and management people are involved (also known as multidisciplinary teams).  This ensures that the activities feed multi-dimensional data to the decision-makers. Do your project designers in this process understand commercialisation pathways and the complexity of turning ideas into outcomes that generate value for the organisation, as well as the technical possibilities? Well-designed projects don’t always result in successful projects but they do improve the chances.

Innovation upskilling is ongoing.

Organisations often introduce a lot of training at the start of an innovation program to build the culture needed to sustain it. Over time, however, staff and directors change; and while onboarding or handovers are helpful, the new people may not have the skills or experience to participate with confidence. Consider conducting refresher training programs as well introductory level sessions to keep the program energised with enthusiasm.  We like to call these booster shoots.

An interactive innovation champion network

The enthusiasm of your innovation champions (in your team or across the whole company) often depends on two things: how long the innovation system has been running and the number of wins they’ve enjoyed.   We love the saying that success has many parents, but failure is an orphan.

Do you have innovation champions in all departments who share their team’s efforts to motivate company-wide effort? What happens to the ‘corporate innovation knowledge’ when staff leave? What about when responsibilities for innovation are inherited by or handed over to staff members who are less engaged? Looking at the commitment of everyone in the innovation champion network helps you to see where the gaps and cracks might widen, because ensuring you have the right people powering the innovation system it crucial to its sustainability.

The innovation system supports the company’s current strategy.

Sustainable innovation systems adjust to align with corporate developments, not lag behind or drift off course. Taking a Systems Thinking approach to keeping your innovation system going strong means checking:

  1. Where do we want to be? (our ends, outcomes, purposes, goals, holistic vision)
  2. How will we know when we get there? (a quantifiable feedback system)
  3. Where are we now? (today’s issues and problems)
  4. How do we get there? (close the gap from C ➞ A holistically)
  5. What will/may change in this environment in the future?

Innovation programs can be renewed, reinvigorated, or redesigned without starting from scratch. Plan for continuous system innovation and improvement rather than succumb to obsolescence.

Inheriting an Innovation System – surviving the first three months

You’ve been appointed as the new Innovation Manager. You put your hand up for the role, did your research, impressed them at the interview and now you’re keen to roll out your ideas to ‘stamp your mark’ on the organisation. You’re going to make innovation a key driver of major impact. It’s an exciting time for you and the company.  I’m finally on that “fast track”…

Then you start the job and discover the obstacles. This is not going as you had planned. The “system” you’ve inherited is broken. Maybe it never got up and running before you arrived. You’ve got your first board report due and the expectation is that you’ve got this in hand.

And you do. You’ve got a new plan based on taking these steps with your Systems Thinking cap on.

Step 1. Revise the Strategy by re-prioritising: keep, kill & add

Make this the main outcome of your first three months. Since the innovation system was first created there’s probably been significant changes in organisational strategy, possibly the senior management team, and the external operating environment too.

Lack of alignment with organisational strategy is a common cause of innovation system collapse. Never forget that innovation exists to serve the business.  Don’t be the tail trying to wag the dog.  Now’s the critical time to review all assumptions, processes, roles and budgets associated with the innovation program.

In Systems Thinking, we see the most successful businesses behaving as open systems where the whole is primary and the parts are secondary. Innovation is just one of those parts.  So, look at the bigger picture and check that the innovation strategy supports the company’s current direction:

  1. Where do we want to be? (our ends, outcomes, purposes, goals, holistic vision)
  2. How will we know when we get there? (a quantifiable feedback system tracking progress)
  3. Where are we now? (today’s issues and problems to be addressed)
  4. How do we get there? (close the gap from C ➞ A holistically by prioritising high leverage initiatives)
  5. What will/may change in this environment in the future? (On-going and systemic scanning)

Step 2. Innovation leaders understand the team and organisational culture.

Have you heard of Organisational Development trailblazer Herbert A. Shepard’s Rule #4 for managing change? It says innovation requires a good idea, initiative, and a few friends. Not much can be accomplished alone, so find the people who are ready and able to work, introduce them to one another, and work with them.  We like to say that organisational change happens one person at a time.

The enthusiasm of the team (your innovation champions or the whole company) often depends on two things: how long the innovation system has been running (not long usually equals high enthusiasm) or the number of wins they’ve enjoyed.

It’s important to understand why the team is involved, how each person’s position fits into the innovation program (full time or part time), what their experiences have been, and what their vision is for innovation within the organisation.

Understanding how roles and personalities are interacting with the current innovation system will help you identify where some of the problems are originating and if better communication or training related to innovation will make a difference.  Techniques like Root Cause Analysis can be very useful for gaining insight into the critical issues that lie below the surface of observed behaviours (e.g. iceberg theory of change).  It is critical to include a customer centric perspective when considering any change.

If you’re fortunate to have an innovation champion network within the organisation, check if these mini-system drivers have been refreshed recently and if not, ask “why not?”.  We encourage “booster shots” (e.g. celebrations, rewards, recognition, etc) because they are necessary to sustain changes made over the long term.  In larger innovation systems the engagement metrics help you get a feel for how different business units engage with the innovation team and process. If you don’t have this information, plan to start building it. Tip: avoid the easy staff survey option because you’ll probably only get responses from the converted rather than understanding the concerns about innovation across the organisation (i.e. the 87% of the iceberg that lies below the surface).

Step 3. Review the ideation and stage gate processes.

Some organisations can’t strike a balance between ideation and implementation. The pipeline flows to no one knows where or dries up for want of regular maintenance (e.g. booster shots to overcome the natural corporate immunity to change). If the company’s strategy and management have changed since the innovation system was first introduced, you’re likely to find stagnant pools and rusty mechanisms when you look for them. It’s your job to turn the taps back on in the right places with the correct pressure.  Some people call this maintaining dynamic equilibrium or the “goldilocks zone”.  Not too disruption that you cause chaos, but not too conservative that nothing ever changes.

Step 4. Review current projects.

Because you’re new, you can evaluate current projects objectively and provide the clarity that those working on them may have lost. It is often quite easy to categories your innovation project portfolio into; Stars, Zombies & Vampires.  You’ll need to make the assessment criteria clear to everyone involved. There’s nothing like killing a project to spoil your honeymoon period when the implementation team can’t understand your rationale.  But keeping the zombies & vampires can’t be good for anyone.

And that’s why it’s equally vital to review the importance of each project to the organisation. Often validation projects that have been going for more than 12 months may no longer be relevant but the team’s investment shouldn’t be disregarded. If it’s a case of another company launching a similar product first, there might still be something to salvage by examining validation data for another potential purpose. In some cases, existing products on the market might actually be cheaper to adopt than developing an in-house solution.

Step 5. Review and revise monitoring and evaluation processes.

Many innovation systems lack a robust monitoring and evaluation (M&E) matrix with associated KPIs or methods for collecting data. When there are no metrics to report, senior management and boards can’t acknowledge the return on innovation investment. They can’t then make informed decisions about allocating more resources to innovation.

If the figures are not ‘adding up’, it could just be the M&E process; or it could mean the problems lurk elsewhere. When you review your inherited M&E process, focus on the relevance of the KPIs and associated metrics to the question asked earlier; Where do you want to be?  As well as the cost effectiveness of data collection. This will help you find where the system is not delivering and why it might be under performing.

Making Progress

It’s unlikely you’re expected to produce miracles in your first three months but you will be expected to have made some progress. These five steps will help you get started. If you focus on understanding the system and looking for opportunities to improve it, you’ll find ways to stamp your mark and introduce your new ideas at the right time. Just perpetuating existing processes is rarely a viable option. Even innovation programs need regular innovation!

Often, re-designing the program with a Systems Thinking approach will you get up to speed faster than trying to repair a broken or malfunctioning asset. This because a key premise of the approach is to focus on outcomes that serve the customer (both internal and external) as the primary purpose of the organisation. It also means you can build in the elements that will support overall performance now and future sustainability.

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