Most people agree that perseverance and discipline are very important qualities for any entrepreneur or business leader. You need plenty of both to run and grow a business successfully. At the same time, most of us associate innovation with ideation and creativity, which is actually odd. Innovation essentially breaks down into two key activities: Invention and Scaling. It is absolutely no use scaling up a bad innovation, but not scaling up a big idea can also fail to deliver value. Invention is about foresight, ideas and creation. Scaling is about quality, speed and predictability; actually it’s about operational excellence in development & research. Successful innovators therefore treat innovation & product development as a systematic capability that can be repeated time and again. I do realize that this sounds a bit counter intuitive, but if you want sustained innovation success, you’d better start managing the development of your future business with the same rigor and discipline as you manage your current business.
Embedding customer-centric innovation
Systemizing innovation means embedding customer- centric innovation and product development processes that are first time right and fast. These processes will push out successful innovation with a higher degree of predictability and a higher correlation between input (ie R&D budget) and output (ie demand-led profit growth), driven by Innovation Excellence.
So how does a company shift from a random invention-driven approach to innovation based on a systematic scaling model? The Accenture High Performance Innovation model is specifically designed to systematically develop and select more valuable innovation projects and scale them faster with a higher rate of success. The Accenture High Performance Innovation Process defines three distinct phases. The 1st phase of Discovery is about systematically identifying the best growth opportunities for the company, to focus ideation and concept development in exactly the right place. Many companies lack a clear view on where and how they want to beat their competitors (knowing that it will be hard to beat them everywhere). But it’s a lot easier to build deep customer insight and market foresight if you have already identified the priority trends and growth markets relevant to your company. Working on that basis, you are far more likely to come up with the big ideas and develop successful innovation concepts. Successful innovators also allocate more time and resources to discovering, prioritizing and selecting the right ideas and innovation investments upfront in the innovation process. Competitive advantage in Innovation Discovery will result in fewer, bigger & better innovation ideas with higher value potential.
From Idea to Market launch
The second phase, Execution, covers the value chain from Idea to Market launch. Typical innovation execution problems include development reworking and waiting time. Reworking is necessary when innovation development work is not done well enough in the early development stages and has to be re-done at a later stage . This is often due to poorly defined development specifications or simply by the innovation idea’s lack of granularity. Waiting time occurs when critical development resources are overbooked. This is often due to companies running far too many (too small) innovation projects at any given moment. This multitude of innovation projects puts high demands on scarce development resources. Our research indicates that planned utilization of developers should not exceed 2/3 of their working hours. The other 1/3 is required to absorb the fluctuations intrinsic to development work, and success. Development work can’t be planned, like administrative work, and if you try to do so work will pile up in front of the critical development resources, slowing down time to market by up to ten times. Competitive advantage in Innovation Execution will result in a higher success rate and faster time to market, while freeing up development resources for work on more important innovation growth opportunities.
Maximizing the value during its life cycle
The final phase, Operation, is about maximizing the value of the innovation during its entire life cycle. Most developers and innovation managers consider the 1st market launch to be the end of an innovation project. This is a huge missed opportunity. After an innovation has proven its potential in its launch market, there is huge value in a rapid penetration of all relevant markets (geographies, channels, segments, customers, etc.). Also, you can probably reduce the cost base of the innovation as it scales and matures. Finally, if the innovation does what it is supposed to do, that is capture demand growth, it will attract me-too competition. The first mover advantage might last for as little as a few months, maybe a few years. You need competitive Innovation to develop new versions and new generations ahead of the competition. So competitive advantage in Innovation Operation will secure sustained market share and profitability from your innovation.
Successful innovation companies excel in each area: Discovery, Execution and Operation of Innovation. If you fail in one, you either scale poor inventions or you don’t capture the value of your big ideas and foresight. By approaching innovation from an operational excellence angle, on the other hand, you certainly give yourself the best chances for success.