What’s New in Innovation?

What's New in Innovation? Posted by Alice Kwan on October 7, 2011

Many of the executives I talk with are wrestling with how to establish a culture of innovation in their organizations. Driven by forces like M&A activity, the growing need to partner with others in and out of their industry and the ever-present pressure to increase efficiencies and cut costs, they want to know how to expand collaborative thinking and new idea generation beyond the traditional “innovation departments” like R&D and product development.

Companies often struggle with this because building innovation capability is a long-term strategy that takes time and determination, with results measured in future value. This can be at odds with and sometimes overshadowed by, the immediate need to hit growth and profit targets. The need for different kinds of innovation is a factor as well — the radical, blockbuster “big idea” vs. more tactical, incremental (and implementable) ideas that yield smaller, but still valuable, results.

In large companies, the search for the next big thing, say a new pharmaceutical drug or new technology device, is often handled by creating a separate business unit devoted to the effort. But to generate smaller innovations like process or product improvements, or for smaller organizations without separate “innovation” functions, the goal is to cultivate and harness the ideas of the collective employee group. So, what organizational levers do you push and pull to make that happen?

Our experience suggests that a number of strategic levers influence organizational culture and these can be oriented in ways that foster a culture of innovation. Some things to consider:

Leadership

  • Have you incorporated innovation-focused competencies into your leadership development program?
  • Have you tasked leaders to embody, communicate and promote the company’s commitment to innovation? Are there vehicles to communicate with employees about innovation and its role and importance?
  • Do your leaders understand how to stimulate and reward innovation within their teams?
  • Do leaders accept, expect and encourage learning from failure?
  • Do leaders stay informed of trends and ideas in their industry and others and pass this information on?

Processes & Technology

  • Do you have formalized processes to solicit, evaluate, develop, deliver and monitor new ideas?
  • Do your employees have the right information and resources to follow through on their ideas?
  • Do you have technology tools that promote capturing, sharing, vetting and prioritizing ideas?

Capabilities

  • Do people within the organization understand the competencies and behaviors that support innovation?
  • Do you encourage your people to challenge the status quo and pursue new trends and directions; do you look for these behaviors when making hiring decisions?
  • Are there goals, metrics and rewards around innovation?

Structure

  • Do your organizational structures enable or inhibit collaboration?
  • Are the various roles and responsibilities of executives, managers and staff designed to help discover, incubate and accelerate innovation?

We’re working with our clients to think through these levers and help them retool their organizations to develop more collaborative, innovative cultures. Has your organization made building innovation capacity an area of focus as well? If so, what steps have you taken to foster innovation? Are they bearing fruit?

I look forward to your comments.


Alice Kwan Alice Kwan principal, Deloitte Consulting LLP, leads the firm’s client talent services in the U.S. She regularly leads clients through large-scale transformations with a focus on organizational, cultural, change management and talent implications.

As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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