Innovation Framework

A core framework underlying the assessment process are the six core innovation questions listed below.  (Click on each label for a detailed explanation).

Why

Why

The simple question “Why innovate?” leads us to examine the strategic nature of innovation. We know innovation is a strategic necessity, because the purpose of innovation is to ensure that your organization survives, and the evidence overwhelmingly shows that any organization that doesn’t innovate probably won’t stay in business for long. Hence, the innovation process should be aligned with the organization’s strategy, and innovation should be a key factor that defines how the strategy will be realized. The relationship between strategy and innovation, and the condition that they are enabling and driving each other, is an essential cornerstone of the Innovation360 Framework. The why questions cover whether the organization aims for profit or growth. In the case of NGOs and NPOs, profit can be interpreted as utilization, for example citizen/member advantage or usage. The why questions also address the degree to which the organization focuses on small, incremental improvements or radical innovation, whether the organization is pursuing both at the same time.

What

What

When we ask the question “what to innovate,” we recognize that the unpredictable nature of change requires us to prepare for many types of innovation options for a wide range of possible futures. Therefore we use the typology introduced by Trott (2008) to gain greater specificity about the kind of innovation that is applied. The seven types of innovation are the following:

  1. Product Innovation: the development of a new or improved product.
  2. Process Innovation: the development of a new process, for instance a manufacturing process, talent-management process or supply process; typically driven by digitalization, automatization, robotics, artificial intelligence, and new man-machine interfaces such as tablets and smartphones that can be integrated in managing and optimizing processes.
  3. Organizational Innovation: a new venture division, a new innovation center, internal communication system, and introduction of a new accounting procedure are some examples.
  4. Management Innovation: examples include TQM (total quality management) systems, BPR (business processes reengineering) and Agile Development for software engineering.
  5. Production Innovation: quality circles, just-in-time (JIT) manufacturing systems, new production-planning software as well as new, more advanced and technology-related areas such as Industrial Internet of Things (IIoT) used to connect machines to each other as well as to producers, operators, and even customers.
  6. Commercial/Marketing Innovation: can be new financing arrangements, new sales possibilities, pricing models with low-entry process levels, market approaches (e.g., direct marketing); this can also be referred to as business-model innovation, meaning the development of new or improved business models and value propositions.
  7. Service Innovation: examples include Internet-based financial services (typically referred to as FinTech), user-experience-based service innovation using new interfaces like virtual reality and augmented reality.

By linking why with what, we delineate the strategic rationale of the innovation-management work within the organization.

How

How

In the Innovation Framework, we divide how into four components: Leadership, Capabilities, Personas, and the Innovation Process. The leadership styles in the Innovation Framework are based on the work of Loewe, Williamson, and Wood (2001), who describe five types of leadership such as the following:

  1. The Cauldron: an entrepreneurial style where the business model is frequently challenged.
  2. The Spiral Staircase: a style where you climb upward without losing the overall goal.
  3. The Fertile Field: a style where the organization tries to use existing capabilities and resources in a new way.
  4. The Pac-Man: a style where you invent, outsource, and finance startups.
  5. The Explorer: a style where you explore possibilities and invest time and money in them without demanding short-term profit.

The Innovation Personas in the Innovation Framework is based on the Ten Faces of Innovation described in the work of Kelly and Littman. Kelly and Littman divide the ten personas into three categories: learning personas, organizational personas, and building personas. The learning personas are individuals digging for new sources and knowledge; the organizational personas are the ones structuring, challenging, and orchestrating the work; the building personas are typically the intellectual architects, the storytellers, and the caregivers, as well as the ones setting up a proper environment. The ten Innovation Personas are as follows:

  1. Persona: The Anthropologist (Learning)
  2. Persona: Cross-Pollinator (Learning)
  3. Persona: Experimenter (Learning)
  4. Persona: Hurdler (Organizational)
  5. Persona: Director (Organizational)
  6. Persona: Collaborator (Organizational)
  7. Persona: Experience Architect (Building)
  8. Persona: Set Designer (Building)
  9. Persona: Storyteller (Building)
  10. Persona: Caregiver (Building)

The sixty-six capabilities in the Innovation Framework are organized into sixteen aspects to simplify the analysis, all decribed in the Wheel of Innovation®. The Innovation process, consisting of the phases ideation, project selection, and commercialization.

Where

Where

An innovation process is realized through the tools and infrastructure that support it and the people who are involved in the process. Today’s innovators need to determine whether their innovation processes will be purely internal or will take some form of open innovation, where stakeholders external to the company or organization are involved in the process. These decisions will determine the innovation infrastructure provided by the company as well as three related elements such as the following:

  • The type of innovation (e.g., open innovation, engaging people internally and externally)
  • Collaborative platforms to support agile and fast value creation
  • The physical workplace (where people are engaged and motivated)

When

When

The simple answer here is “All the time!” However, every activity in a business needs to be assessed to fully understand its impact, and this is especially the case for creative work such as innovation. It is imperative to fully understand what is driving value and to measure the work effort and the end results in order to optimize the outcome of the innovation work. In the Innovation Framework, we therefore assume that innovation will take place constantly and at a high pace and that it will be guided and monitored by metrics and coached for value and results.

Who

Who

The one innovation refers to all people participating, internally and externally, in leaving ideas all the way to testing them, prototyping, developing to launching them. Typically, you organize people into innovation board, innovation task force, sponsors, project leaders and process owners.

Three Horizon Framework

The 3 horizon framework was originally developed by McKinsey and was published 20 years ago in the book The Alchemy of Growth.   It has become a sustainable model due to the insights and gudiance it provides when looking at a firms portfolio of innovation efforts and how they relate to susutainable growth for the enterprise.

3 horizons

Our assessment incorporates this model as we recommend best practices for assigning Innovative development projects across three horizons.

Horizon one covers immediate and incremental improvements that return measurable impacts and keep the IT infrastructure at peak performance.

Horizon two introduces workable concepts that offer the greatest promise for expansion or market capture, assuring revenue for the future.

The third horizon is the most creative and expansive, commercializing applications from the second horizon in original and unpredictable ways. Although these ideas present the most significant potential, it will take precise and intelligent deployment of technologies from the first two horizons to get there.

Innovation readiness analysis should concern itself just as much with internal processes as with external offerings. Your InnovationIQ score will indicate which areas could profit most from new approaches, both in terms of profitability and market share.

From there, you can go on to reimagine the interactions of your high-performance teams, as well as, test business prototyping sessions. There are many pathways that lead to streamlining workflows and ensuring stronger revenue streams. Initially, they all begin with an assessment to evaluate how ready you are now to seize new ideas and make them work.

Speed

High Speed

Key competencies:

  • Risk management
  • Business model Innovation
  • Customizations
  • Modularization

Key drivers:

  • High level of competition, disruption and shifting market logic.
  • Industrie 4.0 (read more here) including Internet of things

Low Speed

Key competencies:

  • Market knowledge
  • Governance and compliance

Key drivers:

  • Long production cycles
  • Market barriers
  • Regulations

Bandwidth

High bandwidth

Key competencies:

  • Active portfolio management
  • Brand knowledge
  • Modularization
  • A and B testing
  • Prototyping

Key drivers:

  • Uncertain market. Hard to predict trends.
  • Risk spreading.

Low bandwidth

Key competencies:

  • Market knowledge
  • Customer insights

Key drivers:

  • Short-term cash flow, no room for failure and no need for jackpot.
  • Expensive and inflexible production system, meaning you cannot easily adopt a new kind of production.

Risk vs Opportunity

Risk minimization

Key competencies:

  • Risk management capabilities, risk affection/attraction rather than risk aversion

Key drivers:

  • Optimization in a red ocean, i.e. sticking to what you have and trying to optimize with low short-term risk. However, this also implies long-term risk as you most likely will become outdated at some point.

Opportunity maximization

Key competencies:

  • Customer intimacy
  • Measurement
  • High-speed iterations

Key drivers:

  • Blue Ocean strategy initiatives means higher risk short-term but, if successful, a high margin and volume for a period of time.

Leadership Models

In the Innovation Framework, we divide how into four components: Leadership, Capabilities, Personas, and the Innovation Process. The leadership styles in the Innovation Framework are based on the work of Loewe, Williamson, and Wood (2001), who describe five types of leadership such as the following:

  1. The Cauldron: an entrepreneurial style where the business model is frequently challenged.
  2. The Spiral Staircase: a style where you climb upward without losing the overall goal.
  3. The Fertile Field: a style where the organization tries to use existing capabilities and resources in a new way.
  4. The Pac-Man: a style where you invent, outsource, and finance startups.
  5. The Explorer: a style where you explore possibilities and invest time and money in them without demanding short-term profit.

Copyright© 2017 Product Acuity Consulting - All Rights Reserved

 Powered by DyKIDo! from DooWooWoo, LLC.