Research suggests that to get the most out of innovation, you must apply very different success criteria. Applying traditional measures such as “rapid ROI” or “rapid growth” can strangle at birth the very seeds of an idea that might provide you with a lifeline in the future. Easily said but in truth not always easily achieved.
When AT&T set up their Worldnet group, who were tasked with developing Internet service offerings, the new team found themselves answering to senior management whose own traditional product sets essentially competed against those being developed by the Worldnet people. For example, voice over the Internet products clashed with the more traditional voice offerings. Not surprisingly there was little desire to sponsor and promote new ideas that would impact the revenues that probably formed a noticeable part of their reward package at the time and by applying the more traditional ROI models they had a sound basis for rejecting the proposals. Almost certainly the message they would have communicated would have focussed on the need to protect existing revenues.
So how do you manage innovation – what should your approach be? Here are three suggestions you may want to consider:
Spread your bets: always have a reasonable number of early stage initiatives on the go which need be no more than ideas with some structure around them which brings out their potential. From this evolving group a number will progress to the next stage where you may for example want to do some testing. Finally there should be a small number of high potential initiatives where most of your budget spend is targeted.
Cut some slack: as mentioned above don’t apply the same success criteria as you would to a project that was launching a new product or reorganising a department. Deviation from plan may not be a bad thing – although make sure everyone understands why. Remember you want people to be creative so don’t stifle their creativity.
Get people engaged: relationships with people outside the immediate team are critical and all too often too much energy is expended on dealing with the critics. Although the sceptics need to be given an opportunity to air their views, once that has been done make it clear that you do not expect any repeat performances. If the initiative goes ahead, make it clear that you require buy-in from all the stakeholders across the group.
Learn from the past: although innovation is all about creating the ideas that secure your future, if you do not learn from what has gone before you will reinvent the mistakes of the past. Review your successes as well as your failures and take key messages forward into the next innovation.