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Creating Value from Chaos: Defining and Encouraging Innovation

1375251_600129090029481_1666320026_n.jpg Think about a company like Apple and you probably think, accurately or not, about innovation. We're always waiting for the next big thing. The new. The unusual. The useful. The latest innovation.

"Innovation" is as big of a buzzword as "big data" — and just as hard to define. Blame it on the very nature of innovation: to innovate means to create change, which, by necessity, implies breaking rules, making mistakes and upsetting the status quo. So how do you define change … and, more importantly, why should you bother?

Canyons of Manhattan/Photo by Asa Aarons

Encouraging Innovation

You can't look at a conference agenda without stumbling on something related to innovation. Go ahead. Glance at the bios of the keynote speakers at Eloqua Experience North America in San Francisco this week. Or scan our coverage from FutureM in Boston or the DEMO 2013 Conference in Santa Clara, CA last week.

All of them focus on new ideas, methods and products … on doing things differently, uniquely, innovatively. " Innovation," as business consultant Tom Peters so appropriately explains, "is a messy business."

It doesn't often fit neatly among the objectives employees develop as part of their annual performance reviews — and only a small number of companies officially allow employees to set aside time to innovate during their normal workdays.

In fact, innovation often happens in the process of doing something else. "Around here, we try things first, fix 'em fast, try again, talk about it later, when we've got something to talk about," Peters writes.

The big question: What exactly does a company that encourages innovation want to accomplish — and how does it want to reach its objectives? Is innovation more than a buzzword?

Hard to Define

There is no standard definition for innovation, even though many corporate executives describe it as a key corporate value. However, one of the broadest definitions is "A change in a product offering, service, business model or operations that significantly improves the experience of a large number of stakeholders."

"Innovation, unlike audits or reengineering, is not given to systems, formulas and blueprints," noted Mitchell Ditkoff, co-founder and president of Idea Champions, a management consulting and training company. It is given to people — restless, inspired, fascinated individuals with an almost cellular need to change. And while it can be supported by systems, it can never be reduced to systems.

Because innovation is chaotic, unplanned and serendipitous, companies should be careful about how much order, discipline and oversight to impose on individuals who bring urgency and initiative, warned Michael Schrage, a research fellow at MIT Sloan School's Center for Digital Business, and the author of "Serious Play" and "Who Do You Want Your Customers to Become?" He thinks innovative organizations need to be innovative about how they innovate.

Rewarding Out-of-the-Box Thinking

His suggestion: Senior management should quietly recognize and reward informal and bootleg efforts that unambiguously contribute to positive outcomes. Encourage intrapreneurs and project teams to identify the one non-compliant or outside-of-the-box informal innovation effort that worked best for them. "Don't think of informal innovation as inappropriate or illegal. Treat it as undocumented," Schrage suggests.

Any tools, technologies, techniques or toys that let people improve how they play with uncertainty improved the quality of innovation. And he adds, “The ability to align those improvements cost-effectively with the needs of customers, clients and markets dramatically boosts the odds for competitive success."

Gifford Pinchot, author of "Intrapreneuring," defines intrapreneurs as in-house entrepreneurs. They're the "dreamers who do" in a corporation, and can increase the speed and cost-effectiveness of technology transfer from R&D to the marketplace.

 

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