One of my favorite questions to ask clients is, “What does the term ‘innovation’ mean to your organization?”
Over the years I’ve gotten used to the quizzical looks I get in response, but when it becomes clear it’s not a rhetorical question, it has led to very valuable discussions. My general observation is that most organizations don’t really know what innovation means to them, leading to confusion and misalignment of resources and goals, which severely limits the chances of successfully innovating.
Because you can’t measure what you can’t define, failure to align on an organization-specific definition of “innovation” is the single biggest innovation-related mistake I’ve seen clients make.
It’s Not as Easy as It Sounds
If you’re like me and you’re into instant gratification, your knee-jerk response is to let Webster’s do the work for you. But be warned, defining innovation is not that easy (but let’s take a look anyway).
The dictionary defines innovation as: “The act or process of introducing new ideas, devices, or methods.” As you can see, this definition isn’t helpful at all if you’re tasked with launching the next iPhone. Ironically, however, it isn’t far from the responses I typically hear from clients when I press them to define innovation. But to succeed commercially, your definition needs to be much more specific, and it needs to tie to your organization’s business strategy.
For example, if your organization has developed a tiered innovation strategy (generally viewed as best practice because it balances risk across a broad time horizon), make sure you define what innovation is for each tier. Something like this works well:
|Tier||In this time horizon…||…we will launch…||…such as…|
|Lower Risk Innovation||Within a year||Close in line extensions||New flavors/colors/sizes of existing products/brands.|
|Medium Risk Innovation||One to three years||Adjacent line extensions||New forms of existing products/brands.|
|Higher Risk Innovation||Three to five years||New-to-the-world products||Completely new technologies/ products/categories under new or existing brands.|
The biggest benefit to using this simple framework is that it brings clarity to the innovation efforts of any organization. Because it links risk profile to the appropriate time horizon, it naturally keeps the innovation pipeline full (an organization that uses this method should regularly review its pipeline to make sure all three tiers have active projects).
More important, the framework helps focus organizational resources on common goals. Done correctly, it eliminates confusion by prioritizing projects. When you ask your team, “What does innovation mean to us,” a consistent answer means everyone knows the end goal they’re trying to reach, which leads to much higher success.
Additionally, defining innovation forces a discussion about what’s realistic and should align with your organization’s broader business strategy. While some organizations don’t consider close in line extensions as particularly innovative, others view it a necessary part of their new product development cycle because it keeps consumers engaged in the category, keeps the brand fresh, or helps defend valuable shelf space at retail.
In short, there’s no ‘one size fits all’ definition. Work with key stakeholders in the organization (cross functional representation is recommended) to find what works best for you.
A Mini-Case Study: A First Step to Success
In a senior-level client meeting (Directors and Vice Presidents representing marketing, sales, operations, and finance), I asked attendees to write down their definition of innovation. If you’ve been paying attention, the result shouldn’t surprise you. I asked everyone to read their responses, and it quickly became painfully clear that there seemed to be a limitless number of ways to define it.
But through the confusion came a clarifying moment: If this senior team didn’t have a clear view of innovation, imagine how exponentially more confusing it had to be to the broader organization.
On that day, we used a workshop approach to create an organization-specific definition that became the foundation for all innovation efforts going forward. While other innovation-related changes were implemented (new stage gate process, metrics for success, etc.), all agreed that defining innovation was the necessary first step toward the path of more innovation success.
The lesson learned: Defining “innovation” is time well spent because it sets a stake in the ground; something against which progress (and success) can be measured.