Learning from the big guns

Sales, marketing and manufacturing are relatively easy to measure and define. Not so innovation. And it is this difficulty of trying to manage such as ‘intangible’ that makes it hard for companies to introduce an innovation culture. Yet many of the companies perceived as innovative have not always been that way. Industry giants like Procter & Gamble and Borg Warner were forced to innovate in times of crisis. Simon Spencer, Borg Warner’s early champion of innovation, said: “Our attitude had been ‘You can’t organise the innovation process.’ The new Borg Warner said: ‘We have processes for everything else – why not for innovation?’” It is one example cited in ‘Inside the Innovation Elite’ – an online training course from management consultancy BMG that unpicks the innovation process and gives advice on its implementation – using examples from industry leaders such as 3M, BMW and John Deere. “A big misconception about innovation is that it’s only about new products,” says Robert Tucker, the course presenter and president of consultancy The Innovation Resource. “Many ‘innovative’ new product introductions fail because the rest of the company is following ‘business as usual’ procedures.” Process and strategic Next to product innovation, there are two other types: process innovation, which generally focuses on back office operations that cut cost rather than add revenue; and strategic innovation, such as added value services. A good example of the latter comes from Apple: while its iPod is held up as a shining example of product innovation, its success also depends on the parallel development of iTunes – a strategic innovation. In process innovation, two mechanics at American Airlines helped save nearly £200,000 per year by re-conditioning drill bits instead of throwing them away. This illustrates another important principle: that innovation and ideas can come from everywhere. Innovation policy is orchestrated at senior level, but raw ideas must come from across the business. When he took over at P&G, CEO AE Lafley said: “We depended on our 8,000 engineers and scientists for innovation. The new P&G asks all 100,000 employees to be innovators.” The company overcame a ‘not invented here’ syndrome to welcome external ideas – with the most recent example being its UK tie-up with Nesta . For its part, BMG is trying to bridge the gap between ‘needing’ innovation – and putting it into practice. “We’re trying to make innovation a structured, repeatable process,” says Scott McAllister, business development manager for BMG in Europe. Robert Tucker points out that the need for innovation is simply to be more successful. “A growing number of firms realise that they have a process for everything except innovation,” says Tucker. “Many see it can be used it to drive growth, fight commoditisation and compete globally.” FIVE ‘BEST PRACTICE’ RULES FOR INNOVATION Drive from the top Innovation should be a company-wide process, and not simply one priority but the top priority. Top team to establish innovation goals. Systematic processes Innovation needs to be ‘embedded’ in an organisation. Strategic innovation will become more important as it is harder to copy than product innovation Mine the future Searching for threats and opportunities, identifying trends and using unconventional ways of finding a customer’s unmet needs moves you from reactive to proactive, and defence to attack Fortify your idea factories See the process as a factory: as well as ‘input’ (ideas), there is also ‘throughput’ (execution) and ‘output’ (products and services). If it works, concepts “whizz forth like widgets on a production line.” Cultivate culture Encouraging prudent risk-taking, and rewarding entrepreneurial activity – even in failure – fosters innovation. “Behaviour that gets rewarded gets repeated.”