Innovation: Fashionable AND relevant?
Innovation is a fashionable thing inside today’s companies.
It is also irrelevant.
Every company feels acutely the need to innovate, yet innovation as a core competence remains largely irrelevant because leaders can’t prove results.
The collection of ideas does not lead inexorably to higher sales or fatter margins, so senior leaders support innovation conceptually, but not always materially. They recognize the need for innovation is huge if they wish to stay successful in a constantly changing, globally competitive world. But they are grappling with the allocation of actual resources to fund and staff innovation programs. Why? Because the clear line to business value is not obvious.
This problem was never more apparent than during Imaginatik’s market research for Results Engine, a new software product for systematically managing and tracking the innovation outcomes of all ideas.
When we asked companies, “How do you track what happens to ideas?” most answered, “We don’t.” This seems like a glaring omission. But there’s a good reason why, and it cuts to the heart of innovation’s relevancy (or lack thereof).
Within most corporate innovation programs, promising ideas are collected and vetted, then transitioned to line managers or project teams for further exploration and eventual launch. Because these project teams are often widely distributed across the organization, the corporate innovation team must follow up one-by-one with line managers to track results. In larger companies with innovation programs across business units or even continents, this follow-up is prohibitively slow and time-consuming.
In corporate finance, companies combine accounting standards with a central software system to track the use of all funds. This allows for centralized planning and reporting. Corporate innovation, by contrast, has no corresponding system (or standards) for tracking and managing how the organization uses its ideas.
Over the years we’ve seen innovation begin to grow into a core discipline for many organizations, just like finance or marketing. It is fashionable today to believe that innovation is the next great management discipline. But to earn a permanent place in the corporate pantheon, innovation must still prove its relevancy to the business.