Innovation interview: Paul Sloane
We continue our guest blogger series on idea management, process efficiency and high-impact innovation with Paul Sloane, author of “The Innovative Leader: How to Inspire Your Team and Drive Creativity.”
1. Being an innovative company means different things to different people – how do you define “innovation” and what common thread or threads link the world’s most innovative companies? How can those threads be replicated?
Innovation quite simply is the implementation of something new. So an innovation can be successful or a failure. It can be useful or useless.
Obviously companies are looking for significant innovations that add value, appeal to customers and provide competitive advantage. The truly innovative companies plan for innovation, set goals for innovation, allocate resources for innovation, train for innovation and measure their results. They deliberately create a leadership environment that develops the culture and processes that foster innovation. It becomes part of the DNA of the company.
There are many ways to do this but they all start with leaders who commit to changing the culture and processes of the business.
2. When managing an innovation-related budget within a company, how should the cost be managed (departmentally, or culture-wide, etc.)?
Innovation budgets can be allocated by department or held centrally. The central approach allows major projects to be monitored but there is a risk that they can be over-controlled. Empowering departments with their own budgets is good provided the money does not disappear on other things.
3. In “The Innovative Leader” you say the first step to take in improving creativity and innovation is to have a vision for change. Who should be involved in creating the vision, and how should it be communicated? How do you then embed that into company culture?
I recommend that the leadership team should create the vision and then test it on a group of staff members before going public with it. In fact I am running a workshop to do just this with a major pharmaceutical company next week.
The vision should be inspiring, aspirational, motivational, credible and concise. The leaders then should develop an action plan to make the vision real – to translate it into something meaningful for each department and each individual.
Everyone should buy in to the vision and see how they fit in. This is a major communications challenge and needs constant reinforcement.
4. You have written, “The innovative leader encourages a culture of experimentation. You must teach people that each failure is a step along the road to success. To be truly agile, you must give people the freedom to innovate, the freedom to experiment, the freedom to succeed. That means you must give them the freedom to fail too.” Too much failure can spell disaster, especially if expectations from management are high at the outset. How do successful companies create a structure that balances experimentation with results measurement, and what are the key metrics that should be considered when evaluating that success?
Obviously no one wants failure but it is an inevitable part of the innovation process.
Successful companies allocate budgets for experimentation and measure their pipeline rigorously. They expect to lose money on the many projects that fail but they know that it is a numbers game. I liken it to a venture capitalist investing in, say, 20 start-up companies in the expectation that 15 will fail, 3 will break even and 2 will succeed. But a big success can pay back the total investment. If every prototype succeeds then you are not being adventurous enough!
Successful companies use metrics that measure the number of ideas generated, initially approved and then the number getting through each stage of the stage-gate process through the pipeline. Most will not tell you their exact figures, but 50 good initial approved ideas for every one successful product launch is not unusual.
5. At first blush, the idea of putting structure around creativity is somewhat paradoxical. But you assert it can be done, and if it’s done well a properly managed flow of creativity from many channels will inform new thinking around old, and repeated, problems. What steps can an organization take to funnel its creativity in a short time, and how are those steps different from a prolonged, system-wide culture of creativity?
There is a need for a clear structure for creativity and innovation. You define the challenges. You use methods to generate many creative ideas. You select the best. You develop prototypes and test them rigorously. You kill the weakest projects and invest in the winners.
All of this can be developed into a culture and methodology. A good ideas management system is an important starting point. Leading innovative companies like Proctor and Gamble, Reckitt Benckiser, 3M and Nokia have well-oiled machines that process hundreds of new product ideas through their pipelines and generate many successful new products. The paradox is that you have to be light and loose in considering all sorts of creative notions at the front end but disciplined and rigorous in managing the ones that make it into the pipe.