The internal innovation capability is an ongoing journey as companies strive to continually improve performance. A practical model for assessing where an organization is in its journey and where improvements can be made is the Innovation Performance Framework™, which leverages four key components:
An innovation strategy provides the business’s innovation direction and focus to ensure alignment and support of the organization’s broader plans and goals. Portfolio management ensures that sufficient funding and human resources are provided to enable the strategy and that the pipeline of projects does reflect the innovation goals and priorities of the company. The idea-to-launch process (commonly called a Stage-Gate process) is the enabling component that provides the playbook for how the organization manages new product development from ideation to commercialization. Finally, organizational culture and leadership underpins and supports all innovation ambitions.
We also know that innovation success is not a one-time occurrence, but the result of an organization’s ability to conceive, develop and commercialize new products and services on a sustainable basis.
However, every business is at a different place or level of maturity in the innovation journey. Even business units or divisions within an organization can have differing levels of maturity and capability with respect to innovation. Also, the varying stages of maturity in each of these four critical drivers of innovation can also seriously impact an organization’s innovation capabilities and abilities to successfully drive new products from idea to launch. For example, a company may be able to create a very strong innovation strategy but have poor internal processes to enable it. Or, it has not developed a culture that matches the innovation direction that the leadership desires.
The first step in determining your organization’s level of innovation maturity is to measure where it is today with respect to the four components of the Innovation Performance Framework. This is achieved by addressing questions such as:
With a valid assessment of current capabilities, management can then determine what steps are needed to either move the organization forward to a higher level of innovation maturity or work to sustain current acceptable levels.
The varying stages of maturity in each of these four critical drivers of innovation can also seriously impact an organization’s innovation capabilities and abilities to successfully drive new products from idea to launch.
As an example, let’s take one component of the Innovation Performance Framework, the Idea-to-Launch process, and explore what it takes to reach a level of process maturity that provides management with the confidence that projects can be developed and commercialized successfully on a sustainable level. Ask questions such as:
Exhibit 1 shows benchmarking results that provide an excellent first step to answering these types of questions and assessing the maturity of your Idea-to-Launch process. The data represent the results from 211 companies in which innovation performance was evaluated using a composite score of three performance metrics: profitability versus R&D spending, performance against sales objectives, and performance against profit objectives.
To make a preliminary assessment of your company, take each of the six measures below and evaluate your organization’s capability. For each question, score your organization from one to ten, where a score of ten indicates that the practice is in place, working very well and producing the desired results. Then compare your score with the benchmark scores.
If you are scoring high on all six measures of idea-to-launch process capability your organization probably has a mature innovation process with well-internalized innovation capabilities.
Note, however, that the best performing companies are not satisfied with the status quo. They are applying continuous improvement mechanisms to this critical capability. They recognize there is always room for improvement and, as they learn from experience, they use these learning’s and reap the benefits. The winning companies continually update their processes to leverage more effective ways of working, improving efficiency by removing non-value-adding work or outdated methods, and introducing new techniques and tools. These types of organizations strive to raise the innovation performance bar each year to ensure they remain ahead of the competition.
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