Innovation portfolio — what is it all about in corporate landscape?
Innovation work is very much multi-disciplinary and extensive area to deal with. It’s hard to define precisely without confusion. We are messing with definition of creativity and innovation in many ways when working with something new. Therefore, many innovation initiatives have vague objectives, scope and expectations.
- Creativity is ability to produce or use new and unusual ideas.
- Innovation is implementation of creative ideas in an economic setting
When thinking about innovation in corporate landscape it’s crucial to identify how new innovations can solve company growth ambitions or create future relevance in the markets. It means that you must find ideas that have commercial scale at large. It doesn’t mean that incremental improvements to current products and services aren’t important. It’s must-have thing to stay on course, but products and services lifecycle is getting shorter every year, especially in technology industry. There is high probability that your product is being disrupted away even you keep it modern and invest in incremental improvements from one year to another.
Customer centricity is the way to keep innovation portfolio healthy
Customer centricity is very important aspect to make innovation portfolio tangible. Portfolio does balance between uncertainty and risk tolerance. Customer centric approach help you to validate market opportunities early and therefore lower the risk of your innovation portfolio. Idea experimentation with customers is concrete way see people’s real-world behavior towards the solution you are about to build.
Customer centric approach is also important way to figure out who is your future customer. It’s not necessary anyone who is your radar today. Key thing is to figure out if you are solving some real problem existing in this planet and how widely there are similar need among the potential customers. It’s actually one of the very first healthy indicators of your innovation portfolio.
Another important aspect is to understand our execution feasibility related to idea. Simply put: there is market existing, but why should we deal with this field?
Questions related to feasibility could be for example:
- Does it fit to our company strategy?
- Does it radically challenging our current priorities?
- Are we able to develop this idea with our current competences? Or what new competences are needed?
- Does needed technology existing today?
- Do we believe it’s possible to get solution out in the market at reasonable time and effort?
- Does it fit to our company operating model?
- Are we able to scale idea commercially large enough?
How to manage innovation process?
In order to get innovation portfolio in place you need organizational form, practices and processes in place to nurture innovations. Innovation process primarily focus is to provide guidance and decision making framework to allocate investments and development resources towards corporate strategy and priorities.
I have experienced couple of times back in the days that innovation function is given high autonomy to do whatever innovative stuff they like with given funding. That function has produced to great ideas, no question about it, but same time causing isolation from company strategy and operative business. In these circumstances, scaling your new business getting really hard when rest of the organization and operating model do not supporting your growth. Imagine situation when you have launch you service and there is eminent need to respond high demand in the market. It’s like building start-up of your own, but not able benefit marketing, sales and delivery scale that corporate could offering to you. Still you have corporate’s brand, reputation and client expectations to deal with.
Recently, me and my collages have been implementing model of innovation process that is highly de-centralized. Purpose for that is to make sure that model is aligned with business priorities and company growth ambitions while giving different businesses close to customer autonomy to make their own decisions about the future. Innovation function playing role of facilitating practices, tools and methods, but not owning any innovations. Common innovation system plays important role to gain visibility to portfolio for all company people. That is the way show by example which ideas are important for us right, whom to connect and how things are progressing.
Of course, this is just one way to make it happen. You should look at your company strategy and operating model carefully and consider that innovation process supporting those in best manner.
If you like bounce thoughts around innovation or customer insight topics, feel free to connect me in Linkedin.