Few organizations truly understand the strategic and operational commitment required to
obtain ongoing value from innovation. This research examines five of the most common
myths surrounding innovation.
Key Findings
Many firms are confused about innovation — what it is, what it can do and whether it
can or should be formally managed.
Recommendations
Create an imperative for innovation and establish the explicit link to revenue growth,
operational restructuring or business model change.
Define processes and metrics to encourage innovation that extends beyond the
boundary of a centralized innovation or R&D organization.
Recognize the diverse roles required to sustain innovation and reward people for
performing them.
Cultivate the capability for continuous innovation to grow and transform the business
and to stay aware of external threats and opportunities.
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TABLE OF CONTENTS
Analysis ....................................................................................................................................... 3
1.0 The Quest for Innovation ............................................................................................ 3
2.0 Innovation Myths May Threaten the Best Plans .......................................................... 3
2.1 Myth No. 1: Innovation Just Happens ............................................................ 4
2.2 Myth No. 2: Innovation Only Happens in R&D ............................................... 5
2.3 Myth No. 3: The Best Innovation Comes From Inside .................................... 7
2.3.1 Collaborative Open Innovation ....................................................... 7
2.3.2 Idea Marketplaces .......................................................................... 8
2.4 Myth No. 4: The More Ideas We Generate, the Better ................................... 9
2.5 Myth No. 5: We Have Lots of Smart People, so Innovating Will Be No
Problem ............................................................................................................ 10
3.0 The Bottom Line of innovation .................................................................................. 11
Recommended Reading ............................................................................................................. 11
LIST OF FIGURES
Increase the success rate and speed of new product, process and service development.
This model is invoked by an organization only after its business focus is defined. This innovation
process model is applicable for many different types of innovation including product, service,
process, and business model or strategy. The model should be customized to suit the culture and
overcome the political or other obstacles of the organization. For a full description and guidelines
for focusing innovation and customizing this model, see "Managing Innovation: A Primer, 2009
Update."
Though innovation activities will be highly individualized based upon each company's culture,
business environment and strategic needs, there is a common thread: The better organizations
understand the activities of the innovation process, the more effective they become at bringing
the kind of innovation to the marketplace that will sustain corporate growth.
Enterprises will find that the major factor that impacts innovation in the early stages of the
process is a culture of trust that can accommodate managed risk. In the later stages of the
innovation process, the greater impact is, in fact, a well-managed process that ensures the right
people are involved, funding is available and milestones are met.
Action item: Adapt Gartner's innovation process model to make it specific to the focus and
objectives of your organization. Use it as a part of the innovation education process to ensure that
all participants in innovation projects have a consistent vocabulary and set of expectations.
Action item: Identify the factors that have the greatest impact on innovation in your organization,
both the cultural factors and processes that will improve innovation initiatives. When a deficiency
is detected, take steps to shore it up. For example, if your organization has trouble getting
employees to contribute ideas, design a recognition program that rewards them for sharing their
expertise.
Technology is also a source of innovation and in recent years, many enterprises invested in
technology tools that support improved work practices and collaboration among employees and
across value networks. These organizations have created team workspaces and purchased
collaboration, content management and social software solutions. They have also experimented
with tools for modeling and simulation — all in an effort to increase productivity.
As these technologies and products mature, organizations often reach the inherent productivity
limits of the tools. Thus, organizations need to shift their innovation emphasis toward
improvements in processes and integrating individual tools into a cohesive work environment.
They need to explore ways to get more revenue from existing products by tapping into new
techniques for product line extensions plus marketing and communication approaches that
include social media. This dimension of innovation is depicted by the yellow shape labeled "new
go-to-market approach" on Figure 2.
Smart organizations will also not limit their search for good ideas to the marketing department but
instead will call upon a wide internal network of employees for suggestions. Oftentimes, the
people responsible for business process execution have valuable insight about how those
An idea seeker posts a challenge on InnoCentive.com (such as, "Please provide data
and evidence to support the identity of the common efficacy of three compounds").
Challenge solvers vet solutions and respond to InnoCentive, which then forwards
solutions to the idea seeker.
The idea seeker reviews submissions and selects the solution that best meets the
requirements. InnoCentive issues an award to the solver.
InnoCentive launched in 2001 and quickly signed up more than 70,000 scientists (challenge
solvers) from around the world that get paid bounties for solutions to challenges posted on the
site by idea seeker companies. Today, 200,000 engineers, scientists, inventors, business people,
and research organizations in more than 200 countries are invited to solve problems. Challenge
solvers may be paid up to $1 million for their solutions based on the value assigned by the idea
seeker. See "Idea Marketplaces: Access to a World of Innovation" and "The Business Impact of
Social Computing: Real-World Examples of Value Network Collaboration."
Action item: Identify innovation projects that are not meeting their project milestones. Evaluate
when they are candidates for an idea marketplace challenge.
Action item: Organizations that decide to open up the innovation process will need to rethink the
intellectual property (IP) governance model so it balances the need to protect the organization
from "IP leakage" with the need to reveal information in order to engage external participants.
One example comes from a publishing company that established an innovation program
led by an innovation council. It ran unfocused campaigns to collect "good ideas." After
an innovation council culled through the entries, it ended up discarding all but two of the
more than 680 ideas submitted — a hit rate of only 0.3%.
The events to garner ideas must be very focused on a specific business or technology
issue that excites people's passion, rather than a vague concept such as "decrease
expenses."
Rewards and recognition have to be built into the program for both the people that
submit the ideas and the people that enhance and improve them.
The review team must include subject matter experts who can properly evaluate ideas
on their merit without regard to personal gain or loss.
Those ideas selected for implementation must be rapidly moved into the pilot stage.
Connect: network with others to seek out new ideas and trends.
RECOMMENDED READING
"Managing Innovation: A Primer, 2009 Update"
"Idea Marketplaces: Access to a World of Innovation"
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