Innovation is the business topic du jour. The pursuits of Total Quality in the 1980s, Re-engineering in the 1990s, and Six Sigma in the 2000s have, in many cases, yielded impressive cost reductions, cycle-time reductions, and quality improvements. However, enlightened executives realize that they can't streamline their way to growth any more than an individual can "save himself rich." They understand that continuous gains in "how" an organization does business must be dovetailed with expanding the horizon of "what" business they are in.
Critical to growth in most sectors is some combination of launching winning new products/services, entering lucrative new markets, creating new competitive advantages, and deploying new business models. All of these quests require more than operational excellence. They demand innovation.
The process within an innovator's head has not been definitively decoded. However, the columns that support--or fail to support--an organization's pursuit of innovation are not a mystery.
The framework I use to audit innovation is the Enterprise Model, starting with the business. The business can be an entire corporation/agency, a business unit, a site, a division, or a department. Arrayed around it are the external entities that serve as its context and present its threats and opportunities: customers, suppliers, competitors, society, government, owners, and the economy. Inside are the nine variables that influence the degree to which the environment supports innovation.
Each of the following nine sections defines an innovation variable.
The innovation journey begins with strategy, which defines the field in which innovation plays. Strategy defines the size and shape of the business in the Enterprise Model and answers the questions:
* What existing and new products/ services will we offer and how much will we invest in each?
* What existing and new markets/ customer groups will we serve and how much will we invest in each?
* How will we win against our future competition?
Without answers to these and other strategic questions, innovation is unfocused. By pinpointing what the organization will not do, a solid strategy establishes innovation guardrails. More important, it provides a vision that inspires the types of innovation that will enable it to thrive.
For example, during strategy deliberations, the top team of a business unit within a plumbing products company decided to fuel growth by expanding the product...