#242 from R&D
InnovatorVolume 5, Number 10
by Guy A. Hale
Hale is chairman of Alamo Learning Systems, in San Ramon,
California (phone 800-829-8081),
providing a workshop for corporate innovation, called
Innovators. He is
author of The Leader’s
Edge (Irwin Professional Publishing, Illinois, 1996).
Even under the
best of circumstances, staying competitive today is more difficult
than ever before. Why?
Because the conditions that determine competitive
advantages change at an unparalleled speed.
Today’s hot product is tomorrow’s flop; the secure,
stable market of yesterday is racked by technological advances and
increased competition. Examples
of the “rise-and-fall” nature of today’s environment are
everywhere with small start-ups rapidly rising to great heights,
and large multinationals going through massive layoffs.
The Key to Competitiveness
The cold truth
today is that a company can hold its competitive edge and stay
ahead of change only through innovation.
Innovative companies are those that keep their collective
eyes and ears open to change and opportunity, and respond with
ideas and action that keep them growing and profitable.
compete through innovation know that new (or borrowed) ideas apply
not only to products, but also quality, productivity, service,
financial discipline, employee attitudes and renewal.
All are critical elements in a company’s competitive
Categories of Innovation
categories of innovation contribute to the competitive strength of
an organization. On
one level are continuous
conceived and implemented by an individual or small group to make
their job easier, better or more productive.
Examples of these small-scale innovations include an
improved form, a simplified ordering system, a slightly readjusted
At the other
level are organizational
impactful changes that involve different functions and levels
within the company. Organizational
innovations vary widely in scope, but in all cases require
commitment and cooperation from management, supervisors and
to note, as does Tom Peters in Thriving
On Chaos, that continuous improvements and organizational
innovations have a synergistic relationship:
“The reality is
an unlimited number—of innovation/improvement opportunities lie
within any factory, distribution center, store or operations
center. And you can
multiply that by more millions when you can involve the factory
and distribution center working together as a team.
And multiply again when you add in involvement in
innovation by suppliers and customers.”
The first goal of
executives seeking to build competitive innovation is an
organizational climate that encourages, supports and rewards
innovative effort. Climate
emanates from the very top of the organization, and must be
carried out at every level of management.
The challenge is
to erase the common fear of being punished for “rocking the
must say and show, through incentives, rewards and recognition,
that the organization needs and will listen to the ideas of all
its people. Adding a
sense of urgency—making innovation a key to the company’s
security and growth—can help emphasize the organization’s
commitment to new ideas.
Company achieved success when it gave a cross-section of employees
the charge of designing a new car—one that would set Ford apart
from its competition in customer appeal, yet be practical to build
with quality. The
result: the Taurus,
Sable and Thunderbird, a successful line of popular, distinctive
employees, dealers and suppliers knew the climate was ripe for
the Innovation Process
within an organization—is not magic.
Peter Drucker has called it “hard, focused, purposeful
work.” The company
that competes through innovation is one that has made the process
of innovation a part of its daily operation.
anecdotes do little to clarify this process or provide a model
that other executives can use in their own organizations.
However, by looking deeper into the success stories and
working with innovative companies, we have identified five key
activities that any company must develop to compete through
innovation. The key
to following these activities is to focus on areas most in need of
improvement, and then to seek innovative ways to foster an
innovation is proactive. Instead
of waiting for threats to make innovation a necessity (by which
time it’s often too late), your organization can set up systems
to scan for innovation opportunities.
though important, will not by itself make a company truly
innovative. Many of
the most important innovation opportunities are found by
individuals who are closely tied to the products and customers.
Most employees have a pretty good idea what can be improved
at their jobs, and can learn—given the right climate and
training—to recognize innovation opportunities in the changes,
successes, surprises, mistakes, customer inquiries, and other
events around them every day.
Focus and Direction
every idea is a winner, nor does every good idea meet the needs
and objectives of the organization.
Determining the general direction for innovative efforts,
therefore, enables a company to quickly concentrate on those
opportunities most likely to make it more competitive.
Some of the important aspects of establishing focus and
communicating goals and objectives.
what type of innovations are not sought, so efforts can focus exclusively on
the goals at hand.
limits or constraints—so employees can be realistic in their
includes that mysterious aspect of innovation: creativity. Creativity,
is not, as some believe, synonymous with innovation, but it is a
critical element of the innovation process.
generating worthwhile ideas isn’t the exclusive realm of
“creative types.” Anyone
can participate in the exercise of generating ideas for
innovation, both at the individual and group levels.
The important responsibility of management, however, is to
provide the time, resources and direction needed for people to be
Analysis and Implementation
A flood of ideas
isn’t, by itself, innovation.
The organization must ensure that these ideas are captured,
analyzed and, if deemed valuable, brought to reality.
A first step, and
a real resource saver, is for the idea-generation team to refine
its ideas and develop recommended solutions.
Just as importantly, managers who receive ideas must
analyze them objectively, rather than reject or accept them based
on subjective biases (e.g. a marketing executive shouldn’t be
partial to a marketing-based solution unless it’s truly the best
organizations use project-management techniques—with adequate
resources and personnel—to guide an idea to implementation.
These techniques permit repeated assessment of the idea and
help ensure that the innovation meets its “window of
critical to the success of any organizational innovation.
But support isn’t limited to the tangibles of money,
personnel, space and equipment; innovation requires philosophical
support as well. Executives
must be committed to the principle that their company must change,
must innovate, if it is to remain competitive in today’s
changing business environment.
innovation works against what has been called the “Corporate
Swamp”—that tendency of an organization to squash or ignore
ideas that threaten the status quo.
At each phase of
innovation, different roles become central to the support process:
the inventor is the individual (or group) who finds the opportunity or
generates the idea. Inventors,
however, are often not qualified to sell the idea through the
the role of the champion, who can gather input and build backing for the proposal in
other parts of the organization.
Champions possess advocacy skills to effectively “sell”
promising ideas to key individuals within the company.
Those individuals who become allies of the champion are
innovation supporters. Finally, in the case of the most are-reaching innovations, a sponsor
from upper management is often essential to ensure that resources
and attention are devoted to developing the idea.
It’s not enough
to wait for others to act, each manager must accept responsibility
to initiate the process of innovation.
Gather data on what must be changed in order to stimulate
establish priorities and outline actions to build the innovative
process in your organization.
It’s not a
simple challenge, and innovation is by no means a simple process.
It will require managers courageous enough to begin making
their organizations effective, innovative competitors.