Driving Innovation

The US Patent and Trademark Office describes innovation as “…a word that touches every facet of our everyday culture from business to science and even the arts. Innovation is often associated with creating new things or ideas and includes improving upon old ones too. Businesses around the world have a great need to continuously innovate to stay competitive in the global marketplace and to bring consumers the latest and greatest products and services. But innovation is not defined by just a single event or even a single brilliant idea. Innovation is truly about a process, a series of steps that begins with human imagination and creativity and results in the creation of something of value for society to enjoy.”*

 Much has been written about innovation, but there is no clarity with respect to many aspects. How do we measure the ROI of ‘coming up with’ and ‘implementing’ a particular innovation?

Companies need a consistent way to determine which ideas or initiatives to invest in and which to pass on. Typically, they use some sort of financial forecasting to help guide this decision, but this thinking is often flawed as these models are filled with assumptions and you really do not know all the ways a breakthrough idea will impact the marketplace. There is no way to model out. Your best bet is to understand how an idea enhances customer experience. If your innovation results in the improvement of any customer experience, then you very likely have a winner on your hands. The Experience Delta (the difference between a present experience and a new one resulting from an innovation) is the currency by which you should view the impact of every new idea. If you cannot clearly articulate the Experience Delta, then you are not likely to be successful in your innovation efforts.

How can companies foster a healthy innovation biome? How can they choose the right set of actions to sustain it?

Innovation starts with leadership. If the leadership of an organization visibly demonstrates that innovation is a priority, that everyone is encouraged to innovate, that the company is willing to continually try new things, and not be deterred by failure, then you can develop a culture that lets you produce one great hit after another. Think of the most innovative companies. Every single one of them has had far more failures than successes, far more misses than hits. But the leaders of these organizations have instilled a culture where risk-taking and trying new things is encouraged.