Innovation, Yes! But How?

Innovation. Everywhere you turn there is another article espousing its benefits, its challenges and the recommendation that everyone everywhere needs to do more of it in business. From business books to mainstream magazines, trade publications, and even blogs – the amount of innovation talk is overwhelming.

Add to this the enormous number of companies that have taken on taglines that point to innovation, either directly or indirectly - from GE to Motorola, Siemens and so many more it is hard to count and harder yet to separate their advertising from one another.

But what is troublesome to me is that with all of this talk about innovation, nobody is talking about “how” to innovate. Instead, they simply blather on about how important it is, how it is driving their business strategy, how it is changing business dynamics, providing more value, beating the competition and so on.

Enter the innovation consultants. Following (or perhaps leading) this trend are innovation consultants who appear to mainly be tilted toward helping companies with the softer side of culture building. But in my experience, it is the more technical side of innovation that challenges companies more fervently and is where the real innovation work needs to begin. It is these product and service barriers that are standing prominently in the way of true market-changing breakthrough.

Creativity + Structure = Innovation Success
Gone are the days of neon colored walls and pinball machines in the cafeteria, all designed to foster a more “creative” environment. Perhaps these spiffs engendered employees to feel they worked for a “cool” company – but at the end of the day, most of these programs just created new ways to spend investors’ money. If a company really seeks to drive stronger innovation, they need to dig deep and implement reliable, predictable and replicable approaches to innovation inside their business.

This demands a new approach—or at least an approach that’s new to most of us. To be reliable, predictable and scaleable (another word for replicable), we need to follow the same rules we follow for other areas where we expect to see success. In other words…. we need a process and a methodology for innovation.

In a recent edition of Business Week Online, GE CEO Jeffrey Immelt said “I look at Six Sigma as a foundation on which you can build more innovation.” Right on, I say. We need more structure to innovation, without sacrificing the necessary soft side – just like Six Sigma brought structure to quality improvement in the same way.

Immelt would agree that Six Sigma works best when it’s deployed through a structure and under conditions that build improvement culture along with improvement skills. It appears he’s also saying that Six Sigma is a great stepping stone or springboard for Structured Innovation.

Putting the Necessary Structure Behind Innovation
I recently co-authored a book entitled, “Insourcing Innovation.” The premise of the book is that the achievement of continuous innovation is dependent upon certain “critical Xs,” as we say in the Six Sigma world. It is my opinion that it is never enough to simply state that you have a goal of innovation. You have to define the chain of causation that enables you to achieve your goal.

So what is the critical X that can make innovation happen at your company? Why do so many say they value innovation yet don’t have systems in place to drive, manage, achieve and control it?

Insourcing Innovation answers these questions and lays out a roadmap for making innovation commonplace in organizations. The book’s title points to the basic problem and the basic solution today: companies need to develop their own innovative capabilities and systems (insource innovation), rather than do what too many do now, which is outsource innovation to third parties or even third world countries.

Outsourcing innovation takes on many forms. One form is hiring a consulting firm like McKinsey to “think out of the box” for you and write a new business strategy. Or you could outsource the full spectrum of new product design and implementation to a firm that operates much the same way Accenture operates in the IT arena: full service at full prices. Or you could hire an individual consultant to come up with a creative solution to a specific problem you’re facing.

But if all the voices of modern business, from GE’s Jeff Immelt to Proctor & Gamble’s A.G. Lafley, are right, the ability to innovate can’t remain just an area of expertise, like accounting or engineering or IT. The innovation process has to become a core competency for every individual and every company, and it has to span the entirety of the value chain, not just one department.

If this sounds nebulous to you it is. The truth is there is simply no way to become inherently “more innovative” without structure, which again takes us back to a need for a process or methodology.

The Key – Finding a Model For Structured Innovation
Here’s the good news: an effective model to follow has already been developed. It’s called Six Sigma. While the principles of process improvement have been around for more than 50 years, not until about the last 20 have they touched everyone. Six Sigma is not relegated to one department and, in successful companies, world-class quality practices are a core component of the way they do business.

Initially considered a process improvement methodology for the manufacturing sector, today Six Sigma is applied across all industries, from healthcare to financial services to the travel sector. And in many companies, Six Sigma is deemed as the best path to operational excellence, and a prerequisite for promotion into senior management.

Strangely enough, the global community has converged on a finite set of productivity and quality methods but is still regressed when it comes to innovation. But the truth is that innovation drives growth and profitability. So then, what companies need to do to put the “how” behind innovation – is put a systematic innovation engine into place that lives inside your organization. This engine should be built on a structure that is similar to the five-phased DMAIC (Define, Measure, Analyze, Improve, Control) approach to Six Sigma. Doing this will allow you to integrate systematic innovation with your other corporate competencies, measure your innovative capability, connect innovation practice to strategy, monitor and gauge your progress and give you a much improved competitive advantage – especially if you already execute quality and performance improvement on a systematic basis in other ways across the organization.

My company, Breakthrough Management Group specializes in helping organizations put these sorts of initiatives into place. For more information, I encourage you to review our book Insourcing Innovation (link to http://www.amazon.com/Insourcing-Innovation-Transform-Business-Exceptional/dp/0976901005/sr=8-1/qid=1159203143/ref=pd_bbs_1/104-9199844-3042362?ie=UTF8&s=books) , available at Amazon.com or to contact us at 1-800-467-4462 or at www.bmgi.com.

Excerpted from Insourcing Innovation, copyright 2005 Breakthrough Performance Press

In Insourcing Innovation, Silverstein talks about the process of using Innovation to turn “business as usual into business as exceptional.” This graphic depicts the result companies achieve when they interrupt innovation inertia by putting a structured process into place for driving innovation throughout the organization: