With most breakthrough ideas coming from start-ups, large corporations face increasing pressure to respond with innovation. However, for most, breakthrough innovation remains frustratingly elusive.  So how can you encourage innovation in your corporation?

Since innovation is a complex, company-wide endeavour, it requires a set of practices and processes to structure, organize and encourage it. Here, we highlight five ways which you can encourage innovation in your organization.

1. Create space for innovation

You need space to innovate, and I don’t mean physical space like an innovation lab. Although they can be important, just having physical space isn’t enough – you need strategic and portfolio space. Innovation needs to be an explicit part of corporate strategy, and therefore you need to create portfolio space for innovation within your company’s portfolio of products and services. It is imperative that you know what portfolio balance you want to achieve as a company.

You also need to create space for resources, finances and time – which means making resources available for projects and creating and protecting time for people to work on a project. You need to ensure that individuals are giving each project a significant amount of their time to support a culture that puts the innovation project success above all else.

2. Encourage risk taking

Innovation is inherently risky – getting the most out of your portfolio is about managing risk rather than trying to eliminate it. You want to encourage team members to take risks and think outside the box, but you need to manage that risk and uncertainty in an objective way, with judgements based on facts.

The most up-to-date risk analysis tools will use multiple criteria – technical and commercial – to give you an informed assessment. These assessments are combined with financial analytics to enable you to see which projects offer best return versus risk trade-off and help you manage and track specific risks and issues that affect a project. 

However, if a project is considered too risky and is killed, it is important for team members to understand that this is not a failure – the failure would have been to proceed with the wrong project.

3. Encourage collaboration and communication

As discussed earlier, innovation needs to be an explicit part of corporate strategy, and it is imperative that leaders communicate clearly and explicitly to team members what projects the company will (and will not) focus on, therefore ensuring that everyone is working on projects that matter to the company. The leader must be well connected, with a broad business understanding, and it is their job to communicate effectively with team members, so they understand what is expected of them. Leaders want to provide sound strategic direction, rather than telling people what to do. And if a project goes dud, it’s the team leaders’ job to ensure everyone in the team understands why.

Organisations should also encourage collaborative creativity. It is important for everyone in the team to form relationships with their colleagues in the internal innovation chain – from R&D to Marketing to Finance – working together to overcome problems can save a lot of time and money.

4. Prioritize

Often, the problem is not generating new ideas, but knowing which ideas to support and scale. Many companies spread themselves too thinly across too many projects, rather than focusing on those with the highest potential for success – and resourcing it to win. You need to know which project to focus on so that you can allocate resources, time and efforts accordingly. To do this you need to prioritize, therefore ensuring you have enough resources behind your most valuable opportunities. However, this is easier said than done. If there are too many projects with unclear scope, how do you identify the projects are most likely to be your best bets?

You can improve your decision making with the right information, and to do this you need to assess your whole portfolio. Explore and compare alternative scenarios. What is the probability of success? Once you have a clear idea of your priorities, you can allocate resources accordingly. You may also want to set in motion more projects than you will ultimately be able to finance, which makes it easier to kill projects that prove less promising.

5. Accelerate your process

Companies are facing increasing pressure to reduce their cycle time yet improve their new product success rate. You need to find the right balance. Although you want to find the fasters route to market, you don’t want to rush your process and cut corners – which could prove costly further down the line. You want to move a project forward in a way that creates and maintains competitive advantage without exposing yourself to unnecessary risk or costly mistakes.

It is important to have a systematic and quality approach to ensure things happen as they should, without overseeing anything. Therefore, sensible ways to accelerate development need to be built into your system, helping you to gather the right information to get it right first time.

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