Industry

Foster the emergence of innovation through a structured,
transverse and sustainable approach

More and more companies are approaching innovation through dedicated processes, with a full functional dimension. Innovation cells are set up – often with success – and bring a creative dimension to the culture of these companies. Nevertheless, innovation is often hampered by too long development times, by the difficulty of defining a project portfolio management method and by the lack of a risk culture. Poor integration of the innovation process within organizations or a clear lack of coordination indicate the need to rethink the management of innovation activities.
Setting up a successful innovation organization involves 3 key steps:

  • Step 1: identify the need and potential sources of innovation in the company
  • Step 2: promote the diffusion of innovation by “breaking down silos” in the organization
  • Step 3: pilot and optimize the performance of innovation activities

Step 1: identify the need and potential sources of innovation in the company

Define the need
To identify the appropriate innovation structure, it is useful to define the need in terms of innovation (typology) and, depending on the scale of the need, the levers of actions that are possibly associated:

Once the need and the subject specified (e.g. product innovation by breakthrough), it becomes possible to consider the establishment of a dedicated organization. Of course, it is possible to appeal, for the same need, to several levers of innovation. As such, many examples can be found in the literature of dedicated structures that have proved their worth (see benchmark in Appendix).

Identify potential sources of innovation
Any company, whatever the level of its available competences and resources, is a priori capable of innovating. On the other hand, not all have made an inventory of their creative strengths, nor the link with their needs in terms of innovation. Establishing the overall scheme of the company creative functions is a necessary step to identify the skills to be engaged and to prepare the integration of future innovation processes.

Example of key skills to be mobilized according to the typology of innovation for an industrial type company

To do this, the functions of the company are detailed as well as their interactions in a block diagram that reflects the general organization of the company and areas where innovation can intervene. For example, the diagram here above specifies the relevance of the watch on technological, product and process innovation typologies.

When company already has structures that can generate innovations, it becomes useful to eliminate the hurdles that exist at the interfaces between the different operational functions. This will make optimal use of all available skills, regardless of their position in the organization.

As part of an innovative product development process, while Engineering ensures the consistency and feasibility of the options taken at each stage of maturity, Sales & Marketing shall contribute to refining the objectives and trajectory of the next stages of development.

In summary, to promote effective dissemination of innovation, it is important to have identified:

  • the maturity of the organization on the question of innovation
  • key internal structures in the diffusion of innovation
  • synchronization points in the progress of an innovative project

 

Frame the deployment of the process
Before launching a cross-cutting innovation process, it is necessary to focus on the following 5 themes:
Project oneself: Check the consistency of the innovation strategy with the general corporate strategy to avoid over-investment in the activity of innovative projects
Control: Distinguish the profitability of the innovation strategy and the profitability of the
innovative project. Define specific indicators and objectives for measuring innovation
performance
Manage: Involve all actors likely to generate responses to specific questions related to innovation
and regulate the interaction
Invest: Implement an innovation program that anticipates the associated long-term burden
Perpetuate: Continually evaluate opportunities and idea generation

 

Step 2: promote the diffusion of innovation by “breaking down silos” in the organization

We have seen that the mapping of the company’s processes makes it possible to coordinate the work of the various structures generating innovation. Knowing how to mobilize the right skills and resources at the right moment in the life of an idea and an innovative project according to their maturity is crucial for the performance of an innovation program.

This approach will make it possible to define the scope of transversal activities dedicated to innovation. Once the mapping is validated, we can then define the objectives, the interactions and the deliverables of each function involved in the innovation process.

Below is a diagram example of a company’s processes and functions, on which appear the contributions of the functions to the different entities and projects dedicated to the innovation.

Example of transversal activities and interactions between different functions in the context of an innovation process

It then becomes necessary to provide all the elements defined in the structuring step with a dedicated management process. It will have to:

  • Define and communicate the objectives in consistency with the strategic line
  • Assign resources
  • Facilitate creative sessions and communicate on reflections
  • Manage the pool of ideas
  • Propose projects that respond to an opportunity and a feasibility

Finally comes the issue of deployment and sustainability of the process to ensure optimal performance. This performance will be measured by specific indicators to be defined with the greatest rigor: they shall consider the general impact of the innovation activity, whether direct (for example on products, business) or indirect (in terms of image, market share…).

Step 3: pilot and optimize the performance of innovation activities

Define the innovation function
Innovation management requires a dedicated functional dimension. The sustainability of innovation activities is subordinated to the success of the projects that emanate from them, fostered by the upstream intervention of a multidisciplinary Innovation Committee. 

The Innovation Committee shall have two main objectives:

  • Generate questions (that is, topics to be explored)
  • Generate projects

Not only the performance of each project but especially the performance of the entire activity shall be questioned: upstream of the projects, the issues generated through the strategic asset they bring or the possibility to position them in relation to a need can be highlighted.

The pursuit of these two objectives will have direct and indirect consequences for the company:

  • Direct consequences: Innovation Committee will be in charge of the value definition process (product, service), in line with the company’s strategy, and identifying the skills to be developed to achieve it. It will be a link that will contribute to the overall innovation drive in the company.
  • Indirect consequences: the substantive work carried out by the Innovation Committee will highlight – through the questions generated – the stakes and challenges that the company faces and will in this way guide its strategic vision. If the fields of innovation are initially defined in coherence with the strategic orientation of the company, the fast evolution of the consumer expectations in terms of technologies or services greatly complicates the definition and the prioritization of the innovation subjects. They shall therefore be based on a solid understanding of the market maturity.

Manage ideas, capitalize for the future
During creative sessions, it is useful to withhold all ideas. The management of this idea pool then requires a suitable methodology. With a pool of ideas associated with keywords describing the subject and the need, we can quickly create rewarding associations while avoiding duplicates and dead ends, which also requires documenting rejected ideas.

Manage the project portfolio
To launch only projects whose expected maturity and profit are consistent with the objectives of the company, a method of evaluation and monitoring shall be defined.

The transition from the idea to the project shall be subjected to a rigorous evaluation of a criteria set that includes the removal of the blocking points, the remaining points being the subject of action plans.

It is not a question of restricting creativity by rejecting a suggestion at this stage: there are no real workload involved. Rather, it is about launching projects whose viability has been satisfactorily tested.

Distinguish the management of innovative projects from the management of “classic” projects
Knowing how to stop and capitalize on false starts is key to improving the overall profitability of innovation activity over the long term. Even more than for a traditional project, when a project enters the “innovative” category, it becomes necessary to involve all the actors who condition its success and this from the phase of its formulation, to share the risks.

A possible decision to stop will have to document the remaining constraints for a future solution. Thus, the work done and the results obtained can be valued later.

Conclusion

The purpose of the innovation process is above all value creation:

“Innovation is the specific instrument of entrepreneurship, the act that endows resources with a
new capacity to create wealth.”

Peter Drucker

Innovation activities shall leave a large space for creativity and be part of an approach that mobilizes several components of the company. But the creation of value will become tangible only through the deployment of a rigorous management of innovation. As such, here are several examples of effective innovation management by companies that are – in our eyes – among the best on this theme.

Pagamon, cabinet de conseil en Stratégie et Organisation fondé en mars 2013, accompagne les acteurs de l’industrie afin de structurer leur vision stratégique, améliorer la performance opérationnelle de leur entreprise et pérenniser le changement dans les organisations.

Nos interventions se situent principalement dans les secteurs automobile, agroalimentaire, sciences de la vie, et plusieurs autres secteurs. Elles couvrent les domaines d’expertise suivants :

  • Stratégie et Organisation
  • Marketing et Expérience Client
  • Innovation et Développement
  • Transformation Digitale et Big Data

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