While protecting and promoting innovation in times of economic crisis is driven by the need for business agility, it’s best done with a guiding process especially given the difficulty in defining what exactly innovation is, according to Cambridge, Mass.-based Forrester Research.
The fact that innovation is often perceived as something “new, exciting, game-changing” hinders any kind of analysis, according to Bobby Cameron, vice-president and principal analyst. Actually, he said, innovation is anything that drives business impact, whether it’s a new technology or an existing one applied differently.
Cameron described innovation as existing along a continuum with “business as usual” at one end and innovation at the other. Projects will necessarily vary along factors like standardization and risk, among others.
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When managing innovation, it’s useful for organizations to have an innovation process, said Cameron, describing it as one of obtaining funding for innovative projects and measuring and rewarding the results. The "finding" part of the process entails seeking technologies through a multitude of channels including employees, customers, partners and vendors. Once ideas have been gathered, they are subjected to a filtering “funnel” through which constraining criteria are applied to ensure that they align with the goals of the business. That can be done by a steering committee composed of “highly innovative” people from across the organization, who might tweak the ideas to fit business goals. “They might need to turn the idea 30, 90 degrees from where it started to make it fit,” said Cameron.
Once done, the ideas undergo a testing phase with partners and customers within a typical development environment except that methodologies are relatively more agile considering the uncertainty of the project, said Cameron. However, should the organization decide to commercialize the project, he said, then a normal development environment is a must.
The innovation process can certainly benefit from Web 2.0 technologies like collaboration tools, which are great for allowing “listening mechanisms,” said Ted Schadler, vice-president and principal analyst with Forrester. A wiki, for instance, can be introduced to amass ideas from different parties. Moreover, contributors can not only be recognized for their comments but receive feedback from others, said Schadler.
But given that innovation can be thought of in different ways, making decisions on innovation investments can be tricky to position to the business. Cameron suggests that organizations “bucket” these investments into groups. One such group is speeding time to benefit, as with technologies like cloud computing. Another group is reducing cost of delivery or ongoing support of a particular IT function as with service-oriented architecture. Yet another group is empowering users with tools to manage information more directly as with master data management.
Having an innovation process in place is a useful tool, but the degree to which companies can take on innovation will depend on the state they are in. A company in radical decline, said Cameron, may have no recourse but to think only short-term. However, he said a company in “measured pull-back” that has to sustain a number of months of negative or flat growth does have the option of looking at opportunities for accelerating out of the downturn.