Omni has 15 years experience of working with multiple organisations on innovation management and technology commercialisation projects. Here are our top 5 tips for innovation success.
1. Prepare for 80% Budget Burn
With your profit forecast and “Go” decision justified, you need to be prepared to spend the majority of your budget. Why? Succeed or fail, you will likely spend a minimum of 80% even if the project is stopped. Companies are always reluctant to “kill” projects underway if there is a glimmer of hope but getting the project from a development concept to a finished product can be the budget killing zone.
The answer is to manage a development in defined stages using a methodology such as Design for 6 Sigma, a quality management philosophy for converting customer need into tangible features and if needed, manufacturing or DEV specifications. This process designs-out pitfalls before that new product, process or service can make a quality impact upon a customer.
With a structured path, risk is mitigated at each step and costs can be managed effectively. For example, engaging in cost effective Voice of Customer exercises using visual or 3D prototyping prior to major investment steps can get clear feedback on likelihood of customer uptake as well as more standard input into technical features. This sort of analysis also holds sway in the boardroom.
2. Firm up the “Go” Decision
Businesses often consider themselves experts in their field and rightly so. Too often though, “Go” decisions are shortcut by persuasive arguments; “it’s only a venture with a partner”, “we have to take risks to compete” or “we can get some funding”. Before you know it, a project is underway with a life of its own. If your’e not in the critical risk game as an insurance broker, aircraft designer or perhaps a heart surgeon, your’e not even close to being a risk expert! That’s why we need data to support a defined innovation process which can risk manage the unknowns. If the underpinning justification is too light, question the “Go” decision, highlighting risks, fill the data gaps and review again.
3. Question the bottom line
Your salesmen want innovative products to sell and your technology teams need projects to keep them motivated. Sales and Product development working in harmony. A match made in heaven, right? Or, proceed with caution? It can be both. Why? No one has ever seen an internally sponsored feasibility study for a new product development that doesn’t show a positive sales and profit return! Try cutting the forecast by third. What do the numbers look like now? Would you invest in the 33% proposition?
4. Lever the innovation story
Innovation is a very, very positive thing to do. It shouts out that your company is going places and investing to create its future. The story helps you to attract new staff, win new customers and engage in new business conversations. That customer who would not let you through the door is now calling and your innovation press releases are enhancing your web SEO, increasing inbound leads. Without knowing it, you have may have just substantially increased the Enterprise Value of your organisation. Innovation puts you on the map.
5. Don’t forget your core business
Many companies see innovation as a way to develop new and improved products and services that take them away from their core business. This “familiarity effect”, however, can lead to investments in projects with a high risk returns profile as they move away from their comfort zone into new business models, customer segments or unrelated technologies. If it doesn’t enhance or build on core activities, there should be a compelling reason "why?".