I still remember when McKinsey & Company published their landmark study about the “innovation gap” almost ten years ago. The key finding: while 84% of executives said innovation is extremely important to their growth strategies, 94% were unsatisfied with their innovation performance.
And, I remember the response from global enterprises: an intense, renewed focus on innovation. Since then, we’ve witnessed the rise of innovation divisions within large enterprises, such as American Family Innovation; new executive titles, such as Chief Innovation Officer; and new metrics for measuring job performance based on the volume and quality of innovation, and clearly, the pace of innovation has accelerated as a result.
But a new innovation gap has materialized: the difference between the time an idea is conceived … and the time its benefits are actually achieved by the enterprise.
One recent study found that on average, companies are now launching two or three new products or services annually, each taking seven to eight months to get to market. That’s not going to cut it in the digital economy. We need more innovation, faster – and more importantly, we need to get those innovations to market much sooner.
So, what’s the solution?
Capgemini advocates a new approach that focuses on outcomes, not just ideas. We call it “directional innovation.” There are four key tenets:
Make innovation agile
In other words, make your innovation process similar to your Agile development process, where ideas flow freely, every idea is tested quickly, there is no penalty for failure. Bad ideas fail faster, great ideas come to light sooner, you can take the best ideas to market sooner, and your investment in innovation is maximized.
In all discussions of a promising new idea from the outset—whether it’s the Cloud or IT infrastructure, security considerations, the impact on the customer experience, supply chain requirements, and so on. That way you can quickly deploy once you’ve assessed risk/reward considerations and made the decision to move forward.
To save time and minimize risks. All too often, security is seen as an obstacle to innovation—something that introduces massive complexity and slows down implementation. The result is that all too often security is bolted on rather than built in. Since no innovation will be deployed until it meets strict security requirements and compliance mandates, it makes more sense to proactively embed security into all new product/service development. This approach transforms security from a source of consternation into a catalyst for innovation, because once the risks are mitigated or minimized, new ideas can flourish and achieve results sooner.
More freely within your organization and expand your access to ideas from outside the organization. As Sun Microsystems’ co-founder Bill Joy pointed out two decades ago, “No company has a monopoly on great ideas.” By taking a community-oriented approach to innovation, your company can get great insights and feedback on its own ideas, as well as access the combined expertise and knowledge of many other sources, such as partners, supply chain members, industry associations, user forums, online focus groups, and more. The result: a higher volume of innovation, higher innovation quality, and faster time-to-market for great ideas.
Takeaway for IT leaders
It’s time to rethink how IT can facilitate and expedite innovation. IT should not simply be the utility that supplies infrastructure for developing and running new innovations. By proactively engaging with innovation groups internally and externally, and by addressing infrastructure and security considerations from the outset of ideation, IT can become a driving force behind directional innovation.
In the process, IT can help improve the volume, quality, and deployment timeframes for new ideas, while also helping to minimize the technical and business risks. Simply put, IT can demonstrate its ability to serve as a true strategic partner to the business.
I would recommend you to read two interesting blogs by Arnaud Balssa, first one is how to Kick start your Agile Transformation Journey (and be a Digital Disruptor) and second is Industrial and agile: How to be both?.
We’d love to discuss our directional innovation ideas with you in more detail. Please contact us to arrange a meeting.