Managing innovation: a contradiction in terms?

Photo at blog from webmaster - 27/10/2010 - 07:14

Managing means control, budget, choices and organization. Innovation is all about creativity, the unknown and often anarchy. Sworn enemies, necessary evil or unexpected allies? My analysis of pragmatic symbiosis.

"To kill any innovation, just bring it under control of the innovation board." "If I don't tell them exactly what to innovate they will cost me a fortune and I will be left empty handed."

We all probably have heard sayings like these before and both are probably true to some extent. But personally I think both ends of the spectrum need each other to sustain. The question is just how much? Observing good and bad examples of innovation, I think that a "reversed 80/20-rule" can serve both worlds. What is this rule?

In normal business operations we tend to (miss-)use the 80/20-rule or a lot of things. Anything from awareness that 80% of the revenue is made from 20% of your customers, systems that should be able to manage fully automatic 80% of standard work or accepting 80% of customer satisfaction as an affordable option.

In the case of innovation, one should contemplate to accept up to 20% of interference from the opposite end in order to optimize the respective objectives.
Any group of pure innovators would love to have unlimited time, space and money to come up with the ultimate innovative idea or solution. To the extreme regardless of market potential or even contradicting social values. Trying to manage this will likely lead to some improvements of given options but certainly not radical out-of-the-box potentially very successful new adventures.
On the other hand senior management investing in innovation know that's on average 73% of the innovation projects lead to nothing. There's a big chance that the hard earned bottom-line profits are spilled. By the way 73% is an average. Bad odds if you're only running one or two innovation projects at any given time. Improving potential success rates by up from scrutinizing every spending of money and preempting commercial success, will scare innovative people away.

By focusing on the 20% of the respective activities that each and handles poorly and compensating this with some strengths of the opposite party, choices for mutual success rise dramatically. So gift senior management a bit of insight into the black hole of innovation and have the innovators accept that communication is not equal to interference.

In practice this means that senior management should keep away from influencing or even driving innovation but do what they can do best: facilitate innovation. So not trying manage what's and how innovation is doing about giving the room and means of creativity and the receiving platform for the ripened idea or finished solution.
At the other end innovators are very creative but bad at planning and delivery: it's done when it is done. So rather than fighting for the complete budget or go ahead on every idea, agree upon a first time boxed feedback [brown paper session, laboratory mock up, market trial, etc.] to satisfy curiosity and get incremental budgets. Another format is to acquire more generic budgets and to prepare for regular innovation fairs where senior management can see the progress of the whole innovation portfolio.

In summary I do think that managing innovation is a contradiction but innovative management certainly is not.

As always, your comments are welcomed.

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