Picture someone walking a tightrope over the Grand Canyon, balancing a long pole—that’s the struggle enterprises face when considering where they are versus where they aspire to be.
On one end of that pole lies the daily operations and short term firefighting, while on the other is strategic planning and, if you’re lucky, the opportunity for innovation.
Today’s leaders are under immense pressure to walk that line while consistently adding value. 96% of executives say innovation is a primary growth source for their enterprise, yet only 11% of organizations successfully bring breakthrough innovations to market1. This raises some important questions. Why is the innovation execution gap so challenging for enterprises to navigate, what can you do to overcome this, and how can you derive actual value from your efforts?
Those are the questions Launch by NTT DATA’s Vice President of Strategy, Trevor Anulewicz, answered in a recent webinar.
First things first, how did we get here?
When you’re walking the tightrope, many environmental challenges threatening to knock you off balance come from within your organization. Often, it boils down to the following factors:
- Consistency: Enterprises are creatures of habit, and innovation conflicts with predictable, consistent, and historical business measurements and operations. It is a shove out of the comfort zone that many will push back against. Successful innovation requires a long-term change of thinking, but when you’re thinking solely of short-term survival, innovation stalls or is avoided completely.
- Fear: Some enterprises are so afraid of failing that they never attempt to be innovative in the first place. Failure is a natural part of innovation, but the pressure to deliver success often results in a focus on flaws rather than possibilities. This leaves many wondering why even bother gambling with the possibility of failure when it’s safer to stay the course.
- Lack of support and skills: Once innovation gets off the ground, it needs wings to fly. Enterprises often miss many of the skill sets necessary for change, lack commitment or funding for projects, or struggle to keep up with the pace of innovation. Without proper support from standards, processes, skill sets, manpower, and management, projects stay grounded.
- Adoption: Even if innovation does make it from idea to execution, there is no guarantee it will stick. Enterprises may see success on a project only to struggle with scaling that success across the organization. When this happens, it can shake leaders’ confidence and lead to a lack of trust in innovation efforts in the future.
How can you find your balance?
While these headwinds can set back or derail enterprise innovation, the biggest challenge remains dedicating time and budget and to prioritize new projects against other business needs. What do you do when you have more than one great idea or have the opportunity to create economic impact across multiple areas?
The answer is to build a performance infrastructure with frameworks for systematic innovation. Here, we call that Innovation OS. We help enterprises make innovation repeatable and scalable, starting with a foundation of strategy, organizational assets and capabilities, and communication that support the technology, execution structures, and collaborative engagement necessary for completing projects. We also start by helping them define what innovation means to them and what kind of innovators they aspire to be.
How do you measure innovation?
Innovation efforts must always be anchored in ROI, so start by defining what you aim to achieve and establish clear KPIs across multiple areas - pipeline metrics, business impact metrics, engagement metrics, etc. We recommend measuring:
- Economic impact: Beyond the hard dollar figures, you can measure impact against your competitive positioning, strategic progress, efficiency savings, new revenue streams, or a mixture of these.
- Strategic support: Innovation's success hinges on management's commitment, investment, and support. If the project has clear objectives, results, and initiative planning, holds a firm place on the strategic agenda, or acquires and applies knowledge through management systems, then you have achieved valuable buy-in.
- Alignment and adoption: That buy-in must extend throughout the organization because successful innovation comes from consistent collaboration between people and systems. Are you improving communication? Are you using repeatable behaviors, methods, and tools to move with consistency?
- Capabilities: Innovation requires expanded leadership, management, and project capabilities, so measure your progress. For leadership, this encompasses strategy, communication, operations, funding, ecosystems, and culture. Management will experience gains in business modeling, trend and knowledge management, portfolio, and resource allocations. Project ideation, development, and experimentation will also become scalable and repeatable.
- Capacity: Successful change projects promote innovation from a side gig to a full-time role within the business. They create dedicated roles and organizational resources that increase bandwidth at program levels and enhance the business’s ability to progress multiple projects and mature large bets.
- Systems: Well-designed processes and procedures are essential for effective innovation management. Successful change projects create frameworks by which an organization can operate, align activities, and make decisions. You have succeeded if you are in a place where you can successfully run another project following the same general process.
This is only the tip of the iceberg when it comes to successfully navigating innovation at the enterprise level. Check out our on-demand webinar, “How IT and product leaders can balance competing demands to drive innovation,” for even more insights.
