The importance of change and stakeholder management when implementing innovation processes

I have seen it happening over and over again: Clients wanting to introduce innovation processes without working change and stakeholder management. People either "just forget" or think they move faster when they don't involve a wider audience. They might in the beginning, but this attitude might backfire quite badly when trying to "push"the new processes into practice..

Innovation is a very fragile process, and if not designed in collaboration chances are high that processes will look great on paper, but will never be implemented as such in reality.

This will then lead to reactions from the project team such as:
- Wow, we did not see this coming..
- Why would they be involved? We are the owners of the process..
- Well these guys (the ones boycotting or complaining) are conservative, they will always block innovation
- Ah, we cannot change the process anymore, this will cost a lot of money

At that time, they will abandon the process or call in a consultancy to see what went wrong. What went wrong.. was..communication and involvement.

Just like any other type of process, the process of innovation has its stakeholders. They range from managing directors to operational staff and clients. All of them have there specific stake in the process and an attitude towards changing existing innovation processes or implementing new ones. You will need their buy-in to make your innovation process deliver the results you expect.

For this to work, here are some simple actions to be taken care of before starting and during the project:
- Map and classify the potential stakeholders in the process
- Define their stake and their attitude towards the innovation process
- Raise potential risks and elaborate mitigating actions
- Define the type and timing of involvement of each one of your stakeholders in the project
- Keep track of the stakeholders attitudes during the project, involve and build your process together.

The chances for success are much, much higher when defining an innovation process via a collaborative process. Might take some more time and effort, but the it will be worth it!

Innovation for innovation's sake?

Innovate or die, that is more or less the motto I have been hearing when working as a consultant with organizations in the last few years. Innovation has become fashion and if you don't put it into your values and your strategy you surely will perish as an organization in the next few years.. Or at least that is what they try to tell me.

Now, I would like to say something so obvious, but what a lot of people forget: innovation for innovation's sake does not bring any value whatsoever. Innovation needs to be directed to be of any value. To be more specific, if innovation efforts at your comapny do not have clear objectives they might lead you to spent loads of money on something that has no value to the organization.

An organization has to ask itself the continious questions: Why am I innovating, in what should I be innovative, how innovative should I be, where am I going to create value?

For example, does it make sense for a large mining company to be the most innovative company in the world, to bring constantly new products to the market? Maybe not, maybe this company should be innovative enough to bring down cost far enough to make a hugh profit on operations.

My view is that one should always focus innovation efforts to support the companies strategy in the short, middle and long term. This means asking the following type of questions: Do I want to enter into new markets? How can innovation support this? Do I want to bring cost down by 20% over the next three years? How can innovation support this?

Of course it is always good to leave an opening for innovations that do not initially seem to support the companies strategy, but might even change it. But for these type of innovations, you will need to have a clever process to evaluate, support and direct them (or not).

Innovation for innovation's sake..Please no!

How much innovation?

In May I visited the Front End of Innovation Event in Boston where Jim Collins spoke about his book "how the mighty fall". During his lecture he made an interesting point about how much an organization should innovate. To his opinion, every industry has a baseline of innovation which a company needs to surpass to be able to compete in that industry. Also, during his study he discovered, when comparing "Great" companies with "mediocre" companies that innovation above the baseline did not make the difference, it did not separate the good from the great. What separated the good from the great, was a certain search for continious improvement, cost disciple and a certain "paranoia" about what the future might bring. Companies that stayed with their core values, did not become too arrogant (we can do anything or nobody can touch us) and are continuosly worried that they might fail, are the ones that survive. As one of his interviewees said: I predicted the last 11 out of 3 recessions.

I can nothing but agree with Jim Collin´s arguments for strong management skills, focus and discipline, especially in companies in mature industries . But to my opinion there are certainly two exceptions to his theory about the innovation baseline, and they are related. First of all, his argument does not fit that well in nascent and immature industries, especially when talking about radical innovations. In these industries, speed to market, differentiation and new busisness models are a disctinctive advantage, especially for the newcomers. Clayton Christianson shows this argument in his various books, where incumbents have a higher possibility of success when innovations are breakthrough. This argument also stands when complete new business models are introduced that create new markets (example Apple with I-tunes or IBM with Global Services). Here, competitors might be taking off guard and although competitors might not be blown away, they will feel the hit for quite some time.

It is my opinion that strong management skills and a focus on exploiting and improving current business to the utmost need to go hand in hand with a never ending search for innovation. Or as Jim says, a productive tension between continuity and change. But the question stands: how much should one innovate?

Starting to write about innovation

It is about time I start blogging about innovation. Just cameback from a trip from the US and Europe where I visited companies like Philips, Nokia, Dupont, Novozymes, Syngenta, Xerox and Telefonica to talk about open innovation and specifically, about partnership management. Interesting enough I saw various models being used depending on the industry, vision of the companies and Intelectual Property issues. At this moment I am working on a report for one of my clients o define its open innovation model. The questions range from what they should outsource, with whom to collaborate, where to locate, how to optimalize the knowledge creation within its network ad how to attract and select the right partners.

Open innovation seems to be the subject of the year, but it needs to set up in a very professional manner, otherwhise the cost of doing so, might outrun the benefits. Many times companies neglect IP issues, do not have the right partnership support in place and do not look at their overall partnership portfolio, not onlytechnically speaking, but also culturally or from managerial aspects.

Various companies are doing an excellent job, especially working heavily on the strategic collaboration aspect, but many are struggling with a portfolio of partners which was created based on historically grown ties via individual projects. University relationships are not explored correctly and the comapny fails to explore other potential ways to collaborate with partners (e.g. idea generation, single solution procurement etc.). I recommend to look at Open Innovation, but look at it from a holistic perspective, including strategic objectives, individual relationships, IP issues, processos, it systems and partnership portfolio management.