Wanting to add strategy and structure to your innovation initiative without killing it with administration?
HBR published an interesting article a year ago (https://hbr.org/2014/12/build-an-innovation-engine-in-90-days) describing an innovation governance system that go hand in hand with our experience at Innovation 360 group. In the article Innosight describes a concept called the Minimum Viable Innovation System (MVIS). As the name implies it is inspired by the concept of the Minimum Viable Product (MVP) popularized by Eric Ries in the book The Lean Startup.
A minimum viable product might not have the fancy UI, or a fully developed backbone but rather just those core features that allow the producer to start learning about the customer need the product is supposed to meet. The MVP is then iteratively developed to comprise more and more of the features that people actually are willing to pay for. Correspondingly the MVIS include a minimum framework to ensure the success of your innovation endeavour, while setting the stage for you to add more functionality in coming iterations.
MVIS and InnoSurvey™
We have had the opportunity to frequently develop and implement a combination of MVIS and InnoSurvey™ analysis addressing the most important part of innovation work – “Innovation Capabilities” needed to carry out an innovation process and governance model executing a specific strategy and would like to share how you really get a governance model and a process to work with optimum effort and low risk.
We start our projects by running a 360° InnoSurvey™ analysis understanding and mapping the innovation strategy (why they innovate), the types of innovation (what they innovate), and measure their innovation capabilities (part of how they innovate).
The InnoSurvey™ map, showing internal, and external capabilities mapped to innovation strategy. We use this to plot the Innovation Footprint (the overall DNA of your organisation).
This reveal the starting point, the purpose and the direction of the innovation initiative. The innovation DNA of your firm is then mapped and linked to a MVIS governed innovation process adopted for optimal efficiency. If you are interested please read more about the InnoSurvey™ analysis here.
When implementing MVIS you need to remember it is an Innovation System: there isn’t just one thing you need to do, like generate ideas, to really create value from innovation. You have to generate ideas, but you have to do many other things in parallel with that to enable those ideas to be prioritized, to enable them to be resourced, to enable them to be developed in a disciplined way that is also flexible, and then to be funded at each level of their development, and ultimately scaled.
The system consists of four elements:
- Idea buckets
- zeroing in on strategic opportunity areas
- forming a small dedicated team
- appointing senior leaders as shepherds
The concept of Idea Buckets suggests that, strategically, all innovations can be sorted into one of two buckets. Core innovations are innovations that extend current business, either by improving internal operations or extending current offerings, and as such, should be managed within your main business organisation, while New Growth innovation generate new growth by targeting new markets or new customers (discussed in a previous InnoBlog post here).
Sorting ideas into these buckets help you in two ways, partly to know which ideas to develop within your everyday operations, and which to develop in separate teams, and partly to calculate your Growth Gap. Your Growth Gap is the difference between what your current business can yield in five years, and what your business plan says your revenue should be in five years. You use that gap to decide the level of risk in your innovation portfolio.
To zero in on a few strategic opportunity areas is something we at Innovation 360 group help our customer do by using Osterwalder’s Business Model Canvas.
To pick which to start with, you can use the criteria suggested by the HBR article:
- A job that many potential customers need to do that no one is addressing very well. Either a technology that will enable customers to do that job much more easily, cheaply, or conveniently, or a change in the economic, regulatory, or social landscape that is increasing the need for that job.
- Some special capability of your company that competitors can’t easily copy that will give you an advantage in seizing this opportunity. Using InnoSurvey™ is a fast and powerful way of finding these capabilities.
By now you know the level of risk you want in your portfolio, which ideas to develop in daily operations and which ideas to develop away from the core. It’s time to setup a small dedicated team for each New Growth idea you want to explore. You rarely need to hire to do this, instead try freeing up resources by eliminating “Zombie Innovation Projects”, that is, innovation initiatives you are driving that you actually don’t believe will generate the desired gain. The teams should work hypothesis based with validated learning cycles.
Your everyday operations typically involve risk minimisation in a robust planning and budgeting process, which is perfectly fine for your core processes, and core innovations. New growth initiatives, on the other hand need governance designed to manage strategic uncertainty. Therefor you should not let your ordinary management team manage your new growth projects, but rather setup a separate team of senior leaders to shepherd those projects. The team should be given mandate to start, stop and redirect New Growth ideas. MVIS suggest that shepherds should follow the principle of agreeing to disagree, if all of shepherd team want to go forward with the same idea, it just might be too safe. This is a principle often used by partnering venture capitalists to evaluate start-ups to invest in, and since VCs constantly focus on strategic uncertainty their governance model is very well appointed for Senior Leaders Shepherds in governing new-growth initiatives.
The 90 days suggested in the blog post title refer to the length of an implementation cycle, in 90 days you can implement all four parts of the governance model and shepherd some new ideas all the way through the innovation process funnel. We have experienced both the pace and the implementation of real ideas as critical success factors for MVIS implementations. The pace sets a good momentum in your project, helping you avoid, too zealous, attempts of doing everything right the first time. After your first 90-day iteration, remember to learn from your process. Do a retrospective, evaluating what went well the first time, making sure you find ways of repeating that success, and what to do differently to improve your next iteration. Working with actual innovation ideas is best practise to avoid a sense of dry swimming that has a tendency to surface in implementation projects, and launching new offerings to the market is an excellent way to keep up both your own, and the management teams, interest in the project.
This blog post will be followed by other insights into our working with clients, and the innovation tools we use. And don’t hesitate to contact us to tell you more about InnoSurvey™ and MVIS.
Curious about the tools we use for our 360° analyses? As part of our aim to help the innovators of the world, we are providing our unique innovation measurement tool and database, InnoSurvey™, as a free-to-all digital on-line service here.