Driving Innovation

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 Much has been written about innovation, but there is no clarity with respect to many aspects. How do we measure the ROI of ‘coming up with’ and ‘implementing’ a particular innovation?

Companies need a consistent way to determine which ideas or initiatives to invest in and which to pass on. Typically, they use some sort of financial forecasting to help guide this decision, but this thinking is often flawed as these models are filled with assumptions and you really do not know all the ways a breakthrough idea will impact the marketplace. There is no way to model out. Your best bet is to understand how an idea enhances customer experience. If your innovation results in the improvement of any customer experience, then you very likely have a winner on your hands. The Experience Delta (the difference between a present experience and a new one resulting from an innovation) is the currency by which you should view the impact of every new idea. If you cannot clearly articulate the Experience Delta, then you are not likely to be successful in your innovation efforts.

How can companies foster a healthy innovation biome? How can they choose the right set of actions to sustain it?

Innovation starts with leadership. If the leadership of an organization visibly demonstrates that innovation is a priority, that everyone is encouraged to innovate, that the company is willing to continually try new things, and not be deterred by failure, then you can develop a culture that lets you produce one great hit after another. Think of the most innovative companies. Every single one of them has had far more failures than successes, far more misses than hits. But the leaders of these organizations have instilled a culture where risk-taking and trying new things is encouraged.