To innovate is to bring good ideas into reality, successfully and continuously. It means converting knowledge and ideas into products or services, new or improved processes to obtain competitive advantages.
Any innovation can mean a radical leap, something that the market has never seen, or it can be incremental, taking an existing concept and improving, turning it into something new.
In both cases, innovation is the result of the process of managing a continuous flow of projects and programs that channels the necessary resources to bring them into a successful end.
It is a management and open process that can be designed, implemented and improved in all companies and organizations. If it is managed well, it favours the creation of “innovative culture“.
The management of the innovation process helps companies and people to share knowledge, making contributions and decisions about risk taking, benefits and associated strategic value.
The innovation process includes challenges that should be addressed in an efficient and particularized manner for each company or organization. Some of these challenges are:
- Difficulty in selecting the right ideas and recognizing opportunities.
- Difficulty in capturing and understanding the ‘voice of customer’, their needs, explicit and implicit.
- Difficulty investing these ideas in the right markets and with adequate resources.
- Understand the market and its globality. The influencing factors and finding the right segment
- Establish correctly the cost and potential value of projects, inputs and outputs, to guarantee financial resources.
- Identify and understand the correct mental model or appropriate paradigm.
- Find and work with the right people to take advantage of the contributions of everyone, teams, clients, etc.
- Enhance agility, transparency, measures and indicators and a good collaboration of everyone in the process.
- Create prototypes to generate observations and test ideas through the closest reality.
- Manage the cash flow needed in each project and for the total flow of projects and programs.
- Optimize the measures of innovation management and its process.
- Capacity to eliminate or redesign projects, when changes make it necessary.
Why agile innovation?
Agile innovation is based on the active fusion of these two concepts:
Innovation + Agility = Agile innovation
Agility is introducing the concept of value and flow in all processes, freeing resources and integrating them especially to the innovation process.
Companies need to respond quickly to changes of all kinds and develop new products, services or business models. In addition, they also need to innovate internal processes to be more competitive or position themselves correctly in the right segment.
Many times, the technologies and methods to do this are available, but 85 to 90 percent of new projects fail due to rigid structures. It is necessary to have agile methods of innovation, to integrate the design with the development, the trials with the use and the introduction. Therefore, make innovation processes faster.
Agile innovation results from applying the “Lean” methodology in accelerating the innovation process and all the related ones.
The term “Lean” suggests something fat-free, lightweight, and therefore freed of unnecessary weight. The term “Agile” is similar, but also has some connotation of movement, velocity or ability to acquire velocity, that is, light and with a good capacity for acceleration.
Since Toyota implanted its ‘TPS’ (Toyota Production System) back in 1975, with its results and success, the term “Lean” quickly expanded all over the world. Today it applies not only to production or in industrial fields but also in the processes of companies and organizations of all kinds. We apply it to innovation.
In this way, the agile company is one that has managed its priorities, first gaining velocity in all processes and secondly applying new resources to innovation.
It would be necessary to make a distinction between companies that already have a history and therefore a culture developed over time and very young or newly created companies such as ‘Startup.’ A “Lean startup” seeks to “create” a new model of business, instead of “running” an existing model.
Lean + startup = velocity
Velocity, in this case, is the simultaneous activity of chained processes; Cycles of development and learning cycles; Build, measure and learn; Iterate the cycles; Persevere or pivot; create a business model based on the minimum viable product (MVP); use the “Canvas” model as a tool.
In summary: The innovation process is made agile through “Lean” methodologies.
Is it difficult to innovate nimbly?
In our environment, the results show that there are few innovative companies and still managing innovation is a pending challenge. The % of successes obtained with new products or services, companies or projects, is still very low. And yet, what differentiates companies that consistently generate profits, is their capacity for innovation and agility.
If we look for features that define an agile company, they could be the following:
- Lightness. It comes from the absence of “charges”. In the sense of a light structure, not complicated, not authoritarian or bureaucratic. In any case, making application of the “Lean” techniques to all processes, including especially the innovation.
- Velocity. It does not mean that everything must be done faster. It means a high percentage of tasks and times that add value over the total process times. Velocity measures have been implemented and the cycle times have been reduced.
- Speed. Indicates that waiting times and duplications have also been eliminated. Actions are always taken in time and with adequate responses. Decisions and responses result not from haste, improvisation or urgency, but because of training and creation of structured habits.
- Elasticity. It can also be associated with flexibility. The flexibility to adapt faster to changing needs and the elasticity of knowing how to return to the required position in each case.
- Dynamicity. The dynamic aspect is contrary to something static or immobile. A dynamic organization is the one that moves in continuous evolution to improve and adapt to changing needs. It also contains the concept of anticipation, without which it would be very reactive.
In summary: being agile is much more than being “flexible” and more than having “reactivity” or “responsiveness”.
We can imagine the agile company in terms of innovation and change, as one that constantly evolves in its competitive environment and that proves it showing:
- Being the first to detect and understand changes and trends in their environment.
- Understand and anticipate the needs of their segment or customers.
- Have a permanent capacity for rapid reconfiguration in the face of changes and needs of new paradigms
- With ability not only to detect them, but with the ability to anticipate existing ones.
- Showing creative capacity for new business models
To tend to this type of behaviour, the company use “agility”, in contrast to the “rigidity” that characterizes many cases.
Cultural and organizational change. Agility: a project
To develop a correct implementation of agility, we should consider that there is no standard agile methodology of universal application. Better to have clear concepts and apply them according to the particularities of each company or organization; their culture, location, environment, organizational maturity, teamwork, etc.
Agility in many cases implies a cultural change in the organization. As in all cases of cultural changes, how people perceive is fundamental. Any change causes tensions and possibly resistance. To overcome this, clear priorities, roles and responsibilities will be communicated. And also, continuously reporting the results.
May be interesting to start pilot projects and use the results to learn and facilitate understanding. The experience of those who have worked on these projects usually acts as a facilitator of the agile innovation methodology.
The work teams themselves are best placed to distinguish the necessary changes and bring solutions for the process acceleration.
It is necessary that the members of management team act as facilitators or motivators.
Education is key, and it is very important that is part of each project activity, ensuring that it is directly related and applied in the work environment.
A model for agile innovation management.
The model we present is based on the experience and practice gathered in the companies. A single management process facilitates decision making at the right time.
Innovation management is harmonized with this process and ensure long-term sustainability and development.
The experience with this model has served, at the same time, to develop a tool for evaluating innovation management and the capacity of companies and organisations to innovate.
Key elements of the process:
Elements of the organization:
- Direction and decision taking
- Organisation by projects and programs
- Revisions by phases. Stages and doors
- Structured development of each project and activity
- Appropriate techniques and tools.
Support processes or elements:
- Strategic Product Management
- Technology Management
- The intelligence of the company
- Management of the flow of innovation
Identifiers of a ‘good’ agile innovation management:
1.- How are decisions taken? Who directs the innovation
There is an agile, clear, and known decision-taking process. Decision taking is made at the managerial level when defining the innovation strategy and with the ultimate responsibility in the selection of projects, project teams, and phase revisions.
In small or very small companies can be a single person, one of the managers or the CEO himself. In large companies, a team or committee formed by managers, with the leader or responsible of the innovation process and its subprocesses.
From here, the elements may be, those that affect each project in particular and those that affect the set of projects of the entire organization.
Which affect each specific project, including the process of selecting ideas:
2.- Multifunctional project teams. Central and extended team.
It is essential that each project be assigned to a team. And that each team has a responsible person. The project team is multifunctional, that is, it brings together people from different areas and functions of the company, of different levels and specialties. The central team develops the project plan and its execution, and is responsible for its objectives, deadlines and budget.
3.- There are phase revisions. A common method for all.
The different phases of each project can overlap or develop concurrently (Scrum), but in any case, a system of ‘stage and doors’ will be established, which may stop the project, or decide its reconversion, iteration, return to a previous phase or continue in the planned manner or with some variant. This process of revisions by phases is known and common to all projects; but flexible enough so that projects or programs of very different nature can fit in.
4.- Homologate methods of planning, execution and control of projects.
There are common and well-structured methods of planning, development, execution, control and review of projects; continually reviewed to ensure their agility. There are measures and indicators that identify the results of these methods. This is key not to invent planning, execution or control framework, etc. in each project.
5.- Appropriate techniques and tools. Both design and development
Always have the appropriate design and development techniques and tools. There are many that are used and can be defined according to each project or program. The design strategy can be used: either conservatively or highly innovative, to create or maintain a competitive advantage. This double management of concepts and design is also a key element for the future exploration of new forms and for the construction of an iterative methodology.
What affect all projects and programs and the flow of innovation:
6.- Innovation flow management, as a continuous flow.
The flow of innovation is formed by the set of projects and programs and oriented according to the innovation strategy. The responsibility for managing the flow of innovation is normally the same person in charge of the entire process. Its proper functioning is key to the company’s continuous availability of new launching and deployment opportunities. For its optimization, measures and indicators are necessary, and within the continuous flow, the iteration of activities and the concurrent development.
7.- Strategic management of the product/service portfolio.
Portfolio management is the right product or service strategy and is a key support of the entire innovation process. It considers in general, the life cycle of products, the vision of the segments or lines, their evolution in the market, strategy of platforms, strategy of expansion or concentration, and new developments. It is usually based on the elaboration of a technological map and a map of interrelated products / services. Its scope should be global, regardless of the scope or area of action of the company, even if it is local.
8.- The intelligence of the company.
The intelligence of the company is the structured way in which the company learns from outside. It includes economic intelligence, strategic intelligence and technology management, or as they say, technological surveillance. It is based on continuous learning and is structured in different processes such as:
- Economic intelligence. It is related to information on the economy, geopolitics and legal regulations.
- Strategic intelligence:
- Social intelligence determines the convergence and coherence of activities with social issues and environmental values.
- Market intelligence analyses power or influence relationships throughout the entire supply chain, among suppliers, competitors, customers, end users, new entrants, etc. The company can make a map of opportunities, save time and avoid reinventing the wheel. Build a customized marketing mix and positioning according to the most appropriate value proposition.
- Technological intelligence, or technological surveillance, aims to follow the evolution of knowledge and technologies, especially those that may relate to their current or future activity.
No intelligence can be approached separately from the others. Market intelligence is fed by information that comes not only from social intelligence, but also from knowledge that is the result of technological intelligence and that comes from technicians who have studied, and developed technologies and products used by competitors.
The benefits of all this:
The benefits of this approach can be measured and in general are spectacular:
- Reduction up to 50% in “time to market”. (Time from the start of the development project to the first significant sales)
- Increase in sales revenue. A reduction of ‘time to market’ has an impulse to add new products or services that increase sales, but above all, it allows taking decisions about the product’s life time and its impact on margins. In general, margins increase.
- Increase in the possibilities of reducing the life cycle of products, allowing to be faster and the first to launch new developments.
- The optimization of resources invested in the entire innovation process. This is due to timely decision making, concentration on projects with better prospects and elimination of projects with doubtful end, etc.
- Less errors in launch. Precisely because of the better filtering throughout the process, the launches have a greater short-term impact on sales and a greater percentage of them is consolidated.
- Greater opportunity to obtain and retain talent, and greater possibility of establishing external networks that are positive in new developments.
In summary: The term ‘Lean’ and ‘agility’ apply not only in production or in industrial fields but in the processes of companies and organizations of all kinds, and especially innovation.