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Business innovation in five not-so-easy steps

Get past the cliches and on to business innovation by taking five practical steps from a Forrester Research analyst report.

Innovation: the elixir of business success, the call to arms of IT departments everywhere, "has reached the level of near-meaningless cliché," according to Bobby Cameron, guru of IT management at Forrester Research Inc.

Cameron has a point. Google the phrase information technology innovation and more than 91,000 hits come up. IT business innovation: 30,700 hits. If you attend a fraction of the IT events a CIO reporter covers, gurus of every stripe (cliché intended), from conference stages coast to coast, have exhorted you to help your companies innovate.

But if the word has begun to lose meaning, the desire for innovation is stronger than ever. There is an "endless thirst" for business innovation, said Cameron, lead author on the Feb. 21 report "IT Can Help Accelerate Business Innovation."

CIOs want innovation, and not just the "IT-enabled" variety, the Forrester report notes. A 2007 IBM survey of 170 CIOs found that CIOs strongly believe technology is profoundly changing their industries and providing competitive advantage. CEOs also want innovation. Seventy percent of corporate leaders named innovation among their top three priorities for growth in McKinsey & Co.'s 2007 survey "How companies approach innovation."

But, no surprise here, "executives say one thing about innovation and do another," the Forrester report states.

Of those 70% of corporate leaders who named innovation as a top priority, 70% said it was not a part of their leadership team's regular agenda. The 170 CIOs so passionate about the transformative power of technology? Only 16% felt their companies took advantage of that power. Their companies deployed IT to drive efficiency, not transformation.

There's more. C-level execs "hope for internal innovation," the study found, but 75% go looking outside for new ideas, to external peers and partners. The McKinsey CEOs touted "business model innovation" as the surest, most economical way to boost profits, but instead of harnessing the brainpower to make that happen, their companies continued to focus on incremental product and service improvements within their business units.

Closing the gap

How can CIOs and CEOs close the gap between intent and action? Cambridge, Mass.-based Forrester says there has to be a process, a structured, scalable, repeatable process for innovation to become, if not second nature to your company, then at least more likely to happen.

The following are excerpts from Cameron's five-step process for generating ideas and funneling them to fruition, with examples from the 20 companies studied in the Forrester report:

Step 1. Invent and discover.

Employees can't come up with good ideas in a vacuum. Moving from lip service to real deals requires a CEO who can articulate the strategic themes that inform the business. For example, Kimberly-Clark Corp.'s strategy "to become indispensable to retail customers" set the context for the company's innovative design studio and virtual shopping environment.

Executives say one thing about innovation and do another.

"IT Can Help Accelerate Business Innovation," Forrester Research Inc.

Also, good ideas come from near and far, high and low. Companies should build "innovation networks of partners and customers," encourage corporate employees to visit day-to-day work and keep employees fresh through internships, job swaps and rotational hires. Global enterprises must build a "global idea-funneling platform" to capture ideas.

Step 2. Validate viability.

Ideas are fragile. How can you vet ideas without killing them? IBM operates processes for each stage of the evolution of an idea. They include ThinkPlace, a 24-7 online forum that engages thousands of employees, and jams, or discussion sessions. Mentor your idea people, giving them how-to guides for submitting ideas and frequently asked questions, and mechanisms for getting their questions answered -- or ideas will die on the vine. Bank for future use good ideas that might not be feasible today.

Step 3. Incubate and select for investment.

Clarify the decision-making process, so everybody knows what to expect. (Think college admissions.) The Procter & Gamble Co.'s (P&G) Connect and Develop website lets third parties browse P&G's needs, assets and the submission process and tells them when they can expect a response (eight weeks). Ideas are best developed by cross-functional teams, in-house or not. For example, the report stated, "Spectrum Health has a contractual relationship with a set of innovation partners who do preliminary designs of prototype technology." Encourage respectful peer reviews for ideas that are not selected.

Step 4: Implement and commercialize.

The process for deciding which ideas get implemented should be transparent. Encourage rapid prototyping, test with actual customers and look for other product areas or customer segments that might benefit from the new idea.

Step 5: Monitor the process; Reward the results.

This includes offering incentives and cash bonuses, and talking up the idea in company newsletters and meetings. "Smart firms use a wide variety of formal and informal recognition mechanisms," the Forrester report said, including promoting employees to more senior roles and seeking public awards from magazines and other organizations.

Let us know what you think about the story; email: Linda Tucci, Senior News Writer

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