HOW TO INNOVATE.

Innovation is all the rage today for compa-nies from small to large, and rightfully so. Evidence of this pressure to constantly re-invent and innovate: In a study published in 2012, Yale University predicted that more than three quarters of the Fortune 500 in the year 2020 will be companies we have not heard of yet1. The 2014 DMI Design Value index reported that companies who focus on “design as an integrative resource to in-novate more efficiently and successfully” have maintained significant stock market advantage, outperforming the S&P by an extraordinary 228% over a decade2.

STRATEGIC INNOVATION

Those firms that are innovating successfully and winning are those that take a strategic approach to innovation and align it with their business strategy. HBR reported in their June 2015 issue3 that despite massive investments of management time and money, innovation remains a frustrating pursuit in many companies. Innovation ini-tiatives frequently fail, and successful innovators have a hard time sustaining their performance—as Polaroid, Nokia, Sun Microsystems, Yahoo, Hewlett-Packard, and countless others have found. Why is it so hard to build and maintain the capacity to innovate? The reasons go much deeper than the commonly cited cause: a failure to execute. The problem with innovation improvement efforts is rooted in the lack of an innovation strategy.

Innovation Point, a consultancy, reported in their white-paper “A Framework for Strategic Innovation” that:

“Strategic Innovation takes the road less traveled–it chal-lenges an organization to look beyond its established business boundaries and mental models to participate in an open-minded, creative exploration of the realm of possibilities. Some organizations may feel that seek-ing breakthrough innovation is too grandiose a goal, and would be content in “simply growing the business.” Experience shows, however, that simply focusing on the short-term yields short-term results–while teams aspir-ing to seek significant breakthroughs will both identify

“big ideas” and also generate “closer in” incremental ideas.

Strategic Innovation is not characterized by mundane, incremental product extensions, the “me-too” models of close followers, or band-aids for inefficient processes. It does not consist of simple facilitated creativity ses-sions or brainstorming new ideas. Instead, it spans a journey of inquiry and activity–from creative inspiration at the ambiguous “fuzzy front end” through the detailed requirements of successful execution that lead to busi-ness impact4.”

PROCESS

The strategic innovation process, as Innovation Point asserts, calls for a holistic approach that operates on multiple levels. First, it blends non-traditional and tradi-tional approaches to business strategy, deploying the practices of “Industry Foresight,” “Consumer/Customer Insight” and “Strategic Alignment” as a foundation, and supplementing them with more conventional approaches and models. Second, it combines two seemingly par-adoxical mindsets: expansive, visionary thinking that imaginatively explores long-term possibilities; and prag-matic, down-to-earth implementation activities that lead to short-term, measurable business impact.

And that’s the challenge. It requires different mindsets and different skillsets. Many people who are creative problem solvers and innovators don’t actually realize or even admit that they have a process. The percep-tion is that the ideas flow from intuition. This intuition though is taught over time. It’s learned by following a process, developing skills and practicing that process over and over until that process becomes intuition. How does a firefighter know to leave a building before it collapses? Intuition. But that firefighter wouldn’t have known that his or her first week on the job. The intuition is gained by learning new skills, being in similar situa-tions and following a process many times over. Once the experienced is gained, the process doesn’t feel like a process–it feels like intuition.

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1. Scoping & Planning Framing, Brief Writing, Developing Hypothesis

2. Consumer Insight Listening, Field Observation, Trendspotting, Empathy & Exploration

3. Industry Foresight Researching, Trendspotting, Listening, Exploration

4. Opportunity Identification Synthesizing, Pattern-Recogni-tion, Sense-making, Prioritizing

5. Business & Product Design Concepting, Experimenting, Testing

6. Consumer Validation Listening, Incremental Experimentation, Evaluating

7. Implementation Execution

FOCUS

HBR in their June 2015 issue3 asserts that an innovation strategy should answer these questions:

• How will innovation create value for potential customers?

• How will the company capture a share of the value that its innovations generate?

• What types of innovations will allow the company to create and capture value, and what resources should each type receive?

The answers to these questions posed by author Gary P. Pisano, help align business strategy with innovation strategy. Once innovation strategy is aligned, it’s time to execute. Many organizations have a disciplined approach or method or even utilize multiple approaches. Others execute without a disciplined process. No matter where your organization falls on this spectrum, there are four common approaches to innovation that companies utilize.

APPROACHES

Many of the most innovative organizations are deploying a combination of methods in order to solve challenges in various ways. The combination of these approaches is a powerful way to maximize the benefits of each. In order to help think about when and how to take advan-tage of a specific method, we’ve outlined the four broad innovation approaches in use today: Lean Startup, Design-Driven, Open Innovation and Crowdsourced Idea Management.

DEFINITIONAn agile process of searching for an innovation that can be economically viable and technically feasible. By incorporating user feedback and experimentation early in the process, the methodology embraces “failing early to succeed sooner.”

USE WHEN?• Need to test & validate core assumptions early

in the process• Limited resources, specifically time• Competitive environment is dynamic • Threat of disruption of product, service, model

BENEFITS• Cultivates a fast-moving, learning culture that can

quickly adapt• Provides nimbleness & speed towards minimum

viable product• Encourages action & responsiveness while limiting

risk (agile development & pivoting)• Encourages greater sense of urgency to “ship”• Elimination of wasted time & resources

CULTURE IMPACT• Agile mindset• Values customer feedback over intuition• “Failing fast” mentality

LIMITATIONS/CHALLENGES• Setbacks can kill projects too early• Ability to implement in cultures where planning or

“black & white” decision making is emphasized• Challenging to implement ideas at scale due to

embedded infrastructure of organization• Could pose risk when testing market with current

customers• More qualitative than quantative in market research/

feedback • Build-measure-lean aligns with tech better than other

product development workflows

WHO’S GREAT AT THIS?• 3M• Coca-Cola (Founders Program)• Unilever

TOOLS• Batterii• Launchpad Central• Strategyzer

LEAN STARTUP

DEFINITIONDesign-Driven is a mindset, method, approach and set of tools applied in order to achieve human-centered inno-vation, which will add sustainable and meaningful value.

USE WHEN?• The need or problem is unknown or ambiguous; the

question might not even be clear• Need for product, service & business model transfor-

mation• Need to develop a consumer or customer-centric

mindset• Working to understand need vs. finding a market for a

solution that has been created• Making sense of information

BENEFITS• Provides experience & deep knowledge by being

close to the consumer/customer• Encourages action while limiting risk: prototyping &

iteration loops• Celebrates inspiration as a catalyst for innovation• Provides insights to make critical business & strategic

choices

CULTURE IMPACT• Cultivates a creative and human-centered company

culture• Creates interdisciplinary collaborators: thinkers &

doers across business units• Promotes open-mindedness and curiosity• Celebrates inspiration as a catalyst for innovation• Purpose-driven challenges/problems

LIMITATIONS/CHALLENGESMindset shift for many cultures and employees, there-fore initial execution cycle to instill in teams is long and process is hard until practice becomes habit

DESIGN-DRIVEN

WHO’S GREAT AT THIS?• Dyson• Frog Design• Herman Miller• IDEO• Intuit

TOOLS?• Batterii• Concept Board• Murally

DEFINITIONInnovating with partners outside the organization to share risk & reward to solve a specific problem. Typically sourced within a specific community of interest and often used for R&D.

USE WHEN?• To solve a specific problem with a prescribed solution• Lack expertise in-house• Speed-to-market is critical and solution involves

extensive research and possibly trials• To solve “part” of an innovation vs. development of a

product, service or model

OPEN INNOVATION

BENEFITS• Enables sharing of risk & resources with potential

partners • Provides ability to leverage proven solutions• Expands resources & capabilities in areas lacking

expertise• May reduce cost of development

CULTURE IMPACT• Provides diversity of expertise, viewpoints & ideas• Encourages sharing of knowledge• Promotes open-mindednessdedness Connectionn &

engagement with stakeholders & customers

LIMITATIONS/CHALLENGES• Requires strength in identifying, connecting, & part-

nering effectively • Potential exposure to strategies & plans to market• Requires transition & integration process with external

stakeholders• Potential for IP contamination

WHO’S GREAT AT THIS?• GE • Netflix Prize • Panasonic• P&G (Connect & Develop)

TOOLS?• Innocentive• Nine Sigma• QMarkets

CROWDSOURCED IDEA MANAGEMENT

DEFINITIONAn open-call for needed ideas or input from large groups of people, typically online communities of customers, employees or suppliers. It often takes the form of a broad-based competition that rewards participants for the production of ideas or leverages the collective intel-ligence to pick the best ideas.

USE WHEN?• Engagement and connection with stakeholders/

public collaborators is seen as an opportunity to gather a more diverse set of perspectives

• When internal teams are “stale” and want an infusion of ideas from outside

• A large volume of ideas are needed• Can be used to validate ideas during the innovation

lifecycle

BENEFITS• Can generate a large quantity of ideas typically with

low cost and with speed• Easy to execute relative to other innovation

approaches• Easy to engage many people with diverse skills,

expertise & experiences • Viewed positively by customers/market when invited

to participate• An initiative can lead to awareness building and posi-

tive perceptions of the brand

CULTURE IMPACT• Breeds a culture of ideation & idea sharing• Generates excitement and energy

LIMITATIONS/CHALLENGES• Stresses quantity over quality of ideas• Ideas generated are typically incremental vs. break-

through innovation• Difficult to assess & qualify ideas• Ideas are not always based on true needs, problems

or opportunities• Doesn’t encourage development of innovation skills

or mindsets • Crowd quickly becomes fatigued with process & lim-

ited participation ensues

WHO’S GREAT AT THIS?• Cisco iPrize• Dell IdeaStorm• IBM Jams • MyStarbucks Idea

TOOLS?• Bright Idea • Hype• Imaginatek• MindJet

OPEN

INNOVATION

CROWDSOURCED

IDEA MANAGMENT

LEAN START-UP

DESIGN–DRIVEN

CONTEXT

Top innovators know that to problem-solve and contin-uously reinvent within any given ecosystem, there is no “one size fits all” approach or methodology. A combina-tion of the approaches discussed in this paper, may yield the best results. Using the Strategic Innovation Process discussed earlier, the diagram to the right demonstrates when the approaches are best utilized at each step in the process.

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APPROACHES:

Just as the approaches to innovation cannot be “one size fits all” the tools that support those approaches cannot be either. Tools that were built and intended for crowd-sourced idea management will struggle to be useful for Design-Driven approaches and methodologies and vice versa. Tools for Open Innovation and Crowdsourced Idea Management are well known and have been deployed by most innovation teams. The desire for organizations to utilize Lean and Design-driven approaches to scale innovation is becoming more prevalent, but legacy tools are often still being utilized: paper, markers, post-it notes and whiteboards to name a few.

Given the imperatives for success and the implementa-tion of these newer approaches, teams need a tool that support those approaches. Tools that allow the diverse thinking and ability to unleash the creative mindset, while structuring and organizing information in a way that enables collaboration and develops a repository of great ideas.

Batterii is that tool. It is the only innovation SaaS platform that was built on Design-Driven principles. As a result, Batterii is a key driver in transforming the way the orga-nization thinks, works and innovates. Use Batterii to support your innovation and creative problem-solving processes, whether it’s research, trend spotting, business model development, product and service design, and concept development.

… powering your next big idea.

To learn more visit www.batterii.com or contact Shaun Chokreff at schokreff@batterii.com

TOOL

REFERENCES

1. Gittleson, Kim. “Can a Company Live Forever?” BBC News. bbc.com, 19 Jan. 2012. Web. 1 Sept. 2015.

2. Rae, Jeneanne, and Michael Westcott. “Design-Driven Companies Outperform S&P by 228% Over Ten Years - The ‘DMI Design Value Index’ - Design Management Institute.” Design Management Institute & Motiv, 10 Mar. 2014. Web. 1 Sept. 2015.

3. Pisano, Gary P. “You Need an Innovation Strategy.” Innovation. Harvard Business Review, 1 June 2015. Web. 1 Sept. 2015.

4. Palmer, Derrick, and Soren Kaplan. “A Framework for Strategic Innovation.” InnovationPoint LLC. Innova-tion-Point.com. Web. 1 Sept. 2015.

NOTES

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