The 4 Major Risk Points In Implementing an Innovation Initiative

There are four aspects to an organisation’s innovation initiative:

1. the innovation driver (the reason a company wants or need to innovate, and the perceived business value of innovation),
2. the innovation strategy,
3. the innovation implementation and
4. assessment of innovation performance.

If an organisation does not identify the innovation drivers correctly, design the innovation strategy appropriately, manage the innovation implementation effectively, or monitor and assess the results of the implementation against the business goals and intended business value – then the successful outcome from the innovation initiative is at risk.

Given the levels of investment required in an innovation initiative, and its importance to the ongoing positioning and viability of an organisation, these risks must be minimised.

As is evident from global innovation surveys of CEOs by groups such as IBM, BCG, and the Economist Business Intelligence Unit, contemporary organisations are fairly clear about their drivers for innovation. By and large, the dominant drivers for innovation are above the line growth (i.e. growth that is fuelled by creating business value rather than cutting costs) and to maintain or improve a position in the marketplace in a dynamic and competitive industry.

At the other end, there is debate about whether innovation is sufficiently tied to clear organisational goals and metrics to assess whether it delivers tangible, measurable business results. If so, are businesses getting the return on investment they want and need?

If an organisation gets either the innovation strategy or the innovation implementation wrong, their innovation initiative is at high risk of failure. The innovation strategy relies on appropriate people developing a best practice innovation strategy that is right for the company and its context. The implementation is really just subject to the normal challenges for implementation of any organisational change, for example does it have executive support, does the culture support the change, how are the stakeholders impacted, does the CEO drive it actively and emphasise its importance, is the message clearly communicated, is appropriate training given, etc.

So, if an organisation’s innovation initiative fails, is it due to ‘business reasons’ or ‘culture reasons’? If we mean by ‘business reasons’ that an innovation strategy did not work for some reason related to the business context, it means essentially that the innovation strategy was poorly conceived in the first place. Well, if so, you’d expect there to be problems with it! Any culture problems, on the other hand, are more likely related to implementation issues.

The line is not so hard and fast, however: good design should take into account realities of culture at the outset.

The key message is:

in designing an innovation initiative, an organisation should take into account and plan effectively to address all 4 key risk points for the innovation initiative