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

2 Responses to The 4 Major Risk Points In Implementing an Innovation Initiative
  1. Dr. Lauchlan A. K. Mackinnon
    March 6, 2007 | 4:30 PM

    Much the same applies, of course, for Knowledge Management or any other form of Organisational Development: in any major and well implemented initiative to develop organisation capacity, there is typically

    (i) a recognised business driver
    (ii) a strategy
    (iii) implementation
    (iv) assessment

  2. Sanjay Dalal
    March 17, 2007 | 10:52 PM

    Dr. Mackinnon:

    Thank you for sharing us with us an organization's innovation initiative and the associated risk points.

    I had posted similar Five Principles for Success Innovation based on my observation and analysis of the top 20 Innovators of The Innovation Index in the Innovation Index Annual Report:

    Successful business innovations that drive growth are guided by the following five principles:

    1. Vision to create new products, business models or processes that make a difference and create new markets
    2. Systematic processes and rigor that stimulate creativity and learning to execute on the vision
    3. Reward and recognition system for teams to take measured risks and experiment
    4. Focus on clear and present customer needs, the market facts, and the intangible
    5. Growth-oriented leadership that is decisive, inclusive, focused, takes risks, and has market expertise

    After reviewing your key points, I will add the Assessment to this also.

    I look forward to reading more of your blog posts in the future.

    Sincere regards,
    Sanjay Dalal

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

2 Responses to The 4 Major Risk Points In Implementing an Innovation Initiative
  1. Dr. Lauchlan A. K. Mackinnon
    March 6, 2007 | 4:30 PM

    Much the same applies, of course, for Knowledge Management or any other form of Organisational Development: in any major and well implemented initiative to develop organisation capacity, there is typically

    (i) a recognised business driver
    (ii) a strategy
    (iii) implementation
    (iv) assessment

  2. Sanjay Dalal
    March 17, 2007 | 10:52 PM

    Dr. Mackinnon:

    Thank you for sharing us with us an organization's innovation initiative and the associated risk points.

    I had posted similar Five Principles for Success Innovation based on my observation and analysis of the top 20 Innovators of The Innovation Index in the Innovation Index Annual Report:

    Successful business innovations that drive growth are guided by the following five principles:

    1. Vision to create new products, business models or processes that make a difference and create new markets
    2. Systematic processes and rigor that stimulate creativity and learning to execute on the vision
    3. Reward and recognition system for teams to take measured risks and experiment
    4. Focus on clear and present customer needs, the market facts, and the intangible
    5. Growth-oriented leadership that is decisive, inclusive, focused, takes risks, and has market expertise

    After reviewing your key points, I will add the Assessment to this also.

    I look forward to reading more of your blog posts in the future.

    Sincere regards,
    Sanjay Dalal