Innovation: Critical Success Factors

Is your organization well prepared to innovate? A recent study by PricewaterhouseCoopers1 describes some of the structure and organizational commitment that are important for moving ideas to market. They spotlight critical success factors such as: leadership, innovation processes, culture, customer involvement, measuring results and new skills.

Leadership has two important roles: defining growth targets and molding a culture that supports innovation and taking risks. Reinforcement of behaviors such as creativity, open-mindedness and learning from failure must be strong, consistent and cascaded through all levels of management. It may take a few years for employees to fully engage, especially in a formerly risk adverse environment.

Innovation does not often come from lucky accidents. It needs a formal process for moving ideas through incubation, testing and refining feasibility and marketability, selection and scale-up. The number of people involved will grow from small teams of 5-10 to large groups needed to support commercial operations and marketing.

Current customers must be the focus of discussions about desired improvements in core products. New methods are available to uncover unmet needs of potential customers who aren’t yet purchasing.

Measuring progress and the return on innovation investment is essential. A number of measures that can demonstrate the payoff such as: percent of revenue from products introduced in the last 3 years, time to market, new product growth or profitability rate, and customer satisfaction.

Perhaps the most important success factor is employee skills. A recent Deloitte report2 states that innovation success is not limited to the work of a small team. It touches many areas of the business such as services, processes, business models, operations and marketing. Skills such as out-of-the-box and critical thinking, problem solving, risk management, voice of the customer techniques, relationship management and collaboration will increase your success rate.

New roles such as visionary, idea generator, integrator, roadblock remover and ethnographer are being recognized. You’ll probably need all of these on your innovation team.

While innovation is the goal of this article, the efforts spent developing these critical success factors will have impact across your entire organization.

  1. 14th Annual CEO Survey, PricewaterhouseCoopers, 2011
  2. Human Capital Trends 2012, Deloitte LLC, 2012

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