After the Covid-19 pandemic, many corporate innovation units felt a sense of relief.

Companies were optimistic, innovation budgets grew, and there was an increased appetite for out-of-the-box innovation.

However, the business environment for corporate innovators has since shifted, and they are now being asked to do more with less.

This (economic) reality has highlighted the limitations of existing innovation systems, underscoring the necessity for a more efficient and effective approach to innovation management, as Frank Mattes and Dennis Boecker shared during a recent Innov8rs Learning Lab session.

Following a more generic call to “stop innovation theatre”, the current assignment is to create new revenue streams that contribute to top- and bottom-line in the short term.

Whilst there’s increased pressure on costs, budgets, and productivity on one hand, on the other hand, we see new challenges for corporate innovators. For example, we need to figure out what to do with AI, and sustainability is now turning from greenwashing into real innovation moves.

It's fair to say the future of our companies depend on our innovation function to deliver results. It's also fair to acknowledge results are yet lacking in most organizations.

So, to cope with the challenges from both within the company and the external environment, it's time to upgrade the innovation management system, pushing for efficiency and outcomes.

Why (Upgrade Your) Innovation Management System

Companies with an excellent innovation management system make the right decisions five times more often compared to innovation laggards.

These companies report a clear business impact from their innovation efforts, repeatedly- measured in revenues and/or transformation outcomes. Their systems work effectively and efficiently, but they are also agile enough to seize short-term opportunities.

These systems are based on a teachable process and the leadership and people/culture infrastructure, which engage staff and foster collaboration.

Ultimately, companies with a superior innovation management system make better decisions.

These decisions include the portfolio needed to translate strategy into initiatives and how to drive and scale initiatives that create new revenue streams.

Most companies have an innovation management system. However, many of these systems are often incomplete and inconsistent, lacking critical components such as effective collaboration between corporate functions and effective scaling up once validations are complete.

Most of these systems trace back to the Lean Startup. But as even Steve Blank, the father of the Lean Startup movement, notes- if you apply the Lean Startup in the corporate context, you will only get innovation theater.

Additionally, measuring activity metrics such as the number of ideas or ideation sessions does not create trust in the organization that innovation creates value in the short-term.

The primary concern for corporate innovators should be that "doing more with less" will be a stress test for home-grown systems. Many of these systems may not meet the demands of internal stakeholders, leading to severe consequences for both the company's innovation efforts and the individuals responsible for it.

The 16 Components Of a Best-in-Class Innovation Management System

As previously mentioned, companies with a best-in-class innovation management system make five times more correct decisions than those without.

A best-in-class innovation management system has 16 components that work together like a well-oiled engine, built on solid frameworks such as the upcoming ISO 56002 and the Lean Scaleup for new business building.

The first category comprises five elements that define the framework in which innovation should play out:

  • Leadership Alignment on “Now” and “New”
  • Governance
  • Context
  • Policies
  • Structures

The second category relates to core components of innovation. These six elements relate to

  • Vision and Strategy
  • Objectives,
  • Portfolio
  • Budget
  • Performance Evaluation & Monitoring
  • Processes, supporting Infrastructure and Operating Model.

Finally, the third category includes supporting elements such as

  • Tools, Methods & Process
  • Communication & Awareness
  • Culture
  • Competencies, Roles & Responsibilities
  • Continuous improvement

Central to the ISO 56002 standards framework is its emphasis on aligning innovation activities with overall business strategy. This alignment ensures that innovation efforts are not siloed endeavors but integral components of the organization’s core objectives, driving sustainable growth and competitive advantage.

Moreover, the standards advocate for a systematic assessment of innovation processes, enabling organizations to identify and address inefficiencies proactively.

An integral part of operationalizing the framework is the establishment of clear metrics and KPIs for innovation management. This focus on performance evaluation ensures that innovation efforts are measurable, trackable, and aligned with broader business goals. It also facilitates the demonstration of quick wins and tangible value, which is essential for maintaining stakeholder support and securing the necessary resources for sustained innovation.

Looking at your innovation management system overall, it’s important to realize that missing or inconsistent elements will likely lead to underperformance when having to “do more with less”; which again reinforces the need to upgrade your innovation management system.

How To Upgrade Your Innovation Management System

Attempting to construct a new, best-in-class innovation management system from scratch is not a feasible solution. The pressure to deliver innovation outcomes is too high and corporate stakeholders lack the necessary patience.

Therefore, a more intelligent approach is required.

As the Theory of Constraints suggests, to significantly enhance any system’s throughput, focus any improvement efforts on the narrowest points.

So, start by identifying and addressing the most critical bottlenecks within an innovation management system, which can yield disproportionate benefits, maximizing the impact of limited resources.

If you are compelled to upgrade your innovation management system due to the inadequacy of your current setup, there are four steps to follow.

  • Step 1 involves taking inventory of the elements mentioned earlier. Which elements are underdeveloped or missing? For each, create a “solvable problem statement.”
  • Step 2 involves the same process as external innovation: generate ideas, test and validate the most promising ones, and scale successful ideas.
  • In step 3, define improvement buckets by splitting the activities into 30-, 90-, and 180-day intervals. To prioritize these activities, use the ICE prioritization method:
    • Impact refers to the assumed impact of the activity.
    • Confidence refers to how confident you are that the activity will deliver the expected impact.
    • Ease of implementation refers to how easy it would be to implement this activity alongside the ongoing innovation work
  • In step 4 of defining your upgrade program, you should define metrics that demonstrate to you –and your stakeholders –that you are on a trajectory to deliver the benefits of having a best-in-class innovation management system.

When suggesting an upgrade to your company's innovation management system, you will face resistance and challenges.

The main challenge is the conflict between mid-to long-term benefits, which may be somewhat hazy, and short-term pain. Therefore, it is important to prepare for potential resistance and challenges. Plan for quick wins, report successes using pre-defined metrics, and actively involve critical stakeholders.

Support in Upgrading Your Innovation Management System

Are you striving for innovation excellence, driving a more effective and efficient innovation function?

We're gathering a working group of innovation leaders from non-competing organizations to support your commitment to upgrade your innovation management system, through collaborative learning sessions, selected peer benchmarking conversations as well as light advising and coaching.

Co-hosted by renowed innovation experts Frank Mattes & Dennis Boecker, participating in this program offers you a unique opportunity to

  • deep dive into best-in-class frameworks for innovation excellence
  • work with peers to benchmark and address the key improvement points in your innovation management system
  • get 1:1 feedback and guidance to turn existing contraints into levers for success

If you want to know more about the program, request a brochure and RSVP for an upcoming info session here.