There is a joke about this man in Jerusalem that went every day, for twenty years, to the wailing wall, with a single prayer - to win the lottery. Exasperated, the angel in charge pleads God to let him win. “I really want to”, God replied, “But he never buys a ticket.”
This, in a nutshell is why processes matter. A goal and an ambition are all very well, but even divine intervention will not help where there isn't a process.
Of the three elements that make up innovative companies: strategy, culture and processes, the latter is considered the dullest. That is lazy thinking. For the many companies that strive for operational excellence, their processes is what differentiates them. And for large tech conglomerates, often how they innovate.
So which processes are important for innovation?
The first group pertains insight generation. Companies have to understand their customer's needs if they have any pretense of selling anything. Most insights are pretty obvious and result in sustained innovation and product extension. A minority are revolutionary leading to disruptive innovation and greater financial rewards. Sadly, such exceptional snatches of brilliance, which are often an amalgamation of different insights, cannot be (as much as I am aware) made repeatedly – hence they are rare. But by collecting and analyzing information from consumers, the market and developments in technology, society and the economy, companies can get very far.
For example, customer helpline queries and online search terms provide ample clues about what consumers find bothersome in the current product range. Companies should make it a regular process to burrow through such datasets to understand consumer real needs.
A second group involve identifying, qualifying and validating all assumptions that underline the development of new products, services and external communications. There is a trove of literature covering methods for handling assumptions validation. My favorites are those by Alex Osterwalder and co-workers of Strategyzer
The third group of processes concerns ideation and selection. Every innovation begins with an idea. There are many methods for collecting ideas, from an idea box to a hackathon. All are welcome, so long that ideas are being collected, categorized and evaluated. Based on the company selection criteria (Defined by the strategy) some ideas should be elevated to trials. Each of the items mentioned is a bona fide process. There are (Saas) tools available for managing such processes, providing the company and employees with transparency on what is being developed and at what stage of development it is.
A fourth group of processes concerns dormant asset management. Companies own, control and produce assets that are underutilized. Waste products might earn a buck instead of being discarded. Departments providing services within the company could earn extra by providing services externally. Patents and IP must be managed to the companies advantage. Compare the transformation of Fujifilm with the sorry state of Kodak. Or view how Amazon created a completely new revenue stream with AWS. Both are examples for companies finding new markets for underutilized intellectual assets and capabilities.
Then there is the process of process improvement. Continual revision and improving of internal operations to make them faster, more efficient and cheaper. Most production and supply chain innovation fall under this category. It perhaps goes without saying, this also applies to any supporting processes from HR to finance.
And finally there is the matter of communication and brand management. This is not strictly an innovation process, but innovation success depends on it. Would the iPod, iPhone and iPad been a runaway success without the marketing muscle of Apple? I doubt it. Innovation (other than inventions) is about value creation. If innovation is to make an impact, customers must be aware of it. Many innovations fail for lack of consumer awareness. This is why startup incubators and venture capitalists hone and prize the founders pitching skills.
So are your processes up to date?
Two9Six consultants have a (free) tool to evaluate your business and innovation maturity based on the strategy, corporate culture and processes. This can be used to assess your current maturity level and identify the gaps toward bringing your company to the higher maturity level. Also by applying design thinking and blue ocean mindset we developed a comprehensive tool to better identify unaddressed needs of stakeholders – and specifically consumers.
Feel free to contact me about this article or any of the issues raised. I’d be happy to hear your opinion.
Read more of my articles on innovation here