5 Myths About Innovation Management

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If your company’s idea of innovation is to keep funding R&D, it’s time to re-examine your understanding. Shan Rajegopal, author of Portfolio Management: How to Innovate and Invest in Successful Projects, disassembles five common myths about organizational innovation.

Myth No. 1: Innovation Is the Job of a Few People

The old mindset says that innovation is unique to a specific type of person and that not everybody can be innovative. The reality is that you need to dispel that view to work with market changes – COVID-19 being the most current.  With enough people observing and asking questions, anyone can add new value.

Forward-thinking companies have CIOs (chief innovation officers) and CKOs (chief knowledge officers) to drive innovation from the executive level. They establish and encourage cross-functional teams made of passionate experts that can execute upon approved projects. 

When you allow everybody to share their thoughts, you’ll find that people will come out with plenty of interesting ideas. The infinite library of the universe is in our own mind, and it is inherent in us.

The organization must then provide the stimulus for its employees to unveil their knowledge to spark new interesting ideas. However, they should have some sort of theme when you give people time to innovate. That way, people can spend their creative time wisely and follow up on their ideas. It helps keep people on task and prevents time from being wasted.

Photo Photo by ThisisEngineering on Unsplash.
Photo by ThisisEngineering on Unsplash.

Should I Manage Ideas Top Down or Bottom Up?

From that point, you must develop a way to capture those ideas and manage them in a systematic, transparent way. Once that process is in place, then the organization can either manage the ideas from top down or bottom up.

For the first approach, top down, executives can specify their budgets and pursue consulting on how to perform better.

For the second approach, bottom up, the culture of the organization supports people coming up with and trying out ideas. In that scenario, individuals are empowered to explore ideas that will help them improve their areas within the organization.

However, the biggest challenge isn’t finding ideas – those are plainly abundant. The real challenge comes from converting innovative ideas into innovation projects. All the creative problem solving in the world doesn’t mean anything if there isn’t any follow-through.

Myth No. 2: You Don't Need Software to Capture Innovation

This myth has a kernel of truth to it. Ultimately, it’s people that are the backbone of innovation. If your teams are small, then innovation can happen with a pen and paper.

However, most innovation cultures are large and global, and software bridges the gap between them. Innovation software’s value comes from transparency, accountability, and oversight. It allows people to facilitate communication, prioritize efforts, and manage the process. However, software is not the process itself.

The best tools for innovation are the ones that adapt to existing processes. Wholesale change is a hard sell, so it’s better to tailor a solution to their needs and company culture.

According to Fast Company, Microsoft’s Teams platform overtook Slack as the top workplace messaging app in July 2019. Back then, it had 13 million daily active users. As of this April, Teams now has 75 million daily active users. Satya Nadella, CEO of Microsoft, explained that COVID-19 spurred “two years’ worth of digital transformation in two months.”

In an increasingly remote world, people need robust platforms to communicate with each other and do their jobs properly. Microsoft’s thought process behind innovating to stay ahead of their competitors came from understanding their customers’ point of view.

“If you think about the source of innovation, it’s all about being able to meet the unmet, unarticulated needs of customers. And in order for us to be able to do that successfully, you need to have empathy,” said Nadella in an interview with Fast Company.  “[Empathy] is more about being able to let life teach you how to become more empathetic, how to listen beyond even the worlds from your customers and partners, and then innovate.”

Photo by Mika Baumeister on Unsplash
Photo by Mika Baumeister on Unsplash.

How Open Should Innovation Strategies Be?

Before you start capturing ideas, you need to understand who is part of the innovation strategy. Will it be:

  • Open to the general public?
  • Open to just the organization and its partners?
  • Open to just the organization?

For example, user reviews on Apple’s App Store weigh heavily on how well apps perform. To assist developers, Apple introduced their custom review prompts with iOS 11 in 2017. Developers could both get reviews without disrupting the experience and respond to new feedback and bug reports.

While the update prevented developers from having their own review prompts, Apple’s prompts simplified user reviews. The prompt couldn’t be used more than three times a year or be repeated after a review was submitted.

Shortly after this update, ratings spiked across the board. Instagram in particular experienced a 400% increase in just two weeks. Their average rating went from 4.4 to 4.7 stars from 2 million new reviews.

Myth No. 3: Managing Innovation is Like Herding Cats - It Can't be Done

We’ve worked in client settings where thousands or hundreds of ideas are generated every year. The leaders in innovation figured out that sparking ideas must be managed just as well as other projects or processes. If you can be flexible and allow successful innovators to do their thing, then management will be easier than you think. Rigid control over innovation activities doesn’t allow them to find new competitive advantages.

The same system that captures new suggestions should integrate with the system that evaluates and filters ideas by various criteria. Those filters will be incredibly beneficial to the person who has to decide which ideas are worth having detailed proposals developed.

After more detailed business proposals are developed for the most promising ideas, they’ll enter into the project portfolio management phase. Here, each proposal is prioritized by its potential return for the company and its fit with strategic direction.

By that point, an innovation budget will have presumably been set by company executives. That’s the portion of the budget allocated to pursuing innovative ideas. Ideas that fit within that budget can then be turned into projects or programs for execution. In turn, those will be managed the same as if they were another kind of project.

Photo by Christina Morillo from Pexels

Giving Your People the Room to Innovate

Oftentimes, the people who come up with the idea aren’t necessarily the best ones to pitch it to decision-makers. Suranga Chandratillake, president and chief strategy officer for blinkx, a London – and San Francisco-based video search and delivery service. During a back end of innovation panel hosted by MI-GSO | PCUBED and Frost & Sullivan, Chandratillake said his company places the responsibility and accountability with the individual.

„We tell people, ‚Whoever you are, wherever you work in the company, you’re allowed to have innovative ideas,’” said Chandratillake. “‘It is then your responsibility to get the attention it needs from management in order to get the resources it needs to turn it into something bigger.’“

But his company didn’t stop there. It set up an environment that encourages other people in the company to participate in that process.

„You might have a really smart person with a really good idea [who’s] incapable of presenting that in a way that makes sense to anyone,“ notes Chandratillake. “It’s up to that original person to find somebody who’s better at communication and persuade him or her to support the idea and work on it as well. So, the company provides every employee with a portion of time where they can do things off the books and try out new ideas.“

Second, people can apply for a small amount of funding to build and test a prototype. Because software can be cheap to build, the main use for those funds is to do marketing. This generates data that will allow the person to make a more structured case for additional funding.

Myth No. 4: The Benefits of Innovation Can't Always be Measured

Measuring innovation is possible, but innovation metrics require a different approach than accounting metrics. Instead, you need to measure value realization in the business proposal. That might be increasing sales, raising efficiency, avoiding risk, or improving your risk profile. The innovation might be a totally radical way of positioning a product or service, or rebranding it for different markets.

In each case, measuring innovation is possible in most (if not all) scenarios. Tracking those benefits becomes part of the project management phase, with reviews coming quarterly, half-yearly, or annually.

Photo by ROMBO from Pexels

Preventing Corrosive Behavior Through Collaboration

In addition to more accurately reflecting its value, avoiding specific measurements also strengthens cooperation. Specific measurements (like key performance indicators, or KPIs) tend to foster competition between teams. Even if it’s perceived as “healthy competition,” it can lead to corrosive behavior in the company. 

However, open innovation efforts lets everyone collaborate and iterate on each other’s ideas. It’s able to:

  • Build a strong team of creative thinkers that can handle future problems
  • Get the most out of your innovation investments

Myth No. 5: You Either Work in an Innovative Company or You Don't

I’ve worked in companies where innovation has become a “one-off” kind of process. Executives push it, track it, then seem to forget about it as they move on to other endeavors. So, yes, in that situation, your company is either innovative or it’s not.

But I also believe innovation can become part of the company’s culture. How do you achieve that?

Part 1 - Empowering Employees to Innovate

First, employees must feel empowered. They can recognize that the organization is supporting them and motivating them to do greater work. This is a key factor.

It doesn’t matter whether the organization is large or small. You have to invite employees and say, “You are the key part of the company. We have processes and tools, but they won’t work without your contributions.”

Part 2 - Keeping the Innovation Process Transparent

Second, the innovation process needs to be transparent. People need to know what happens to their ideas after they’ve submitted them. They need to believe that ideas are reviewed regularly. And they also need to see others recognized for their efforts.

The innovation may be a radical departure for the company or an incremental improvement. In either case, innovators deserve recognition and/or bonuses that reflect how beneficial their ideas are to the company. The continual message needs to be, “If you come up with good ideas, you will be recognized and rewarded.”

Remembering the Power of People

Whatever you believe about innovation management, remember that even the best processes and tools cannot replace empowered employees. Motivating them to do greater work and to make contributions for improving the company can make a huge difference. The greatness of an organization comes from its people. And that is no myth.

Dr. Shan Rajegopal

Director and Board Member

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