Most breakthrough innovation is developed and delivered by small and new-start companies with nothing to lose. Large corporations that are truly innovative are all too rare.

However, it need not be so. If innovation is to be sustainable in an organisation it requires a structured, repeatable process.

Which of these seven steps could your business implement to dramatically increase your chances of delivering breakthrough innovation and growth?

1. The CEO must lead the process. Symbolically, this emphasises the importance of innovation to the company, and it also encourages others to get involved. What’s more many organisational structures inhibit innovation; top-level leadership helps you cut-through and overcome these barriers.
2. Expect and welcome failure. Many businesses operate a “get it right first time” philosophy. That’s fine when you’re dealing with ongoing operations, but it simply doesn’t work when you’re trying something new. The CEO’s leadership can also help overcome a desire to be 100% right before moving, but there needs to be latitude across the organisation and an understanding that not everything will work.
3. Clarify your strategic objectives. Your managers will be able to contribute to innovation and growth if they understand your strategy. Are you clear on your target customer segments, the markets in which you wish to participate, and how you are seeking to compete and win in those markets? If so, how well have you communicated these insights to your managers so that they can turn your strategy into action?
4. Create standard approaches. At an organisational level, you will need standard approaches so that managers and teams from different parts of the business can communicate and work together. Establishing common ways of generating ideas, managing funding, reviewing performance will make it easier for you to manage a company-wide process.
5. Train managers on the process. Your people must have the skills before they can contribute to your innovation process. As they apply these skills the results will improve, but a starting point in idea generation, understanding possible prizes, project management and seeking and securing funding are all areas where some initial education will pay off.
6. Focus on rapid testing. Many large organisations agonise on a best approach. It’s far better, however, to try something out. Having a central kitty to fund simple, early prototypes (no more than a few £ thousands at any one time) allows you to test your ideas quickly with customers and give you a better understanding of what will work than a pile of academic customer research.
7. Focus on and back the winners. Rapid testing will give you a feel for what will work and what won’t. This enables you to then focus on the winners. At this point you can create a balance between those ideas that are likely to give a rapid payback (say, less than 12 months) and those which will require a longer-term investment.

© Stuart Cross 2010. All rights reserved.

How effective is your organisation at innovation? Why not take my quick innovation scorecard test, and see where your approach to innovation is working and where there is further work for you and your team to do.

Simply score yourself and your organisation from 0 to 5 for each of the statements below, where ‘0’ means you strongly disagree with the statement, and ‘5’ means you strongly agree with the statement.

After completing the survey sum up your total score and find out what it means for you and your company by comparing to the summaries below.

1. Do You Have An Innovation Mindset?

1. Ambitious goals. We set demanding future goals that are a constant focus for everyone in the business.
2. Broad scope. We don’t just seek to create similar products or slight enhancements, but want to create entire new businesses and product categories, attract new customers and enter new markets.
3. Willing to experiment fearlessly. We recognise that failure is inevitable in any new venture. We use trials and prototypes to learn as rapidly as possible, and pursue our most promising ideas until we find a solution that works.
4. Real customer insight. We don’t just rely on asking customers what they want; instead we find new ways to discover their real unmet needs and are constantly asking ourselves how we can make their lives better.

2. Have You Created An Innovation-Focused Organisation?

1. Systematic approach. We have clear, practical and effective processes and systems for generating, evaluating and investing in new ideas and innovations.
2. Broad engagement. We involve the whole organisation in identifying and pursuing new opportunities. No one is excluded from the process, and we invest in skills and capabilities accordingly.
3. External relationships. We don’t try and do it all internally, and work with external partners to identify and drive new growth.
4. Performance management. A key element of the rewards and career progression of our people is based on their ability to develop and deliver new business growth and ideas.

3. Are You Actively Driving Innovation?

1. Strategic Alignment. We have identified critical and focused areas for innovation that are in line with our broader strategy and do not scatter our efforts too widely.
2. ‘Stealing’ Ideas. We don’t just focus on our immediate markets for ideas, but actively seek new ideas from other industries and markets.
3. Exploiting the unexpected. We use any unexpected success or failure – both our own and other organisations’ – as a starting point for idea generation.
4. Exploiting external changes. We actively track customer, social, economic and technology trends and changes to identify new ideas.

4. Are You Delivering Results Through Innovation?

1. Sales and profit impact. Over 40% of our sales and 30% of our profits come from products and services that we have introduced in the last three years.
2. Brand enhancement. Customers and staff are attracted to our business, and remain loyal to us, because of our track record of innovation.
3. Innovation pipeline. Our current pipeline of new innovations is likely to grow the business by over 25% in the next 2 or 3 years.
4. Company value. Our excellence in innovation is currently rewarded by an advantaged competitive position and a premium in the value of our business.

WHAT YOUR RESULTS MEAN

Your score is less than 40

Although you may believe that innovation is important for your business, you are simply not walking the talk. You continue to play it safe and focus on making minor improvements to existing products, services and processes. You need to find ways to increase your organisation’s appetite to experiment with new ideas, its willingness to accept and manage failure with new ideas and its commitment to build the processes and capabilities necessary to drive the profit growth that the leading innovators enjoy.

Your score is in the range, 40-65

Your innovation processes may be reasonably strong, yet you may find that you are not making major advances. You are likely to be overly focused on pursuing initiatives that deliver incremental growth, and are reluctant to make the bigger steps that will take your business into new markets. You should look at ways to increase your appetite and ability to take on and manage the risks of bolder innovation activity.

Your score is more than 65

Your company is set up to develop and deliver true innovation into your markets. You are likely to be seen as a leader in your market and achieve results that are superior to your competitors. The key watch-out going forward is to ensure that your innovation remains relevant in the context of fast-changing business environments. Remember, nothing fails like success, and you must ensure that you continue to be proactive in raising the bar and driving future growth.

© Stuart Cross 2010. All rights reserved.

Sometimes it’s hard to generate new ideas for growth. You need a different way of thinking to make the breakthrough.

One technique I use with my clients when developing new growth opportunities is called Brand Takeover. It asks managers to speculate about what would happen if a leading brand and management team from a completely different sector were to be parachuted into their business.

It needn’t be Apple, of course. How about Ryanair, McDonalds, BMW, Swatch, Virgin Atlantic, Tesco, Ferrari, Dell, Google, the Marines, BSkyB, the Girl Guides, Ikea, FC Barcelona, Nike, Aldi, McKinsey or John Lewis?

This technique always provides the stimulus to unleash a stream of new ideas and possibilities. Why not use it in your next brainstorming session?

I have more ways to identify radical new growth opportunities in my free download, Breakthrough! How To Run A Fantastic Ideas-Generation Workshop.

© Stuart Cross 2010. All rights reserved.