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leadership lab

Founder, Arrisio

So much has been said about design thinking, lean startup and agile as the way innovation should be practised. However, the organizations that have employed these strategies, including former companies I was a part of, are in a state of denial that doing these things will actually make your company more innovative.

If innovation is the act of developing new things that generate untapped value, as opposed to imagining something in a lab that ends up on a shelf, then why are we not seeing an outpouring of novel things from the organizations utilizing these practices? Why are only 6 per cent of executives satisfied with their innovation performance as reported by a McKinsey and Co. Global Innovation Survey? Why did 72 per cent of executives indicate in an Accenture US Innovation Survey that innovation opportunities are failing?

Experience as a corporate innovator in Silicon Valley, colleagues I’ve interviewed and the companies I work with have shown me that innovation today has fundamentally forgotten about organizational desire. If all you care about is coming up with and building something new, then the innovation practices cited above are great, but established companies have other things to worry about. For corporate innovation to work, anything new needs to solve problems for the company and be a suitable course for the firm to pursue.

Let me walk you through a proven methodology I developed to increase the likelihood of innovative solutions being transitioned to the organization and eventually commercialized.

Uncover organizational desire and clarify expectations

The first step is to find organizational problems that a specific stakeholder wants a solution to, and then define what that stakeholder needs to see in order to provide resources to tackle the problem. Ultimately, your goal is to establish a vested interest in the eventual solutions you generate.

Start by understanding your company’s high-level strategy, growth goals and priorities and then go below the surface to stakeholder-specific challenges to determine a way of achieving those ends. Perhaps your company wants to be the leader in a certain market and that has been tasked to stakeholders managing that market’s product portfolio. Dig into those stakeholders’ goals that they may be struggling to meet outside of day-to-day operational priorities. Maybe they need to increase the market share of their portfolio by X. Could that be done by a new product? What kind of new products were they considering? What are the unit economics necessary to warrant investment? Does it need to use a certain distribution channel, technology stack or revenue stream?

Define an area that isn’t too narrow to explore solutions and align what you need to learn and prove to warrant additional resources to pursue the problem.

Explore solutions customers desire and are suitable for the organization

With the above in hand, you can begin searching for how to solve your stakeholder’s problem. We will do that by understanding customers and building solutions they seek, while at the same time, strengthening organizational desire and proving the suitability to pursue it.

Go through the process of uncovering customer needs, problems to solve and brainstorming ideas in the area you identified, and rather than testing the ideas with customers right away, take what you’ve learned to your stakeholders for feedback. Are you still on track to solving their problem? Are they interested in your ideas? Use that input to inform how you prototype, test and iterate your ideas with customers. Once your idea is looking like a solution customers desire, review it with stakeholders again to ensure they do to.

Once you’ve arrived at a solution both your customer and stakeholder desires, you will have generated some data toward the expectations you set out, but the core of that information will relate to whether your solution can become a business that fits your company. Shift prototyping, testing and learning to answer questions such as: How will you generate value for the customer and your company? Are customers willing to pay for it? How will customers acquire your solution? How will you produce your solution? Answer these questions as they relate to your company’s capabilities and how you will either tap into them or build new based on the best interest of the firm.

At the end, your solution won’t be market ready, but the decision to put it onto the path to get there will be easier, because stakeholders have bought into it, it will integrate with your company and you’re able to show why it makes sense to pursue.

Design innovation that your organization needs

Simply building new things in a box without consideration for other organizational priorities does not work. Innovation works when you follow a process to design solutions your organization desires to pursue, because they contribute to company goals, solve stakeholder-specific problems, integrate with or augment company capabilities and have provided the data that the organization expects.

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