By definition, "Breakthrough" innovation is more than just a new flavor, new size, new color. It's something that creates new value, new usage, new customers. Key word "New." With new comes change, risk, and a somewhat higher bar for innovation than just line extensions. Breakthrough requires a different approach, different metrics, different tools and resources to achieve on a repeatable basis.
Based on our over 25 years of innovation, we have identified a number of "Critical Success Factors for Innovation." For a full list, see our whitepaper Innovations Critical Success Factors. Here's a quick list of those that are particularly cricital for breakthrough innovation:
A compelling case for innovation – "New" means different. Different means change. Nobody likes change. So to succeed, people must understand why innovation is necessary in order to get behind the push for breakthrough.
A shared vision of the future – the purpose of breakthrough innovation in business is to generate real growth for your business. To engage in that pursuit, the company has to have an understanding of what the future might look like, and what it will need to win in that future. Old school strategy projects the future of the business based on past realities -- how we became successful today. When you attempt to predict the future based entirely upon the past – you run the risk of becoming irrelevant in the future. It’s always guesswork, but it’s essential guesswork, and can be done in an “educated” way (see: Future Pull).
An aligned strategic innovation agenda – the company has to have a sense of what business it is in, what business it wants to be in, and also what its risk-tolerance is, before it can move toward breakthrough. An innovation portfolio with 100% breakthrough is generally not right for any company – you have to know what is right for you given your aspirations and the realities of your business. To avoid the problem of short-term needs reallocating resources dedicated to long-term success, everyone must be aligned around the critical role of each part of the portfolio, and be prepared to defend the "important" against the demands of the "merely urgent."
Senior management involvement – traditional metrics cannot be applied to breakthrough innovations, because if your innovation is truly new, truly breakthrough, there is no existing frame of reference. Consequently traditional metrics are based in guesswork and analogies -- imaginary numbers. The biggest imaginary ROI or NPV wins the budget. Breakthrough is about pursuing a strategic agenda, accepting some risk, but having that clear vision for the future. Business Units are too tied to the annual plan and fixed budgets. Breakthrough requires senior management to apply their vision and their discretionary investment power to the pursuit of higher, longer-term goals..
A decision-making model that fosters teamwork – autocracy almost always misses some critical stakeholders and consensus sinks every decision to its lowest possible common denominator. A broader team has to be engaged in the process, and then a passionate “champion” has to be able to make the ultimate decisions for that team.
A creative, multi-functional team – a cross-functional, diverse representation of the company is essential, not only for the full perspective (and to enable cross-pollination), but to break down the functional silos and territorial thinking that get in the way of fully leveraging the company's assets. This approach to collaboration should also embrace outside perspectives to stretch the team to be able to see the new possibilities.
Willingness to take risk and value absurdity – this is really two in one, as risk-taking is one thing and valuing absurd ideas for what they are is another. Both are essential though, risk-taking for its strategic and cultural implications, and absurdity for its potential to take the organization in unexpected and (occasionally) highly valuable new directions. And, contrary to common belief, absurd ideas can be pursued with little initial investment.
A well-defined, yet flexible, implementation process – far too many high-potential, breakthrough ideas suffer because they are force-fit into the same pipeline and business model as the incremental. These big ideas require nurturing – a flexible process that can help these ideas evolve into something that fills a new space, and often it won’t look like it did coming in, which is a tough thing to be ok with at the front end, but at the back end, you’ll be so happy you were when you see it thrive.
What’s your reaction to these success factors? What do you think are the critical success factors for breakthrough innovation? Would love to hear your perspectives!