Why is it important to define innovation? How do you measure innovation? How do you collect ideas from your customers?

These are just a few of the thought-provoking questions that came up in conversation between Innovation Managers from around the world in BlueCallom’s Innovation Thought Leader Circle (ITLC) in April. The ITLC is a virtual gathering of international innovation professionals with a diverse range of experiences with the goal of exchanging ideas and furthering learning within the discipline of innovation. 

What is Innovation and How to Measure It? 

Surprisingly, there is no one-size-fits-all definition to describe the term ‘innovation’. In the software industry alone, “there are more than 30 definitions of innovation” says Axel Schultze from BlueCallom. Without a universally accepted definition, companies will have different experiences in how they identify opportunities for value creation, develop an innovation process, and measure its success. 

Defining the concept of innovation will influence how an Innovation Manager is able to “implement the idea of innovation into the organization” as mentioned by Wolfgang Zondler from Zondler Consulting. To proactively confront challenges in considering how to measure innovation, Tony Namulo from Tavalé recommended an approach to clearly define what innovation means within your organization and relevant indicators to track its success by looking at it “what problem it is you’re trying to solve”.

 The goal is to gain a common understanding of innovation, while taking into account that variables such as industry type or firm maturity will influence the understanding of innovation, according to Alkan Dogan from Simmons & Simmons. He also added that “‘innovation should not entirely be focused on generating ideas and implementing them no matter what,” but rather for Innovation Managers to be selective about what ideas to pursue.

Kevin Minier, Health and Social Care Advisor, also recommended that your organization’s ethics should play a role in defining innovation.

Fiorella Vari Castro from Sportradar discussed how to define innovation within an organization by breaking apart the concept into three types: incremental (improvements to an existing product or service), strategic innovation, and disruptive innovation.

According to Schultze, disruptive innovation can be considered as when “you build something new…new market segments, new behaviors, or new needs.” But, defining innovation can be controversial because it depends on the perspective of the end-user, as discussed by Namulo, in judging whether something is truly transformational or not. As a result, the concept of innovation is perceived differently by alternate groups of people, just depending on their life experiences. 

Interestingly, Namulo introduced a very cool strategy to describe the concept of innovation: rather, “define the opposite of what it is not”. By providing a point of contrast and defining what “does meet the definition”, innovation can be better understood, according to Namulo.

 “What are the key performance indicators for innovation?” asked Schultze. It’s an important question because the chosen metrics or KPIs will influence and incentivize employee behavior and how innovation is managed. To provide an example, a company that measures its level of ‘innovativeness through the number of patents will incentivize employees to produce patents, but “how does this affect customer satisfaction?” questioned Namulo.

Furthermore, KPI considerations include: “Did [the innovation] improve outcomes? Did it make the company more profitable?” as pointed out by Minier. 

 

Innovation Culture is Key 

A key takeaway from the conversation revolved around the importance of cultivating company cultures to support innovation, with special attention to assembling diverse teams. Diversity is required to protect against groupthink and linear thinking,” said Minier.  This thought was also echoed by Vari Castro, who said that “having an innovation team with background diversity helps so much to come up with different ideas.” 

But in order to reap the benefits from a group of diverse thinkers, a company should invest in building up an innovation culture that makes productive exchange possible.

Mikel Mangold from Venture Lab at NGK mentioned the need for “collisions and confrontation” to create a productive dialogue with different perspectives. Fostering an environment where creative abrasion can occur leads to more innovative thinking through diversity in thought. Of course, the challenge is then extending this innovative mindset from within the bounds of an Innovation Team and how to “foster culture within the company?” as asked by Vari Castro.

It’s an intriguing question, and one that we may be exploring during our next Innovation Thought Leader Circle on June 11. 

The team at BlueCallom will continue the Innovation Thought Leader Roundtable exchange. If you are interested in joining our next by-invitation-only event, please send us an email: tanja@bluecallom.com

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