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Innovation: Putting Ideas into Action
American Productivity & Quality Center, APQC, May 2010, Pages: 154
Idea generation must lead to the production of valuable products and services. In 2009, APQC conducted a study of IBM, Kennametal, and Mayo Clinic, seeking to learn how these innovative organizations foster creativity and facilitate the movement of ideas into profitable products and services. This report discusses key factors that enable a culture of innovation, including organizational structures, resource allocation, technology, motivation/rewards, and leadership.
Identify and adopt common innovation success factors found within some of America's world-class organizations. In Innovation: Putting Ideas into Action, both small, less well-known companies and large, global companies demonstrate how successful innovations apply across industries, organizational sizes, product ranges, and geographic locations. Learn how best-practice organizations facilitate and embrace innovation at a fundamental level.
This report covers best practices for defining an innovation strategy, developing supporting infrastructure and processes, establishing a culture that embraces innovation, and measuring success. Included are in-depth case studies of Bausch & Lomb, IBM, Kennametal, Mayo Clinic, Procter & Gamble, and The Clorox Company.
Drawing on input from the study advisers, study sponsors, and secondary research literature, our study team identified four key areas for research. These areas guided the design of the data collection instruments and were the basis on which the study findings have been developed. The study focused on:
1. defining a strategy for innovation,
2. developing the infrastructure and processes for innovation,
3. establishing a culture that embraces innovation, and
4. measuring the success of innovation.
Defined at the beginning of this study, the objectives of this report are to enable participants to:
- gain insight into what leading-edge companies are doing to make themselves more innovative;
- examine how organizations are operationalizing their strategies for innovation;
- focus on the practical steps to transform an organization’s culture, processes, and practices so that innovation is enhanced and becomes part of the work flow;
- map the critical steps their organization needs to take to develop and execute a successful innovation strategy that contributes to consistent, above industry average growth levels; and
- learn how exemplary organizations take their great ideas and quickly turn them into increased sales and profits.
Sponsor and Partner Organizations 4
Executive Summary 7
Study Findings 15
Chapter 1 Defining a Strategy for Innovation 17
Chapter 2 Developing the Infrastructure and Process for Innovation 29
Chapter 3 Establishing a Culture That Embraces Innovation 39
Chapter 4 Measuring the Success of Innovation 51
Chapter 5 Lessons Learned from Innovation 57
Partner Organization Case Studies 63
Innovation—and the growth that results from innovation—has risen to the top of just about every corporate agenda. In today’s world, a company cannot maintain competitive advantage simply via technological superiority: Stumble for a second, and global competitors swoop into even seemingly unassailable markets. A company cannot maintain competitive advantage simply through operational excellence: As the principles of Six Sigma management continue to spread through the corporate world, operational excellence has become a corporate necessity that is insufficient to drive differentiation.
A company that develops a way to continually come up with innovative products and services, however, can distance itself from its competitors by creating wave after wave of profitable growth. Unfortunately, the corporate quest to master innovation has been a frustrating one. Some companies come up with unquestionably cool products that flop in the marketplace. Other companies cannot seem to overcome internal inertia that slows high-potential projects to a crawl. Most companies have thrown their hands up, cursing the seeming randomness and unpredictability of innovation.
This report comes at an opportune time. Innovation is a more important problem, but one that now seems more solvable than ever. Decades of research by scholars such as Robert Burgelman, Clayton Christensen, Eric von Hippel, Henry Mintzberg, James Utterback, and countless others have begun to unearth patterns common to successful innovations. Companies are beginning to recognize that there are structured approaches they can take to increase their odds of creating innovations that have meaningful market impact.
This study continues to advance the notion that there are in fact patterns for success. Although the companies in this study are from diverse industries—such as consumer packaged goods, medical services, and industrial equipment—the principles behind their innovation approaches are surprisingly consistent. They all look beyond the walls of their companies to find good ideas.
They all follow a structured approach to innovation. They all back their words with action, making innovation a central part of everything the firm does. There are definite nuances and differences, but the commonality of the patterns is an encouraging sign.
The world of innovation is complicated, and there are many mysteries that still require further investigation. The findings from this study should help any company that is seeking to rev up its innovation engine. As more companies run more experiments, we will all increase our collective confidence about what works and what doesn’t work. The world of innovation that has seemed so mysterious for so long will begin to look more ordered and structured. The companies that act now to replace chaos with order give themselves a chance to put in place the pillars of an innovation dynasty that allows them to break free from the pack of their industry.
—Scott Anthony, partner, Innosight LLC
- Bausch & Lomb
- Kennametal Inc.
- Mayo Clinic
- Procter & Gamble
- The Clorox Company