MIT MDP CM

7/28/2019 MIT MDP CM

1/10

1. Innovation's Nine Critical Success Factors: By Prof. Vijay Govindarajan

Your organization won't innovate productively unless some underlying factors are ingood shape. If "10" is outstanding and "1" is poor, how do you rate your organization on

each of these?1. A compelling case for innovation.Unless people understand why innovation is necessary, it

always loses to core business or the performance engine in the battle for resources. The

performance engine is bigger, is the center of power, and can justify resources based onshort term financial results. So the case for innovation has to be made, and it better be

compelling.2. An inspiring, shared vision of the future.Most companies anticipate the future based uponthe past. Not surprisingly, the company always looks relevant in that future. However, if

the past is suspended and a holistic view of the future is envisioned, then it's easier to

recognize tidal forces of change and (surprise!) the company may not look so relevant inthat future. For this process, it is best to take a 10-20-year perspective. It is not about

predicting the future. It is about developing hypotheses about the future.3. A fully aligned strategic innovation agenda.As the Cheshire Cat said toAlice, "If you don't

know where you're going, any road will get you there." Innovation is a journey into theunknown and there are many paths open to the innovator. Before starting it is essential to

know things like: 1) What business are we in now and want to be in going forward? 2)

What is our risk tolerance for pursuing big, game-changing ideas? In our experience, the#1 reason why game-changing innovation fails is because time is not invested up front to

align the organization behind one strategic innovation agenda.4. Visible senior management involvement. Incremental innovation can be pushed down into

the organization where the strategy is clear, decision metrics are understood, andmanagement models likeStage-Gatecreate a level playing field. However, for game-

changing innovation it's the opposite. The strategy is fuzzy, and traditional metrics can't

be applied early in the process, because that which is truly new has no frame of referencenor benchmark. So Stage-Gate models can unintentionally kill potentially big ideas. The

pursuit of game-changing innovation only works when the person who can say yes to big

spending visibly sponsors and participates in the work and provides air cover to the workteam.5. A decision-making model that fosters teamwork in support of passionate

champions.Breakthroughs cannot survive without a decision-making model that isdifferent from the one used for incremental innovation. It's not about metrics; it's about

"the educated gut." Old models don't work. Autocratic decision-making fails to engage all

of the critical stakeholders, while consensus sinks every decision to its lowest possiblecommon denominator. It doesn't work without a passionate champion who can makedecisions and engage the team to support those decisions.6. A creatively resourced, multi-functional dedicated team.The best teams have three

ingredients: project champions who can make decisions during working sessions andadvocate for them with executive sponsors, relevant capabilities and expertise, and nave,

seemingly irrelevant diversity. Most often a breakthrough starts with the nave and then

the experts determine how to do it.
http://en.wikipedia.org/wiki/Alice's_Adventures_in_Wonderlandhttp://en.wikipedia.org/wiki/Alice's_Adventures_in_Wonderlandhttp://www.stage-gate.com/http://www.stage-gate.com/http://en.wikipedia.org/wiki/Alice's_Adventures_in_Wonderlandhttp://www.stage-gate.com/


2/10

7. Open-minded exploration of the marketplace drivers of innovation. Organizational change isdriven by marketplace factors: customers, competition, government regulation, and

science and technology. Only by exploring these drivers of change can a company beginto recognize what it must do to be relevant in its envisioned future.8. Willingness to take risk and see value in absurdity. Albert Einstein once said, "If at first anidea doesn't seem totally absurd there's no hope for it." Innovators understand that you

have no choice; you must take risks, often big ones, by moving toward the absurd, the

"seemingly" irrelevant, in order to create pre-emptive competitive advantage whilecompetitors move in the "obvious" direction.

9. A well-defined yet flexible execution process.Companies that have been in business for a

while are good at executing on small, incremental changes. And that's challengingenough. What they don't know how to do is nurture, support, and modify potentially big

new ideas with a more flexible execution process. There are three elements to innovation

execution. First, build a dedicated team for innovation. Breakthroughs cannot happeninside the performance engine it is built for efficiency, not for innovation. Second,

link the dedicated team to the performance engine so that it can leverage key assets of the

core business. Third, evaluate the innovation leader for managing disciplined

experiments, not for hitting short-term profit goals.

If your personal ratings total more than 70, you work in a pretty innovative environment.

If your ratings fall below 70, then you may want to think about how well you are poisedfor the future.

2.Innovation Management: Creating the Conditions for

Success.by Susan Abbott, of Abbott Research & Consulting for Schulich Executive Education

Centre, Schulich.

In this first segment of a research program sponsored by Schulich Executive Education

Centre and conducted by Poststone and the Glasgow Group, a panel of executives fromdiverse sectors identified organizational culture and leadership as the necessary and

essential foundations of innovative organizations.

The home run innovation is less important to business success than continuous innovationthat touches all business processes. Too much focus on creating breakthrough product

innovations is actually detrimental to building an organization climate where innovationin all its forms can flourish.

Innovative organizations create a climate that supports open sharing of ideas as a dailyexpectation, where there is sufficient transparency, visibility, and support that individuals

at all levels are motivated to move the status quo.

Executives need to spend more time at all levels of the organization to be informed, andto focus on customer needs and outcomes as a mobilizing force for innovation. The fast

pace of business tends to encourage people to stop too soon in the development stage:


3/10

executives can support innovation by suggesting the longer time frames necessary to

develop substantial improvements.

As a label,innovationcarries considerable baggage;doing things betterin every dimension isa better. description of the path of the innovative organization.

Innovation is all about culture

Innovation is a hot topic in business today, but it has more to do with culture and

discipline, not breakthrough products. At the inaugural session of new research oninnovation sponsored by Schulich Executive Education Centre, executives gravitated

over and over to the foundational role of organizational culture and leadership in creating

the conditions necessary to support innovation.

While the business literature is rife with models of innovation the Venn diagrams, asone put it, there is relatively little about how to actually implement. Doing innovation

well means getting past the myths, eliminating the organizational barriers, and focusing

analysis and attention on the customer. Innovation is much less about the breakthrough

idea than it is about evolution and execution.The Innovative Organization: People in Dialogue

Asking people to be creative and innovative on demand at special events is not ashortcut to building an innovative enterprise. The challenge for leaders is to get people

talking and to keep them talking as part of the day-to-day activity:Historically, weve seen innovation as a strategy. It should be seen as a dialogue, a process. Peoples

ability to think and relate becomes the sustainable competitive advantage, not the specific innovation.

Executives in innovative organizations focus on setting the conditions where people can

make their best contribution appropriate to their level in the organization.One executive noted that a side-benefit of his occasional smoking habit was the

opportunity to interact informally with all levels of the organization, and learn whats

really going on. Walking across the shop floor every day isnt enough there must be

real conversations that bring fresh perspectives to leaders.By opening the door to staff to speak off the agenda frequently, a leader can get past the

information filters that the organization sets up:At the end of every meeting, I ask, are there any other conversations we should be having? I always get

something.

De-bunking the Myths of Innovation

The new product myth

There is a strong tendency to focus on product innovations, however executives generallysee this type of innovation as highly visible, but not necessarily critical to business

success.Much more important is the steady focus on improving all operations, all businessfunctions and all areas of the enterprise in a consistent and sustained fashion.

The breakthrough idea myth

While creating the environment where your staff will speak and tell you their ideas

received considerable emphasis, the idea itself is rarely sufficient. Canada was noted as


4/10

the home of many good ideas that have not had enough sustained effort, persistence and

resources to achieve results.

Adapting to environmental changes, and imitating good ideas found in other domains aremore important to successful innovation than thinking of things that have never been

done, and more likely to be successful in execution:A lot of innovation is imitation. You need to think big enough, and then use the tools to get there, not

figure out a new way to do things.

The creative chaos myth

Many business processes support innovation better when they are consistent and

measurable. With a consistent and known process, ideas for change can be implemented

in a way that employees can understand and execute successfully. The new process canthen be integrated into routine and evaluated.

Without a consistent baseline to build on, its difficult to see if a new idea would work,

and just as difficult to implement successfully.Measurement is actually central to motivation; by measuring how long processes take,

and seeing how much things cost, we are encouraged to seek new ways.

The creative individual myth

The power of creative individuals with insight is rarely enough to move the organization,

regardless of the levTel of seniority. High-potential young managers cannot sally forth as

ambassadors for a new order and meet with success. The whole organization needs to bemobilized, through accountability at all levels.

Leaders recognize that they themselves may generate exponentially more ideas not all

of them good ones than the organization can execute. The critical issue is to select keypriorities and resource them appropriately.

What Works Focusing on Customers

Executives acknowledged that business has had to learn these lessons many times, and

the need to create a culture where innovation can thrive is not new. A big part of the

leaders role is to distract the organization away from itself and its own inner workingsand dynamics, and shift the focus to customers, creating the openings where innovative

ideas become possible.

Allow enough time

The rapid pace of business tends to create an overload of initiatives and a rush tocomplete projects as quickly as possible, and creates a significant barrier to sustainable

progress.

Business moves too fast; you need tenacity to innovateOne approach recommended is for leaders to lengthen the time for goal achievement, and

encourage staff to spend the necessary time thinking deeply about a problem, gathering

data, and moving forward in a thoughtful way:People tend to give up when they cant get results quickly. You need to give longer goals, give people

time, and ask them to do it slowly and thoughtfully.

Generating good ideas is not always the issue: prioritization and resourcing of a few keyinitiatives is often more important in making significant progress.


5/10

Find the metrics that drive the business

An abundance of reporting and data can sometimes mask the important trends and

patterns. The ad-hoc measurements that individuals create for themselves often revealmore about key drivers of the business than standardized reports. Pushing for greater

sophistication and perspective in data analysis is another way leaders can demonstrate the

need for fresh thinking about customers, products and processes.Return on investment (ROI) is not the right measure to drive innovation, and emphasizing

ROI can shut down needed investment in innovation. Executive teams must find ways to

focus on harder-to-define measures, often customer focused, that are more critical for thefuture.

Keep a sustained focus

With so much focus on the cultural underpinnings of innovation, effective management

of organizational change was a recurring theme.Senior managers can lose interest in major cultural transformation efforts after a few

years, especially if they havent seen much impact. But cultural change efforts can take

five to seven years to take hold. Even getting the message out to a large and complex

organization can take two to three years just as the change is gaining traction, thetemptation to change course is strong.

By developing scorecard metrics that measure the culture change desired, leaders can

help people stay on course with longer term efforts.

Tenure helps sustainability, turnover doesnt

Organizations where executives have longer tenure may be able to more consistently stay

on a path to success: Tim Hortons and Apple Computer are instances where executives oflonger tenure have created cultures that can sustain consistent innovation.

By contrast, organizations that habitually move and promote managers within short time-

frames can be rife with promotionalism where managers motivated to get promoted aim

for visibility rather than sustainability.

The governance traditions of military organizations, governments and crown corporationstend to make these organizations exceptionally good at perpetuating the status-quo, and

may lack the clarity of metrics that is often used by the private sector to mobilize change.Where leaders think people are waiting them out, they need to address this issue

directly.

Visibility and accountability

One of the remedies for organizational inertia is creating sufficient visibility andaccountability for innovation among managers that people feel motivated to take risks:Anonymity in an organization is not a good environment for innovation

Get gentle, not tough

Stereotyped get-tough leadership approaches are a barrier to innovation and effective

implementation of change. Enlisting genuine support for new ideas is critical:Its not enough to tell people; you need to sell them on the strategic thinking behind the change.

One executive described it as leading gently: being clear about the direction, but also

providing as much support as possible.

Toyota is noteworthy for their ability to return to first principles and rethink basicassumptions, in part because they normally solicit input from all affected levels of an

organization in how to make things work better.


6/10

Lets stop calling it innovation

Innovation is a word with considerable baggage that deflects people away from the

central challenge of doing things better and better. Leaders need to provide a newcontext, a better framing, so that people stop seeking the home run innovation, and have

the confidence to move forward. Being attuned to the environment, then molding and

melting the organization to adapt to those changes, is the critical organizational skill ofinnovation.

3.What is Organizational Innovation?ByRuth Kustoff

Defining InnovationOrganizational innovation refers to new ways work can be organized, and accomplished

within an organization to encourage and promote competitive advantage. It encompasses

how organizations, and individuals specifically, manage work processes in such areas as

customer relationships, employee performance and retention, and knowledgemanagement.

At the core of organizational innovation is the need to improve or change a product,process or service. All innovation revolves around change - but not all change isinnovative. Organizational innovation encourages individuals to think independently and

creatively in applying personal knowledge to organizational challenges. Therefore,

organizational innovation requires a culture of innovation that supports new ideas,processes and generally new ways of "doing business".

The Benefit of an Innovative Organization:

In promoting a culture of innovation organizations should foster:

- Cross functional team building while discouraging silo building

- Independent, creative thinking to see things from a new perspective and putting oneselfoutside of the parameters of a job function

- Risk taking by employees while lessening the status quo

The value and importance of knowledge and learning within organizational innovation iscrucial. If innovation is about change, new ideas, and looking outside of oneself to

understand ones environment, then continuous learning is a requirement of organizational

innovation success.The value of learning and knowledge can only be realized once putinto practice. If new organizational knowledge doesn't result in change, either in

processes, business outcomes, or increased customers or revenues, then its value hasn't

been translated into success.

The road to organizational innovation lies in the ability to impart new knowledge to

company employees and in the application of that knowledge. Knowledge should be usedfor new ways of thinking, and as a stepping stone to creativity and toward change and

innovation.

Steps to Innovation
http://ezinearticles.com/?expert=Ruth_Kustoffhttp://ezinearticles.com/?expert=Ruth_Kustoff


7/10

To determine how supportive your current environment is in fostering innovation

read the frequently asked questions and answers below, about how to build an

organizational culture that encourages innovation.1) Is a climate of innovation supported by senior management?a. That means, that such activities as risk taking and small ad hoc work groups that

brainstorm and talk through ideas need to be promoted, supported and encouraged in theorganization.

2) Do managers routinely identify and bring together those individuals moreoriented toward innovation those willing to think new ideas and act on them?

a. Identifying new thinkers and individuals oriented toward change helps to ensure an

outlet for innovation by supporting these individuals and giving them and like-minded

colleagues the time and opportunity to think creatively. This is tantamount to becoming

an innovative organization.3) Is there a process in place monitoring innovation teams and identifying what hasand hasn't worked as a result of them?

a. Maintaining and monitoring innovation is important. This requires checks and balances

that identify how innovation is developed and managed and processes that capture whatdid or didn't work. In order to be able to continue to innovate in a changing environment,

continually monitoring the internal and external environment to determine what supportsor hinders innovation is a key.

4) How can an organization be strategic and focused on it goals yet build anddevelop an innovative culture?

a. The value of a strategic focus remains important to a company's success. In fact, clear

direction and understanding of a company's mission can help fuel innovation - by

knowing where in the organization innovation and creativity would provide the most

value. An innovative organizational culture creates a balance between strategic focus, andthe value of new ideas and processes in reaching them.

5) Is there a single most important variable or ingredient that fuels an organization

toward an innovative culture?

a. Similar to other successes of an organization, what drives innovation are the people of

the organization. First, management must set the expectation of innovation and creativity

and then "doing business" is about how to improve processes, products and customerrelationships on a day-to-day basis. This mindset itself will create an ongoing culture of

innovation.

Article Source:http://EzineArticles.com/?expert=Ruth_Kustoff
http://ezinearticles.com/?expert=Ruth_Kustoffhttp://ezinearticles.com/?expert=Ruth_Kustoffhttp://ezinearticles.com/?expert=Ruth_Kustoff


8/10

4. European Foundation for Quality Management (EFQM) ExcellenceModelPrimary purpose

The European Foundation for Quality Management (EFQM)Excellence Model, is a self-

assessment framework for measuring the strengths and areas for improvement of an

organisation across all of its activities. The term excellence is used becausetheExcellence Modelfocuses on what an organisation does, or could do, to provide an

excellent service or product to its customers, service users or stakeholders.

While its origins lie in the private sector, public and voluntary sector organisations canalso benefit from using theExcellence Model. It is non-prescriptive and does not involve

strictly following a set of rules or standards, but provides a broad and coherent set of

assumptions about what is required for a good organisation and its management. Eachorganisation can use it in its own way to manage and develop improvement, under the

control of those who use the methods rather than an external evaluato

The Model starts with the following premise:Customer1 Results, People Results and Society results are achieved through Leadership

driving Policy and Strategy, People, Partnerships and Resources leading ultimately toexcellence in Key Performance Results.

Figure 1: The Excellence Model Framework

Source: http://www.bqf.org.uk/ex_framework.htm

There are nine big ideas or criteria in the Model that underpin this premise and attemptto cover all an organisations activities. These nine ideas are separated into Enablers and

Results. The Enabler criteria are concerned with how the organisation conducts itself,

how it manages its staff and resources, how it plans its strategy and how it reviews andmonitors key processes.

They are:1. Leadership

2. People

3. Policy and strategy

4. Partnerships and resources

5. Processes
http://www.proveandimprove.org/new/tools/efqm.php#SectionFootnotehttp://www.bqf.org.uk/ex_framework.htmhttp://www.proveandimprove.org/new/tools/efqm.php#SectionFootnotehttp://www.bqf.org.uk/ex_framework.htm


9/10

The organisations Results are what it achieves. These encompass the level of satisfaction

among the organisations employees and customers, its impact on the wider community

and key performance indicators.

They are:

6. People results7. Customer results

8. Society results

9. Key performance results

Each of the nine criteria is subdivided to describe in more detail the concept of

Excellence in that area and to examine how well an organisation is doing through a listof practical questions to ask itself. The starting point for most organisations is to gather

evidence relevant to the nine criteria of the Model. This involves asking, for each of the

criteria, How good are we and how could we improve? Evidence may take a variety of

forms depending upon the organization.

Fundamental Model Concepts

Results Orientation

Excellence is dependent upon balancing and satisfying the needs of all relevant

stakeholders (this includes the people employed, customers, suppliers and society in

general as well as those with financial interests in the organization).

Customer Focus

The customer is the final arbiter of product and service quality and customer loyalty,

retention and market share gains are best optimised through a clear focus on the needs ofcurrent and potential customers.

Leadership & Constancy of PurposeThe behaviour of on organizations leaders creates a clarity and unity of purpose within

the organization and an environment in which the organization and its people can excel.

Management by Processes & Facts

Organizations perform more effectively when all inter-related activities are understood

and systematically managed and decisions concerning current operations and planned.improvements are made using reliable information that includes stakeholder perceptions.

People Development & Involvement

The full potential of an organizations people is best released through shared values and aculture of trust and empowerment, which encourages the involvement of everyone.

Continuous Learning, Innovation & Improvement

Organizational performance is maximised when it is based on the management andsharing of knowledge within a culture of continuous learning, innovation andimprovement.

Partnership Development

An organization works more effectively when it has mutually beneficial relationships,built on trust, sharing of knowledge and integration, with its Partners.


10/10

ENABLERS - how we do things RESULTS - what we target, measure and

achieve

LEADERSHIP - How leaders developand facilitate the achievement of the

mission and vision, develop values

required for long term success andimplement these via appropriate actions

and behaviors, and are personally

involved in ensuring that theorganization's management system is

developed and implemented.

CUSTOMER RESULTS - What theorganization is achieving in relation to its

external customers.

POLICY & STRATEGY - How theorganization implements its mission and

vision via a clear stakeholder focused

strategy, supported by relevant policies,

plans, objectives, targets and processes.

PEOPLE RESULTS - What theorganization is achieving in relation to its

people

PEOPLE - How the organizationmanages, develops and releases the

knowledge and full potential of its

people at an individual, team-based andorganization-wide level, and plans these

activities in order to support its policy

and strategy and the effective operationof its processes.

SOCIETY RESULTS - What theorganization is achieving in relation to

local and international society as

appropriate.

PARNERSHIPS & RESOURCES -How

the organization plans and manages itsexternal partnerships and internal

resources in order to support its policyand strategy and the effective operationof its processes.

KEY PERFORMANCE RESULTS -

What the organization is achieving inrelation to its planned performance.

PROCESSES - How the organization

designs, manages and improves its

processes in order to support its policyand strategy and fully satisfy, and

generate increasing value for, its

customers and other stakeholders.

MIT MDP CM

Documents

Transcript of MIT MDP CM