Increasing the Innovation Productivity
In a 2006 article, P&G’s New Innovation Model, P&G stated that their open innovation program – along with improvements in other aspects of innovation related to product cost, design, and marketing – made their R&D productivity increase by nearly 60 percent since 2001.
When I listen to P&G talks on innovation today, the innovation productivity has nearly doubled and open innovation is a key reason for this.
Every company would like to increase their innovation productivity significantly so I am looking into how companies can do this. I am still researching and it would be great to have a discussion here on my blog. A few conversation starters:
What does innovation productivity mean?
In this video, P&G gives us some insight on innovation productivity including this quote from A.G Lafley: “…the other obvious way we measure innovation productivity is how much innovation do we generate per person and how much innovation do we generate per dollar invested in innovation.” You can read a transcript at the link.
Which other metrics can we use to track innovation productivity?
Maximizing Innovation Productivity
In this article, PRTM focuses on four areas of opportunity that offer high potential for productivity and innovation leverage but are often overlooked or underutilized by development organizations: platforms and architectures, resource management, information automation, and cross-functional teams.
To which extent does your company apply this? Does it deliver results? What else do you do?
I look forward to hearing your thoughts and input on this.
Several companies I have worked with on innovation have developed internal foundations,for want of another term. These foundations, established by the company, fund projects that fit within the established criteria, (e.g. new line of business, new customer base, under 50K for prototype, team of no more than 8 people, etc.). The success rate for the funded projects is high enough to keep them going, and they provide outlets for people with good ideas and little political savvy. It’s not at all surprising that $, resources and time amp up innovation.
Marian Thier, Expanding Thought, Inc.
* Your goal is very ambitious and difficult – to organize and institutionalize innovation, from the manager’s point of view.
* For managers, innovation is mostly trouble, because it disrupts planning and schedules and may have unexpected results; it may backfire, and where goes your career?
So it takes courage for managers to pursue innovation.
* I can share my experience as a young engineer in a large corporation which does stimulate innovation successfully:
> Senior management has an “open door” policy, where anyone can enter that manager’s office (almost) anytime unnanounced, tell of a problem or present an idea.
> There is almost always an immediate answer, so the visitor knows where he/she stands or what to expect will happen.
> Senior management walk in the couryard after lunch; anyone can accost them spontaneously and informally, to discuss anything they like.
> If the boss likes an idea, the engineer may be allocated a small team and a small budget to try to prove it.
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Marc is a patent attorney, inventor/entrepreneur and electronics engineer.
You have to move out of being efficient and into learning how to become effective. Conduct a strategic renewal exercise: 1) Begin with an honest, if cynical review of the positions of the existing products, services, business models and customer groups along extended S-curves. This will establish how long you have got before you have to do something new/ different and whether there is any point in doing more continuous improvement. 2) Capture the prevailing success formula and the driving assumptions supporting it, review these for relevance and redraft, combine to build new success formula and test its implications: then implement. Failing that either set fire to the business or hire people who don’t like you or your products to do something new.