Philipp Wagner, Advisory Services, EY
misconception about mobilizing innovation?
naturally follows a certain flow of steps from the identification of a need to
idea development, through to implementation and launch. Many companies have
very elaborate process models in place through which they pursue all their
innovation activities. But, often, the results leave room for improvement and
the usual approach of refining the process does not do the job. Innovation
certainly needs structure and guidance, but also room for flexibility and spontaneity.
to generate products (or services) that provide better value to customers and
induce them to buy. However, when trying to decide what to do differently,
companies often focus too much, if not exclusively, on their existing products
and ask customers what could be done better, usually resulting in small changes
rather than truly new offers. As a result, innovation and growth potential are
shift the focus on to the problem that the customer is trying to solve, or the
jobs they are trying to do, by using the products. They don't specifically want
to use an electric drill; they want a hole in the wall. And, actually, not even
that, but to hang a picture on the wall or, even further, make their home a
nicer place. So, leaving the product behind and focusing instead on the
problems of customers opens a whole new perspective and greater innovation
ultimate goal of all corporate activities, and innovation activities are
therefore required to stand the test of KPIs and performance measurement. And
rightly so. Yet, all too often, a disproportionate focus on performance leads
to the application of restrictive KPIs and the expectation that innovation can
happen quickly, without risk and without
bigger investments, people and financial wise. As a result, innovation, usually
very nascent and fragile, is suffocated. To do it right, innovation needs
endurance and commitment of resources.
for fueling forward the innovation engine, in your experience?
dilemma of allocating their scarce resources to two kinds of innovation: incremental
development of existing offers and the development of truly new, radically
different offers. Systems, such as existing processes and performance
measurement, are built to facilitate the first, but we often see that the more
radical innovative efforts are stifled by the innovation management system.
Companies need to find ways to balance both, defining strategies, systems and
processes to facilitate radical, as well as incremental, innovation.
needs creativity and flexibility, it also needs strategic focus. We often see
that important fields of innovation do not appear on companies' agendas.
Increasingly, innovation is stirred by disruptive technologies and business
models. As long as these are not understood from a strategic point of view and
do not receive a prominent place in the innovation strategy, moving from a
reactive response to a more proactive mode will remain difficult.
developments we have seen in technology and business model innovation are very
different from those that established companies are familiar with and
proficient at adopting. New technological competencies are needed, and new
markets need to be understood. This is hard enough. But it seems that in
addition, the existing ways of managing innovation are not appropriate for
dealing with these new challenges. As companies often know very little about
the new technologies or business model opportunities, there is much uncertainty
and risk. Going through the sequential steps of the standard innovation process
seems not to work here. Rather, more agile and experimental approaches, based
on trial and error, are needed to find out what works and what doesn't. Start-ups
work like that, they apply agile innovation methods and happily experiment
their way forward. As hard as this may be for larger companies, management
teams will need to find ways to work more like start-ups.
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