Get the opportunity to grow your influence by giving your products or services prime exposure with Performance Magazine.

If you are interested in advertising with Performance Magazine, leave your address below or contact us at: marketing@smartkpis.com.

Advertise with us
logo1 KPI Certified

Bootstrapping – low-cost innovation in driving performance

FacebooktwitterlinkedinFacebooktwitterlinkedin
 

It has been decades since innovation became a leading source of competitive advantage and high performance. At the same time, innovation demands have exponentially grown alongside technological revolutions worldwide. In today’s market, having a strong innovative capacity can really make the difference between success or failure. This is why management teams from all types of organizations, be it start-ups or large corporation pay a close look at the best ways to enhance their internal innovation potential, which is the background driver for each organization’s continuous improvement.

In fact, according to the State of Global Innovation Report in 2015, 95% of the respondents declared that innovation is now part of the management strategy. This is a clear signal that innovation has become largely accessible, even if only a handful of powerful companies have the budget to run R&D Divisions and complex Internal labs with top-notch experts. What are the rest of today’s companies doing to become innovative?

The foundation of low-cost innovation

I came up with this term, to underline the current reality: innovation is a state of mind, accessible to everyone and it leverages on a solid idea of framework management.  Everyone in the company might be seen as the next innovator, which may provide an industry-disruptive idea. The human capital potential is enormous right now. And you know what? Who knows better what can be improved than the people working on daily basis on the production floors.

Large companies such as Continental understood this a long time ago, back in 1930 when they introduced an improvement suggestions system. During that time, it evolved into a complex automated solution which is now represented by the Continental Idea Management (CIM) and with this mechanism, everyone can contribute with ideas for improving basically everything that is going on inside the company.

Is the idea management system paying off? If you consider Continental’s last results, the answer is obvious. Taking into account the numbers from 2014, they gathered over 450,000 improvement ideas, from more than 150 locations, with previously-implemented ideas bringing in no less than 160 million Euros in savings.  The numbers are impressive even if I cannot say for certain whether they are good or bad, since there are not many reports from which to extract data. Sure, savings are always good, but how do we evaluate the results?

In most cases, everything leads to having a few in-house key elements:

I. A dedicated strategy

Building a framework around idea management, while proactively growing an innovation culture, stimulates everyone’s involvement, from top management to the door keeper. This strategy is part of the overall organizational plan and incorporates the vision of the company. Once it is cascaded towards staff level, it brings the necessary clarity and focus required to align individual contributions to long term goals.

Also, a good strategy for idea management, backed up by metrics (E.g.: # Ideas generated by X Division / % Ideas approved / $ savings generated) is supposed to bring a balance between: large volume of ideas (because everyone can have some) vs the quality of proposals, time and effort spent to review and evaluate ideas vs the transparency of the rating and tracking system, staff motivation to generate ideas vs rewards. All these things need to be carefully examined and become part of the innovation strategy.

innovation  

II. An agile idea management system

The main principle behind such a system is to ensure that an idea’s journey is short and fruitful. In other words, the length of the timeframe, from idea generation to solution implementation, dictates the company’s adaptability pace. Of course, there are significant challenges to face. The paradox is that once companies grow, they trade swiftness for change resistance and bureaucracy. And as we all know, new ideas need a significant openness to embrace change.

Conversely, in order to have a short journey, you need to make sure that everyone can contribute and is transparent in their evaluation and implementation efforts. At the moment, there are hundreds of low cost software solutions on the market, dedicated to collaborative idea management. You just need to pick the right one for you. Here is a list with some of them.

III. Leadership involvement

In some cases, the CEO is one of the main sources of innovation due to his large exposure to internal affairs in the company, industry, regarding competition and so forth. In recent years, from nice-to-have we stepped into a must have and formal innovation responsibilities were created for Chief Innovation Officers. In more and more organizations, apart from the formal leader, there are dedicated cross-functional teams of specialists, continuously analyzing and evaluating any novel ideas.

Another key aspect is having constant executive support for the idea management system and encourage employees to take an active role in the improvement process.

IV. Innovative ideas to sustain the process

There are two main idea management patterns supporting internal innovation: suggestion-open schemes and innovation goals-driven initiatives. The first one is created by implementing a transparent, on-going improvement process of idea collection. Everyone can contribute anytime with further input. The downsides of such a model reside in the oscillatory idea generation flow, the likelihood of duplicating ideas or the lackluster quality of inputs, which may be seen as irrelevant.

The Innovation Box technique is highly representative in this scenario – without focusing on clear goals or problems requiring attention, the flow of improvement ideas will decrease along with the contributors’ motivation.

The second idea management model is built around directing any innovation potential into solving specific challenges. In this scenario, companies have been proven to be very creative.

From internal design thinking workshops, ideation campaigns and hackathons, to developing their own business incubators, as is the case of StartUp Garage backed up by BMW, it seems that the sky is not the limit anymore. Companies can go where they have never gone before.

Image source:
12 ways for your company to improve customer satisfaction
Six Tips for More Accurate Cost Prediction Models
free

Tags: , ,

Leave a comment

THE KPI INSTITUTE

The KPI Institute’s 2020 Agenda is now available! |  The latest updates from The KPI Institute |  Thriving testimonials from our clients |