In my first post I described companies with the innovation version of “Deadman Walking”… apparently successful companies with floundering R&D groups and disappointing R&D portfolios. In my next 4 posts I tackle several aspects of R&D Leadership essential for an innovation crescendo: innovation strategy, innovation culture, metrics for innovation projects and the art of influence. Let’s begin with the basics: developing an innovation strategy.
Setting an Innovation strategy is critical to reaching an Innovation Crescendo1.
If you ask many senior business executives about their Innovation strategy, their response is either a description of their business plan or a list of next year’s major product launches. Warning: these are not innovation strategies!
Many company strategies often contain very little product or technology innovation strategy. In the “Deadman Walking” company we looked at in my first post, strategy was focused on delivering a mix of new line extensions, product improvements, or global-expansion projects. In a true Innovator company, there will also be R&D resources allocated against several big, risky projects in the portfolio, some utilizing new disruptive technologies. The ratio of innovation projects in the portfolio will vary of course, depending on the short term and long term objectives of the company, but if there are no “big idea” projects in the portfolio it’s a warning sign that there is no real innovation strategy identified.
Innovative strategy is developed by asking questions like:
In what product areas will our strategic thrust be in for the next several years?
What new product claims should we be making?
What does the customer want?
What is our entry strategy; Innovator or Fast Follower?
Is our Business Development group aligned with the Innovation strategy?
Are these projects globally attractive?
What technology platforms will be utilized?
In Innovator companies, senior leaders are engaged in collaborating with R&D to develop or encourage an innovation strategy. Financial, time or risk constraints may be relaxed for innovation “big idea” projects relative to line extension projects for example. This more relaxed attitude to “big idea” projects will help the R&D leader champion and implement real changes in innovation strategy.
At the beginning of my R&D career, I remember when a senior R&D leader asked me to present a new product concept for upper management. It was an extremely exciting and motivating event for me to see that my manager and upper management were actively interested in innovation collaboration with a young scientist. Those kinds of R&D leaders are special because they harness and understand what motivates the R&D temperament while also championing an R&D Innovation strategy across the company in a way that meets company goals and objectives.
Innovation seems to work best in companies where the CEO has a strong interest in innovation … consider for example, Steve Jobs at Apple, Bill Gates at Microsoft, Dr P Roy Vagelos at Merck and Jeff Bezos at Amazon, to name a few. Bill Gates for example, had bi-annual “Think Weeks” where he would seclude himself to read and act upon Microsoft employee proposals for new products, trends in technology and “hot” new products2.
In summary, the role of R&D Leadership is crucial if a company wishes to be an Innovator or Fast Follower3. The R&D Leader needs to engage senior executives in developing a balanced R&D Innovation strategy aligned with the corporate strategy and get buy-in on the strategy from other leaders in the company.
1. For more thoughts on this topic I recommend Robert G. Cooper and Scott J. Edgett, Product Innovation and Technology Strategy (Product Development Institute, 2009)
2. For more on Gates’ “Think Weeks”: http://humanresources.about.com/od/motivationsucces3/a/learn_read.htm
3. For discussion on innovation strategy types please see my 1st post (“Deadman Walking”) and, “Product Innovation and Technology Strategy”, by Robert Cooper and Scott Edgett where they identify four innovation strategy types: Reactor, Defender, Fast-Follower and Innovator.
© Dennis Nelson 2012