Machine Design

Is your company actually innovative?

“Innovation” is the business topic du jour, but what does it really mean to be an “innovative company,” and how does an organization know if it is innovative?

“The factors that must be in place to support innovation are not a mystery. Companies that rely on ‘innovative thought’ to advance their product development, sales, and customer service processes must be sure they encourage and support breakthrough thinking,” says Andrew Graham, CEO of Kepner-Tregoe Inc., ( an international consulting and training services firm.

According to Graham, companies can check the health of their own innovation by looking closely at some of the key variables that affect innovation:

Does your organization have a clear strategy? Strategy defines the field in which an organization operates. It involves questions such as, “What products will the firm offer and how much will the firm invest in each?”

Do your company’s business processes measure up? Business processes are the workflows through which business is conducted. Consider, “How can we do this better,” or “How would we do this if we had no constraints?” Ask, “Do we have methods in place for addressing innovation issues?”

Does your organization have clear goals and do you measure results? To be innovative, organizations must have clear, strategy-driven expectations for innovation. Goals must be defined and measured and results must be reported.

Do employees have the inherent skills or the tools necessary to learn to be innovative? Hiring innovative people is one way to foster innovation, but innovation skills and knowledge can also be taught, and creativity nurtured.

Leadership — This is the overarching factor that affects all other variables of innovation. Leaders must establish an organization’s strategy and ensure innovation goals are met, successes and failures measured, and innovative people developed and supported.

Other factors that can make or break an organization’s ability to innovate are structural and cultural. Do information systems let people share ideas and learn from the past? Are structures and roles impeding innovation or letting it blossom? Does the culture — including the reward system — encourage innovation?

According to Graham, the pursuits of “Total Quality” in the 1980s, “reengineering” in the 1990s, and Six Sigma in the 2000s have, in many cases, yielded impressive cost reductions, cycle-time reductions, and quality improvements. But, executives now realize they can’t streamline their way to growth. Continuous gains in ‘how’ an organization does business must dovetail with expanding the horizon of ‘what’ business the company is in. By looking at this handful of key variables, Graham claims, organizations can pinpoint the roadblocks that are inhibiting robust, profitable, breakthrough thinking.

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