• Assessing innovation environment of the company

    by  • April 1, 2014 • Innovation methodology, Innovation Series

    Govindarajan et al (2011) presents a very quick and easy assessment for analyzing the innovation potential of the company. Below we present their framework which we also use in ExtremeFactories’ innovation workbook to assess the company’s’ readiness to adopt innovation methodology. The framework asks to rate nine elements for your company from 1(poor) to 10(outstanding) and count the total. The authors have set the magical number of 70 to be classified as a company with innovative environment.

    Statement Score (1-Poor to 10-Outstanding
    A compelling case for innovation – The people in the organization have to understand why innovation is necessary.
    An inspiring, shared vision of the future.
    A fully aligned strategic innovation agenda

    • What business are we in now and want to be in going forward?
    • What is our risk tolerance for pursuing big, game-changing ideas?
    Visible senior management involvement
    A decision-making model that fosters teamwork in support of passionate champions It’s not about metrics; it’s about “the educated gut”
    A creatively resourced, multi-functional dedicated team

    • Project champions
    • Relevant capabilities and expertise
    • Naive, seemingly irrelevant diversity
    Open-minded exploration of the marketplace drivers of innovation
    Willingness to take risk and see value in absurdity
    A well-defined yet flexible execution process

    Does having all these factors present in the organization makes the adoption process of innovation methodology smoother and increases the likelihood of success? On the face of it, they all make sense and they should enhance innovation capacity of the company However, the framework seems biased towards large organization as they would often have dedicated resources and well aligned strategy and execution path. In the case of a small company, strong presence of these factors might be unlikely and this could be a drag on their quantitative assessment and they might yield scores below 70 and yet still be highly innovative. One way could be to benchmark companies of smaller size and scale to a different threshold. We will be gathering more data on it but our initial assessment suggest score of 50 for resource constrained companies could be enough to nurture innovations. Of course more is merrier !

    Vijay Govindarajan, Mark Sebell and Jay Terwilliger, Innovation’s Nine Critical Success Factors,  Harvard Business Review Blogs July 2011