Innovation Archives - Florian Hameister - the innovation process guy

Design Thinking is not delivering what is promised

admin — Mon, 08 May 2023 19:27:51 +0000

Design Thinking is not the innovation enabler, as some may see it. For me, two important things are missing in Design Thinking:

1️⃣　The Business Thinking
You can have the best idea. If you do not have your organization's support, it will end up in the drawer.
Understanding the business needs, the connection to the business outcomes, and the involvement of the decision-makers is essential for internal support—the basis for possible implementation.

2️⃣　Understanding customers deeply
Design Thinking is a lot about empathy. In my experience, it is done mainly too rough on the surface, and we drift off too fast in our assumptions.
To deeply understand what customers need to make progress, it needs more professional research, like the jobs-to-be-done approach.

This is less about the theoretical approach but more from what I saw, how teams and companies used design thinking.

I also found this interesting article from the MIT Technology Review that also had a critical look at Design Thinking. Please have a look at it here.

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Idea Management Software is an Innovation Killer

admin — Thu, 06 Apr 2023 19:09:19 +0000

I see increasingly midsized companies using idea management systems to qualify ideas for development.

In my eyes, that is a waste of resources.

Ideas are more than just a few words on a Post-it or in some software.
Much more important is the idea owner(s).
What is the vision for it, and what problem do they try to tackle? How passionate is he about it?

Giving the evaluation into the hands of someone that has no personal connection to that topic kills valuable ideas because of the "Not invented here -syndrome".

Doing innovation needs much perseverance. This works only if you are really committed to the idea and are passionate about it.
This is not the case when ideas are clicked through software.

And another important point.
The same idea can be valuable and not valuable. It depends on the framing.
So, where is the focus. What specific challenge do you want to solve for your organization? What is the innovation assignment?

Mostly there is none, and then you do not see the valuable ideas because ideas only are valuable when you know that they help you to make progress on a specific topic.

So if you're using a fantastic idea management software, and you still suck at generating real innovative and convincing business cases, maybe you should try something else. And you still can keep the software.

Instead of constantly doing idea research and evaluation, do it in intervals.
When you see your development pipeline getting empty, or you feel you need new products for the future.
You make a fully immersed innovation journey with a team of 7-10 people from start to end.

From the innovation assignment, so everybody knows what is needed, to a deep understanding of your customers, to generating thousands of ideas and selecting the best ones. To test it with customers and make business cases for the TOP 5.

In the end, you will have five Business cases for innovative products and services that fit your business challenge perfectly and are supported by management. You also have a team and management that is passionate about it.
With this, you will be able to prioritize your development and know what you will launch when in the year or years.

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R&D spending has nothing to do with being innovative

admin — Thu, 06 Apr 2023 18:49:01 +0000

Spending money on R&D has nothing to do with being innovative.
PWC made a study about it.

Here are some interesting facts about why it is so...

PWC looked at the correlation between R&D spending and sustained financial performance.
That does not only matter in good times. It is even more important in bad times.

They found the six characteristics of high-leverage innovators:

1️⃣　base innovation on direct insights from end-user

2️⃣　company-wide cultural support for innovation

3️⃣　leadership is closely involved with the innovation program

4️⃣　close alignment of innovation strategy with business strategy

5️⃣　rigorous control of project selection early in the innovation process

6️⃣　Ability to integrate all the above characteristics into a cohesive approach for innovation

Here is the video:

The summary of the video:
"It is not about how much money you throw at the problem. It is about building a set of capabilities that involve talent, process, culture, and customer understanding. And that actually manifests itself in sustained superior financial performance in good times but even more so in bad times" - Barry Jaruzelski

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9 Myths about measuring Innovation

admin — Thu, 30 Mar 2023 15:00:15 +0000

Companies that are used to measure everything also want to measure innovation efforts. That is possible, but different than you may think.

Myth #1

R&D expenditure is a good indicator of innovation

There is no significant relationship between R&D spending and sustained financial performance. It is not about how much money you throw at the problem. It is about building a set of capabilities that involve talent, process, culture, and customer understanding.

Myth #2

Innovation can't be measured because innovation is creativity and creativity can't be measured

Innovation is much more than just creativity. It is discovering an opportunity, generating and selecting the best ideas that seize this opportunity, making it tangible, and finally implementing it to achieve results that help the company to make progress.

Like in Myth #1 it is all about the right people, process, culture, and understanding of customers. And all this can be measured.

Myth #3

The success of a new innovative venture can only be measured once it's in the market

There are multiple options to measure the probability of success way before the actual development.

1. Testing the customer-problem fit.
Observing and interviewing customers and users to discover their problems and validate if your assumptions about their problems are correct.

2. Testing the problem-solution fit.
Defining how your solution will solve the problem, so it helps the customer to make progress. Discover and validate if your assumptions about your solution are correct.

3. Testing the product-market fit.
Discover and validate how many people would spend how much money on your solution.

Myth #4

Everything is a KPI

There are not only Key Performance Indicators(KPIs) there are also Key Result Indicators (KRIs).

The Performance Indicators show how the innovation team is performing day in and day out (Churn rates, number of customer interviews booked next month etc.)

The Result Indicators give a broad summary of what happened as a result of the process (net profits, return on capital employed cumulated customer satisfaction).

These two indicator types help to better measure innovation.

Myth #5

Measuring innovation means measuring the number of ideas in the company

Measuring ideas is an essential part of an innovation accounting system. But it is not enough. Some measure product teams, but not the entire portfolio. Some measure the initiated ideas, but not how many were really adopted.

To measure the company's innovation ecosystem, it needs a wider view, meaning to measure the whole instead of a few chosen parts.

Myth #6

All innovation measurements work successfully in any organization

Organizations differ a lot. A B2B company is pretty different from a B2B2C Company. And in every company, innovation has a different meaning and importance.

While the principles of Innovation Accounting are universal, the reality of measuring innovation itself needs to be contextualized.It must reflect the peculiarities and particularities of the company using it.

Myth #7

All innovation measurements work successfully for any type of innovation

There are different types of innovation, like incremental or breakthrough innovations.

Different kinds of innovation need to be measured differently. Incremental, for example, is all about efficiency. While a breakthrough innovation with the colossal uncertainty of making something entirely new, measurement must be different.

Myth #8

Innovation measurements are only needed to relieve executives and stakeholders anxiety around investing in innovation

It is essential for executives and stakeholders but should be designed for more than just their needs. This means focusing on more than just the financial aspects of innovation. Innovation measurement should reflect the whole innovation ecosystem and all of its processes.

In the end, innovation measurements should lead to changes in behavior. They should serve as the basis for continuous improvements.

Myth #9

Tying innovation measurements to incentives means more and better outcomes

Every KPI can be gamed, but the ones tied to financial gains are more susceptible than others. Every measurement has a dark side, a negative consequence, or an unintended action that can lead to inferior performance.
Incentives cause people to focus on the activities that result in incentives instead of focusing on what is relevant at that moment. It counteracts We-nnovation.

9 myth about measuring innovation from one of my favorite books "Innovation accounting" by Dan Toma and Ester Gons.

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