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It’s The End of the Year - Do You Know Where Your Innovation Process Is?

| On 28, Dec 2007

Cass PursellDo a Google search on Innovation in 2007 and see what you return. Lists of cool inventions, next-generation product ideas. A conference or two. No mention, however, of ideas on improving innovation processes. To my mind, this is an acid-test exercise that illustrates how far organizations have yet to go to successfully adopt an innovation intention. I couldn’t let the year end without throwing out my vote for the best innovation process idea of the year.

I tend to favor the application of proven approaches when dealing with new challenges. I like the idea, for example, of mining Lean Six Sigma methodology for tools that can be used in improving organizational innovation processes. For that reason, my vote for Best Innovation Process idea of 2007 goes to The Innovation Value Chain, presented by Morten Hansen and Julian Birkinshaw in the Harvard Business Review earlier this year.

The innovation value chain presents innovation as a sequential, three-phase process that involves first the generation of an idea, then the development of an idea, and finally the implementation of developed ideas into the marketplace. There are six critical tasks that must be performed across the three phases:

* Internal sourcing

* Cross-unit sourcing

* External sourcing

* Selection

* Development

* Company-wide spread of the idea

Each task is a link in the innovation value chain. Along the chain, there may be one or more activities that a company excels in, and others that a company may struggle with. For example, Inuit (the maker of Quicken) was an organization with lots of ideas, exhibiting internal sourcing as an organizational strength. Conversely, they had little discipline for bringing its ideas to market, implying weaknesses in selection and development. I like Hansen and Birkinshaw’s idea because it recognizes that innovation challenges differ from firm to firm, and provides a structured approach that firms can use to identify their own strengths and weaknesses. It encourages executives to review their innovation processes from end-to-end.

The innovation value chain is a great idea, one that organizations would be well-advised to add to the agenda of their 2008 strategic planning retreats. Let me know if you have any better ideas for which you’d prefer to vote.