In recent years, there has been increasing talk about innovation, with a strong emphasis on technology.
Trends such as internet-of-things, artificial intelligence, additive manufacturing, clouds, and blockchain have become central to an increasing number of initiatives within organizations, absorbing a significant percentage of budget. In this brief article, I would like to shift the focus to the methodological lever and, specifically, to the 56002 standard published in mid-2019 by ISO (International Organization for Standardization).
This standard arises from the observation that innovation is one of the most important competitive levers, as well as from the dramatic need to provide organizations with a framework that will inspire them to manage innovation effectively and efficiently. In my twenty years of international experience as a CIO in four different industries, I have been able to verify that when innovation projects are not embedded in a multidisciplinary innovation management system, the expectations of key stakeholders are partially disappointed.
From this point of view, the new standard finally provides a systemic approach to integrate innovation across all levels of organizations. This approach will enable them to seize and create opportunities for the development of new solutions, systems, products, and services. There is evidence that organizations that establish a framework for long-term innovation react more quickly to threats or surprises, are more likely to take effective action, and are better able to sustain the momentum of change.
Here are some of the key elements that organizations need in order to establish this framework and carry out a portfolio of innovative projects successfully:
- Deep understanding of the internal and external context in which the organization operates;
- Strong commitment from senior management to the adoption of this framework;
- A culture that is open to change; based on risk-taking and the ability to experiment; and where mistakes are seen as a learning opportunity;
- The right vision, policy, strategy, and objectives for innovation (to maximize the effectiveness of the model, these elements must be documented, communicated, understood by all personnel, and maintained over time);
- Adequate resources and skills to achieve the goals resulting from innovation;
- A balanced portfolio of innovation projects (according to a Harvard Business Review study, companies that allocate around 70 percent of their innovation activity to low-risk projects, 20 percent to moderately risky projects and 10 percent to high-risk projects significantly outperform the competition);
- An effective performance evaluation system for innovation projects (the organization will need to carefully define a KPI structure to monitor both the effectiveness and efficiency of the innovation management system and the actual value produced by related initiatives);
- An appropriate continuous improvement process for the model (ideally, starting with a simplified model and then quickly evolving it based on feedback).
In conclusion, we are experiencing an exciting period, unique in its kind, and it is our direct responsibility to allow our company to fully exploit unprecedented opportunities by governing the technological lever with the right innovation management system.