What’s Your Innovation Ambition?- Valutrics
As Oscar Wilde said, “We are all in the gutter; but some of us are looking at the stars”. To me this phrase says a lot about ambition. It starts with a vision, a dream, an inspiring view of where we want to be in the future. Of course the bit about being in the gutter is a bit dramatic; suffice to say that many companies are in similar positions.
Innovation is fundamental to corporate growth. Those that don’t innovate get left behind. Many companies find it challenging enough to just keep up with the pace of change in their industries. It is then almost impossible to vault the change and to start setting the pace. This is where the starting point should be innovation ambition, a key differentiating factor where better performing companies are more likely to have ambitious visions and targets for innovation.
Discussions of innovation often bring out the prominent examples of companies like Google (especially Google X), Apple and Tesla. In the context of innovation ambition, there are some things to learn but they are not perfect benchmarks. It’s more important to do what is appropriate for you; learn from the “how” of other companies but don’t copy them, and build your own ambition.
What does innovation ambition look like?
Simply put, innovation ambition defines how successful you want to be; with a vision; targets; a plan; and is driven by strong leadership.
It should start with a vision of the future which should be simple, clearly articulated and easily understood. It should be just like a company vision statement, which in itself is a foundation for the innovation ambition, describing what the company wants to be.
There are a few ways to describe your ambitious innovation vision. Lisa Bodell gives a few good examples in this article, albeit mostly qualitative; I think it should be complemented by quantitative targets.
Setting a target with numbers, whether that be market share, a $ value or even the number of countries in which a product is available or the business wants to expand, allows the company to map progress towards a goal. Simply having a qualitative vision, while being a great starting point, doesn’t let you know when you get there. It isn’t enough of a challenge and is usually open to interpretation.
Regular readers of my blogs will know I’m a big fan of the 3 Horizons principle. This is also a good way to segment your ambition. The level of ambition can be different for each horizon, also a good way to balance portfolio risk, including the choice of projects in each horizon. Playing it safe in Horizon 1 while stretching significantly in Horizons 2 and 3 is one example of segmented ambition.
The most important part of constructing and delivering an ambition for innovation is leadership. It’s not just the person at the top, although they are fundamental – if the CEO isn’t driving it, it’s less likely to happen. Leadership here means first having the dream; building and communicating the vision; making sure there’s a good plan; and driving it through.
A G Lafley set the ambition for Procter Gamble to source 50% of its ideas from outside the company – clear, simple and stretching. Each of the divisions put plans and appropriate resources in place, because they knew at the next review, Lafley would ask a simple question – “how are you doing towards the 50% target?”.
What are the implications?
Like any target for the future, it can be easy, stretching or plain fantasy. The latter option is never a good idea. The more challenging the ambition, the more challenging the innovation options that need to be pursued. The tougher those options are, the more likely they are to fail. So the conclusion is that higher ambition requires a higher tolerance for failure. If not, you’ll lose your people in every sense.
It’s also important to retain stretching targets. If you find you’re hitting all of your deadlines and targets, it’s a good indication that your ambition is quite limited.
If you up the ante on innovation, you will need to ensure there is appropriate investment in resources to support innovation. This doesn’t always mean more resource, just the right level and profile.
Stretching ambition also increases risk, particularly if with a listed company where public announcements produce expectations, often built into the share price. That’s why safe targets are often the order of the day. However, in many situations the risk of following a safe path can be higher than the ambitious one. It results in being left behind in the market place, always playing catch up, competing on price not superiority; and ultimately disappearing. High innovation ambition is often the only route for survival.
So – a vision, a target, a plan and leadership. What’s your innovation ambition? Are you looking at the stars?