MAPping the FutureColumn in THE INQUIRER
Institutionalizing innovation in your organizationwritten by Mr. REYNALDO C. LUGTU JR. - October 25, 2021
Behind every crisis is opportunity, as the adage goes. Astute entrepreneurs and business executives embrace this as their mantra. They invest instead of hold back, may it be in people, property, and even in innovation. The latter is the wellspring of new processes and technologies, giving birth to undiscovered markets and even to creating new industries.
Famed economist Joseph Schumpeter referred to crises as “seedbeds of innovation and entrepreneurship.” “Innovations developed during crises generate the gales of creative destruction that launch new technologies, remake existing industries, and give birth to entirely new ones — setting in motion new rounds of economic growth,” as cited by The Atlantic.
There is a strong business case for organizations to double down on innovation during a crisis. According to a McKinsey study, “Organizations that maintained their innovation focus through the 2009 financial crisis, for example, emerged stronger, outperforming the market average by more than 30% and continuing to deliver accelerated growth over the subsequent three to five years,” Businesses can gain long-term advantages by understanding shifts amid a crisis and the opportunities they present.
But how can you institutionalize innovation in your organizations to build internal capabilities and create the growth engine when the economy bounces back? In our consulting work with organizations, we have helped institutionalize innovation by creating an innovation program with five pillars.
The first pillar is to create an innovation growth blueprint. This involves the senior management team defining innovation goals and boundaries as part of its strategic initiatives. These also define where the organization wants to be such as serving new markets or creating a seamless digital customer experience. Then decision on resource allocations to run and execute the program and its outcomes must be defined as well. The next pillars include the innovation program components themselves.
Innovation training and enablement is the second pillar. This involves opening the mindsets of the employees to innovation possibilities and teaching the organization members on the tools and techniques in generating ideas and bringing them into fruition within the boundaries set by the company.
As part of our consulting work, we run several enablement programs and workshops to achieve these, such as ‘Design Thinking’, ‘Innovative Thinking’ and ‘Lean Principles’, to provide the methodologies for employees to bring about innovation in their respective departments or across groups.
When the target organization members are already enabled, the next pillars involve setting up the innovation process. The third pillar, which is the idea harvesting, involves setting up a system to gather and collect ideas from the employees through several channels such as a digital form, an app, or though the company intranet. This should be run be an innovation program administrator who consolidates the ideas generated, convenes an innovation council that screens the ideas, and monitor and communicates the screening results. This brings us to the fourth pillar, which is idea screening.
In idea screening, an innovation council composed of managers and executives from across departments is set up with the aim of reviewing the ideas gathered and selecting the top ideas on a quarterly basis. The quarterly finalists will bring their ideas to prototyping level to evaluate their desirability, feasibility, and viability. Finally, the top winners are selected at the end of the year.
The last pillar involves rewards and recognition to those which qualify in the quarterly and annual selection. They may involve monetary and non-monetary rewards such as inclusion to the Innovation Hall of fame. These will further motivate the organization members to think of innovations.
To institutionalize innovation across the organization, the ultimate measure is the change in the behaviors of the employees. The five pillars should be integrated into the key performance indicators of the organization members in order to make innovation a permanent part of the organization’s culture.
(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP. The author is the Co-Vice Chair of the MAP ICT Committee, CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm, Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University.