How Knowing More About Your Innovation Culture Can Help You Grow Your Product and Service Offerings
By Paul Mugge
In the history of innovation, services have taken a back seat to products. It’s easier to create, launch and market tangible goods to consumers and even B-to-B customers. But should it be that way?
We don’t think so, and neither do the organizers of a new group called The International Society of Service Innovation Professionals, ISSIP (pronounced iZip). ISSIP is a professional association co-founded by IBM, Cisco, HP and several universities with a mission to promote Service Innovation for our interconnected world. Its purpose is to help institutions and individuals to grow and be successful in our global service economy. NC State University, which is our home base, is a founding member. So is one of our former corporate sponsors, Cisco.
Earlier this year, I had the opportunity to represent ISSIP at the Hawaii International Conference on System Sciences (HICSS). I was joined by Heather Yurko of Cisco; Yassi Moghaddan of ISSIP; Alexandra Medina-Borha of the National Science Foundation; and Gerhard Gudergan of Germany’s Aachen university. Our goal was to lay out a framework for successfully executing innovative service offerings.
Our jumping-off point was the creation of the Service Innovation Framework Special Interest group within the ISSIP. Launched in 2014, the SIF-SIG has 39 members and is chaired by Cisco’s Heather Yurko and DJ Christman. The SIG was busy in 2015; members completed an analysis on the library of service innovation models; created ISSIP Service Innovation Blocks (publication in progress); Presented Service Innovation Blocks at an ISSIP Innovation Roundtable; and founded the ISSIP @ T-Summit committee.
At the HICSS conference, my particular contribution was to discuss the benefits of a tool that we at CIMS developed and have used successfully to help companies measure their innovation-management maturity throughout the enterprise. This tool, the Innovation Management Maturity Assessment, is often the first step companies take when they engage with us to help them become more consistent innovators. To get ahead of the pack, managers at leading companies are asking:
- How can we move beyond producing only incremental products and create more radical innovations?
- Which emerging technologies have the potential to be disruptive and generate breakout financial results?
- Are there adjacent markets where we can leverage existing platforms?
- What internal capabilities do we need to be successful innovators?
But first, some background. Although we’re known primarily for our work with R&D driven, industrial or high-tech companies that want to consistently achieve breakthrough production innovation, we’ve been developing our expertise in service innovation. For instance, over the past several years, our bi-monthly newsletter, the Innovation Management Report, has published at least eight articles by CIMS members, fellows or faculty on service innovation. The most recent of these (November/December 2015) was by Brian Bowers of Bell and Howell, one of our newest members, and described how the company went through the process of remaking itself as a services provider rather than equipment provider.
So how can the IMMA help companies position themselves for success in service innovation?
The IMMA provides a systematic way for thinking about and managing innovation. It measures the core competencies of innovation management—idea management, platform management, portfolio management, market management and product management against five dimensions typically involved in innovation management—strategy, tools and techniques, organization and culture, metrics and processes. Employees in every area of a company are invited to complete the assessment and rate the company on a maturity scale that begins with ad hoc and progresses through defined, managed, and leveraged, ending with optimized. Results are tabulated and aggregated, and we produce a colorful heat map with the results so the company’s executives can see where they stand on the innovation management continuum. Or said differently, these leaders can see immediately where they have strengths and where there are gaps and how the gaps are impacting the strengths.
Having administered the IMMA to 70+ firms & divisions with global representation and captured 10,000+ individual responses, we have seen several common patterns emerge. These include:
Elusive root causes of sub-optimal innovation management maturity. In such cases, scores are typically low across the board. With a little digging, we see that the company has little or no market orientation and does no strategic planning, leading, a situation that causes Portfolio Management and Organization & Culture suffer as a result.
Strengths sometimes hide a gaping hole. A company may score high in several dimensions, but its poorer performance in key areas—particularly when there’s a breakdown in strategy around platform management—can result in a very costly and inefficient business model where every project is a “one off” and the ability to quickly address niche market cells is severely limited.
Confusing activity for results. In such cases, scorecards may be dominated by 2s (“defined” level of maturity). The company may have hired consultants, done some initial benchmarking, and even documented their “to be” process. But until all the competencies are “Managed” (Level 3 maturity) there can be no change in performance.
Perceptions are often skewed. Rosier responses are typically given by senior management and longer tenured employees, while less empowered folks often have more negative views of a company’s activities. That’s why we think it’s important to take demographic before launching any improvement program.
Innovation must be led from the top. Only top management can set strategy, allocate resources and affect the culture of the organization through their actions. Its middle management’s job to amplify on these directions and put them into operation.
Some factors are more important than others. If the company displays no capability—perhaps no will?–to identify and develop ideas, it’s hard for it to have an entrepreneurial spirit and drive. Coupled with a lack of strategy, weak or non-existent Idea Management capability can be life threatening.
Perhaps the best thing about the IMMA is that, in the words of CIMS Chief Evangelist, Dr. Richard Kouri, “it provides the organization with a common language about how to manage innovation.”
HICSS audience members were treated to a taste of the IMMA during our presentation. My hope is that they were able to see how it’s a valuable tool for service-oriented organizations, too, giving them not just a diagnosis but also a roadmap for how to proceed.
You can learn more about the IMMA, and take it for free, by clicking on the cube image on any page of the CIMS website or by going to the “Tools” tab. More Hinformation about the IMMA and how it fits into the system of innovation we’ve developed at CIMS can be found in the book I co-wrote with Steve Markham, “Traversing the Valley of Death: A Practical Guide for Corporate Innovation Leaders.”
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