Emerging from the financial crisis, many organizations are focused on innovation as the top driver of growth. But reigniting the innovation engine after two turbulent years will prove to be difficult, especially for those companies left with limited resources for innovation.
Organizations typically kick-start innovation with disciplined processes guided by a new product development strategy and facilitated by IT. But the reality is that they're set up to fail, because real innovation requires not just a change of what we do, but a deeper and more fundamental transformation of the extended supply chain. And companies fail to execute because they neglect the fuel of their engine — their people.
In late 2009, the Society for Information Management's annual conference, SIMposium 09: Fresh Ideas for Peak Performance, provided an opportunity for CIOs from The Dannon Company, Group Health Cooperative, Oregon State University and the Port of Seattle to join me in a panel discussion on how to align teams on core objectives in a way that sustains innovation transformation. Here are four best practices that emerged in the discussion:
1. Address the Fuel of Innovation: People
All the panelists indicated that at one point in their careers, their organizations did not realize the benefits of innovation because they didn't address their people and their culture. One of the best investments leaders can make is to cultivate high-performing teams that effectively leverage the capabilities and experience of each team member. While it's crucial for talent to have real domain and industry expertise, they must also maintain some level of agility to adapt to changing market conditions.
2. Cultivate a Culture that Promotes Risk-taking, Collaboration and Agility
Innovation culture starts from the top with enlightened, aligned leaders that "walk the talk," and it has to extend beyond the C-level. Within business groups, team leaders must facilitate conversations that create clarity and unity around vision, purpose, mission, values and strategy. For supply chain executives, this includes forming win-win collaborative partnerships not only internally but also with customers and suppliers. In addition, the organizational culture must foster risk-taking internally and with strategic partners and suppliers, and accept that having some failures is critical to driving innovation.
3. Establish Clear Goals and Guardrails to Encourage Continuous Improvement
Innovation doesn't always have to happen on the bleeding edge. "Fast-follower" organizations that make incremental improvements can be successful, too. The supply chain represents a prime opportunity for incremental changes, and supply chain executives that establish clear innovation goals and metrics, and gain alignment within their organizations, can lay the groundwork for continuous improvement and risk-taking. While necessity drives innovation, persistence and endurance win in the long run.
4. There Is No Such Thing as a Separate Strategy for Innovation
To paraphrase Jeff Hutchinson, CIO of The Dannon Company, there's no such thing as an IT strategy for innovation — only a business strategy. In any organization, multiple business functions must coordinate and synchronize information across a complex, interconnected supply chain to deliver on innovation. Unified governance must exist between the supply chain and IT, finding a balance between a strong IT foundation and business goals.
This process must be first instituted at the executive level so that leadership can align their people on core objectives, immerse them in innovation and mobilize them to rapidly achieve results. Next, line-of-business managers need to establish a strategy for their business units, as well as their supply chain partners. With strategies in place at the corporate and LOB-level, enterprise IT then can implement systems to execute to support them.
As a result, the entire business is integrated, facilitating collaboration, visibility and execution internally and across the total supply chain. This top-to-bottom alignment lays the foundation for a process-driven, disciplined infrastructure across the organization that will enable, support and sustain innovation.