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November 12, 2012

Dimensions of Innovation

Posted by Sanjay Purohit (View Profile | View All Posts) at 5:06 AM

dimensions-of-innovation.jpg

I began my journey to rediscover innovation several years ago when we started to consolidate our views around Building Tomorrow's Enterprise. We clearly saw the 7 mega trends shaping the future and already had an enviable track record in internal innovation through our client delivery processes. But, we needed more insight into the various dimensions of innovation and the wide range of approaches adopted by global organizations to reshape their businesses. And, that's when I started visiting client sites - in fact over a hundred of them - seeking insights around innovation. What emerged was a truly robust view of innovation which eventually converged into a simple framework to help understand innovation along 3 key dimensions, which I see as a cube.

I recently had an opportunity to get a quick read on the state of innovation, using the cube, at the Infosys Executive Leadership Summit in Atlanta, attended by senior executives representing over thirty Global 2000 companies. The first dimension we polled was: Where is the maximum focus for innovation - products or services, business models or business practices? When asked to prioritize, a majority of respondents (52%) selected innovation around products and services. I was a little surprised given the intensity of innovation we're seeing in new business models (30% of this audience). But an executive representing the communications industry made a clear case for product and technology innovation since the industry has limited greenfield opportunities. After all, product innovation can be a strong differentiator - enough to create barriers for competitors and keep customers from defecting.

The second dimension we polled was scale: What is the extent of innovation? What defines the breadth and impact of innovation achieved through incremental initiatives; adjacent innovation to extend products/services/markets; and disruptive innovation that fundamentally changes the rules of the game. Disruptive innovation emerged the top priority (47%), reflective of the hyper-competitive environment we live in today. The third dimension analyzed the approach used by the organization to drive innovation: How do you realize innovation? Incubate, co-create or innovate with the ecosystem (eco-create)? Most companies (45%), in our sample, used an internal incubation approach with formal organization structures and governance models. Co-creation with a partner was the second most popular choice followed by eco-creation with the organization's wide global ecosystem (23%, given that this approach is the most complex, albeit highly effective).

We spent the rest of the time discussing various facets of driving innovation. Managing the economics of innovation emerged as a significant pain (42%), while the role of leadership was underscored yet again (43%). Not surprising though, 33% of the organizations indicated that innovation momentum is best driven through employee engagement. What's the ideal model? Is there one? Even a simple 3 x 3 x 3 framework describing the context, scale and approach towards innovation creates 27 separate paths to innovation nirvana! But it's more likely that organizations are traveling several paths simultaneously. What innovation paths does your organization follow?

Comments

Sanjay, very insightful! What separates an innovative idea from its realization is action. The key question is how to develop the kind of culture and DNA required for fruition in Organization. Any change in business model or product or service is indeed an exercise of 'change'. In other words, the challenge remains as to how do we tune the people for innovation (thoughts and behviours) and where does it fit in the dimensions of innovation?

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