Note: this post has been updated in The Innovation Matrix Reloaded.
Here’s a sketch that I came up with last week that helps explain how organisations get better at innovation:
This is a bit of a distillation of observations over time. I thought of it because I think that a lot of people that are trying to improve innovation within an organisation think that they can go from the bottom left (No Innovation Capability) to the top right (Google-Like Innovator) in one jump, simply by introducing some sort of innovation program. I think that this is impossible – that you actually have to make the trip in a number of steps, and that there are many different paths that you can take.
The table has two increasing dimensions. Across the horizontal axis there is increasing commitment to innovation. This can include things like talking about how innovation is important, including it as a core value, putting in systems to support and improve innovation, and explicitly earmarking time, money and other resources to innovation. This is measuring innovation inputs.
Going up the vertical axis shows an increase in innovation competence – mainly the ability to generate and successfully execute new ideas. This measures innovation outputs.
Here is a brief description of each box:
- No Innovation Capability: these firms don’t innovate. This isn’t necessarily bad – there’s no value judgment being made. They can be successful if they have strong positions in stable industries, or they can be average performers or struggling in other circumstances. I think we can probably all think of examples for this category.
- Thinking About Innovation: firms in this category are starting to talk about the importance of innovation. They might add it to their list of core values, or have a CEO that is starting to talk it up. Regardless of this increase in awareness and commitment, they are still not very good at it. This is often the first step that organisations take in trying to improve innovation.
- All Talk, No Action: is a self-explanatory category. They are talking the talk, with official innovation programs, commitment of time and resources, etc. But they’re still lousy at actually executing ideas. They may have an excessive focus on ideation, a bad selection process, or just not be very good at executing.
- Unintentional Innovators: My suspicion is that there are firms in both this category and also Unconscious Stars (there have to be for this matrix to be useful and/or make sense). These would be firms that innovate under some other name – so they might be really good at process innovations through a continuous improvement or lean program. They are able to execute ideas reasonably well, but they don’t have any structure in place to support it, nor do they think that they’re innovative.
- Average at Everything: these firms have some structure in place to support innovation, and they are getting better at doing it. Several firms that I work with have gotten to this level after moving first to Talking About Innovation.
- Potential Stars: are good at innovating, and they are putting more resources into getting better at it. They have top-level commitment to innovation, good processes in place, and dedicated resources for innovation. They are reasonably good at executing new ideas and have the potential to become extremely good.
- Unconscious Stars: These firms share characteristics with Unintentional Innovators – but they are really good at executing new ideas. Again, these will be mostly incremental improvements, but they’re highly skilled at generating and executing these kinds of ideas. You could have service firms in this category, where they might not require much structure or resources to execute ideas, so they don’t really think of it as innovating.
- Effortless Innovators: are firms that think about managing innovation, and they are very good at it. They aren’t sinking huge amounts of resources into the process, but they are consciously trying to innovate.
- Google–like Innovators: Another self-explanatory category. In these firms innovation is deeply embedded in the culture – everything is oriented around innovation. Think Google, Apple, 3M, Procter & Gamble etc.
How to use this:
Here are some things that I think we can do with this:
- Use it to make a better picture of how firms improve at innovation: Many of the people in my classes are in firms towards the bottom left, and many of the examples that we use to illustrate points are from firms in the top right (Google, P&G, 3M, etc.). This might be too big a conceptual jump. Not every firm can get to the top right, and neither should every firm aim to. It is more productive to think of this as an incremental process of steps, rather than one big jump.
- Track the evolution of firms: we can learn about how to best manage innovation by tracking how firms progress through this matrix. For example, one firm I work with started with No Innovation Capability, then started talking about it and moved to Thinking About Innovation, and now that they are getting better at it they are Average at Everything.
- Realise that there are multiple targets to shoot at: Like I said, not every organisation can be Google. Thinking about innovation with this matrix, you can see that all of the categories in the top row are excellent at innovation. However, the farther you go to the right, the more resources you have to commit to build and maintain this level of excellence. There are many situations where you can try to be an excellent innovator with a more bottom-up, less resource-intensive system in place.
- Think About the Best Path to Follow: Almost everyone starts by increasing commitment. The danger with this is that you can end up in the All Talk, No Action category. I wonder if we should be figuring out ways to improve capability rather than commitment. Or is this even possible? It’s an interesting question, and you can certainly make a strong argument in favour of increasing capability before you increase how much you talk about innovating.
The main point with The Innovation Matrix is that improving your innovation performance is a journey of many steps, not simply one big leap. The matrix is designed to help us think about this more accurately, and to be more successful at improving our innovation performance.