It’s much better to think of innovation as a process than to think of it as an event.  I think about it as the process of idea management inside an organisation.

This means that in order to innovate effectively, you not only have to generate great ideas, but you have to select the ones that you want to invest in, then execute them, figure out how to keep people inside the organisation committed as you go through the process, then get the new ideas to spread out in the world.  And if one part of that process goes wrong, then your innovation efforts will likely fail.

That’s kind of scary.

One of the tools that I use to help organisations assess where they are is the Innovation Value Chain – which helps assess how effective an organisation is at each step.

When you start measuring, it turns out that organisations rarely suffer from not having enough good ideas.  I’ve had my MBA and Executive Education students assess their own organisations for a few years now.  They have analysed more than 200 organisations, which cover nearly every type that you can imagine: big multinationals, small 1 or 2 person firms, for profits, not-for-profits, government agencies, schools, churches, high tech firms, low tech firms.  Out of those 200+ organisations, fewer than 10 have idea problems.

That’s less than 5%!  The other 95% are split pretty evenly between having problems with selection and development, or with sustaining and diffusing.

Here’s a practical example.  I did two different Exec Ed classes for one firm this year.  The first one with a group of senior managers, and the second was with a group identified as future leaders of the firm.  Here are the results of their innovation value chain analyses for the firm:

The scores are the average for each group, and low scores are better.  If there is a score of 5 in a category, then the firm is as good as they could possibly be, but if the score is 15, then they have major problems.

I surveyed the senior leaders in March, and their scores on the right.  The steps are ranked from 1-5 in red, with 1 being their strongest area, and 5 being their weakest.  As you can see, idea generation is by far their strongest area.  They have problems with Selection and Implementation.

I ran the survey with the young leaders a couple of months later.  I was a bit worried – what if their results were completely different?  Astonishingly, they listed the five steps in exactly the same order!  Idea generation best, Selection and Implementation the worst.  This makes me feel better about the validity of the tool.

There’s one noticeable difference though – the rankings for the young leaders were worse across the board than those of the senior managers.  What do you make of that?

After spending a week with each group, my conclusion is that the young leaders feel much less empowered.  The senior managers score things relatively well because they feel in control of the situation.  The younger group does not.  This kind of gap between senior managers and line workers is a sign of a broken innovation process.

So what should they do?  Obviously, there are cultural issues to address.  But in terms of managing innovation as a process, there are a few options.  A couple of years ago, the Australian Public Service Management Advisory Committee put together a great report called Empowering Change: Fostering Innovation in the Australian Public Service.  This includes an appendix that has a quiz you can use to evaluate your innovation value chain, along with a set of actions you can use to improve each part of the process.

Their summary table looks like this:

So here is how to use this tool:

1. Evaluate where you are right now. Use the quiz to identify your current strengths and weaknesses in the innovation process.
2. Find  the weakest link.
3. Choose some actions that are designed to improve your weakest area, and execute them. The MAC report includes brief descriptions of all of the tools.  The execution bit is obviously very important.
4. Give it some time to see an effect.
5. Remeasure.  If you’re doing it right, then your first weakest link should improve.  So after the remeasure, figure out where you’re weakest now, then:
6. Iterate!