APQC’s 10 Best Practices for Innovation – Part II

by Becky Partida of APQC

In Part 1 of this series, we looked at five best practices that contribute to new product and service innovation. These practices included expanding idea sources beyond areas traditionally associated with innovation (including looking outside the enterprise for innovative ideas) and acknowledging that different types of innovation require different terminologies and strategies. In this last installment of our series, we look at five more imperatives that drive innovation at best-practice organizations IBM, Kennametal Inc., and Mayo Clinic:

  1. Embrace technologies and tools for innovation that are social, sophisticated, and available;
  2. Focus on experimentation;
  3. Recognize the human side of innovation;
  4. Keep measurements simple; and
  5. Look to the future and the past.

Along with the five practices discussed in Part 1, these practices are practical steps that organizations can take to ensure that their innovation processes yield maximum value.

Embrace technologies and tools for innovation

Adopting the right enabling technologies for innovation can support the creative process, facilitate collaboration, and provide a way to capture new ideas. However, technology is pointless unless it matches an organization’s innovation objectives. Best-practice organizations focus technology adoption on the needs of the enterprise as well as individual innovation teams. The organizations also consider whether open source technologies can provide them with the tools they need without a lot of extra cost.

The best-practice organizations studied by APQC favor tools that allow a large number of employees to capture and build on ideas. For example, Mayo Clinic implemented a software application to capture, categorize, and archive ideas for innovation around a defined topic or issue. Virtual events are held to drive brainstorming, and users can rate others’ ideas as well as submit comments, suggestions, and observations.

Mayo also adopted social media tools to facilitate collaboration among employees. Wikis enable staff to capture and modify notes and other project-related communications. The organization has created an innovation toolkit that serves as a central location for materials and resources needed during the innovation process.

Focus on experimentation

For every successful idea, there are many ideas that do not make it through the process. Best-practice organizations accept this fact and do not allow failure to hinder innovation. The organizations studied by APQC emphasize the effort behind the innovations, even if the ideas do not yield profitable results. This fosters a culture in which employees feel free to explore all creative solutions and ideas.

IBM balances its research agenda among three groups:

  • Exploratory research (understanding how nature works);
  • Applied research (connecting the understanding to issues); and
  • Development (making the research usable to IBM customers).

The organization measures success not only by the impact innovation has on IBM’s business, but also by how its research increases scientific understanding. Unsuccessful projects are considered learning experiences and are documented so that the lessons-learned can be applied to future work.

Recognize the human side of innovation

The best-practice organizations studied by APQC use more than just financial rewards to encourage innovation. These organizations create spaces conducive to innovation, and they tailor their rewards programs to suit employee interests.

To reward innovation, IBM uses internal programs such as peer-to-peer awards, recognition of technical accomplishments in a particular research area, and an innovation client value award given to teams that exemplify dedication to client success. The organization also seeks publication in external journals and recognition through professional societies to gain external exposure for its employees’ efforts.

Keep measurements simple

IBM, Kennametal, and Mayo all recognize that no one metric can convey innovation success. However, when measuring innovation and its results, these best-practice organizations use only a select group of measures that they are meaningful to users. Although innovation can involve multiple activities and processes, the metrics selected for use should be customized to help organizational leaders make improvement decisions.

Kennametal, a maker of tooling, engineered components, and advanced materials consumed in the manufacturing process, uses only a few high-level, cross-functional measures to evaluate the success of innovation. These measures include the percentage of revenue resulting from new products and the cycle time of new product development.

By keeping measures high-level and simple, the organization can easily communicate performance across the enterprise in a way that employees at all levels can understand. Kennametal also tracks three other groups of performance measures to obtain a more detailed view of the innovation process and its outcomes:

  • project metrics;
  • RD&E functional metrics; and
  • special focus metrics (such as the percentage of employees trained in Six Sigma).