Using Innovation as a Business Decision Tool

This blog post was originally published at Management Concepts Program & Project Perspectives blog.

Author: Lowell Dye

Using Innovation as a Business Decision Tool

In this rapidly changing environment, organizations continuously stress the need for innovation. Therefore, innovation needs to be viewed from a long-term perspective and must be a component in every organization’s strategic plan regardless of the organization’s size, level of maturity, industry, or business philosophy.

From a business perspective it is helpful to consider several questions:

• How important is innovation within the organization?
• Is innovation a focused, strategic, and funded priority?
• How does the organization effectively integrate any process structures with spontaneity and creativity?
• What role does innovation play in understanding the big picture?
• What are the challenges of trying to innovate organizational and business processes, not products and services?

Five ways to maximize the benefits of innovation as a decision-making tool:

1) Make innovation a component of your strategic planning process.

A major error that many organizations commit is the failure to include innovation in their strategic plans, as well as failing to prioritize innovation efforts as part of the overall investment portfolio.

2) Allow time to identify good ideas.

Good, innovative ideas are generally hard to find and easily overlooked. Organizations are inundated with ideas every day. Not all of them are good ideas, but they all must be considered. Organizations that have in place a structured idea generation and evaluation process, even a rudimentary one, have a better chance of identifying ideas that will aid in business growth. Really good ideas are like pearls – many oysters must be opened and explored before something of value is discovered. Innovation generally requires careful harvesting (management) before it delivers a significant return. However, expecting results too fast might cause the organization to overlook good ideas or terminate the creative process before value-added results are delivered.

3) Focus on the organizations processes, not just it products.

Too many organizations focus apply their creative energies to building bigger and better tools and products. Sometimes that best use of the organization’s creative reservoir is not on making a better product, but creating a better process for getting that product out the door and to the end-users. Innovation applied to business operations, as well as business outputs, can help move the organization toward accomplishing its strategic goals and objectives.

4) Encourage creativity and innovation and reward them.

For sustained business growth, it is important that managers create a culture that fosters and rewards creativity and innovation. Eliminate the old stereotype that innovation is simply a Research and Development function. Ideas can come from anywhere. Don’t let old attitudes and bureaucracy become a barrier to creativity.

5) Balance the real with the ideal.

It is important to clearly link innovation to the bottom-line. If the organization cannot turn innovative ideas into useable products and services that contribute to the profit margin, idea generation might be reduced or even stopped.

In today’s business and economic environment, how an organization plans for and implements innovation as a business strategy can mean the difference between success and failure. Innovation needs to be part of an organization’s culture. It is not the sole responsibility of a specific functional group or the managers. Everyone in the organization plays a role in generating ideas and trying to bring those ideas to fruition.