Ten “worst practices” for gaining benefits from Innovation

edit Watch-out for these tell-tale signs of an innovation process that may be headed for big trouble

1. The plan for an innovation is all-or-nothing and looks only at the project as originally conceived; not at the underlying capabilities built up in it
2. There is no explicit plan to articulate and test assumptions and update the project plan subject to what is being learned
3. The innovation is fully funded through to market introduction at the point of initial project approval (without a requirement to demonstrate accomplishment of interim milestones).
4. The project is evaluated on a calendar schedule basis, not on the basis of milestones accomplished
5. Project team members are rewarded only for market introduction; and suffer negative consequences if their projects are stopped
6. The project is under pressure from senior executives achieve large revenues or market share quickly
7. The project is being managed in isolation from other activities in the business
8. The team members of the project have little experience with uncertain or ambiguous situations, even if they have a great track record in the core business
9. The CEO and senior team publicly argue that the project will make up for performance shortfalls in the core business in the near term
10. You have no way of measuring project benefits other than progress on plan

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The unexpected benefits of failure

edit Business Week just featured a cover story on how learning from failure can ultimately lead to success. Those who know us know that we've been on that theme for many years. The article is worth reading. It's also worth giving some thought to these questions:

When you say it's OK to fail, do you really mean it? I kind of like the way Jeff Immelt of GE puts it: "you are allowed to fail once - but don't make the same mistake again."

How do you distinguish between intelligent failures and the stupid ones? We are big proponents of discovery driven planning to help make your assumptions explicit and engage the organization. If you helped put the plan together, you can judge whether the outcome was based on flawed thinking or bad luck.

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Wrong tools for the job of innovation

edit A mistake I see companies making all the time is to try to do new things with the tools that they are comfortable with from their existing businesses. Things like NPV, stage/gate planning, Six Sigma, and conventional budgeting all steer you in the wrong direction when you are trying to do something new. Fortunately, executives can now access some very powerful tools that are right for the innovation job. If you have an interest in hearing about those we think have a lot of promise (which would include discovery driven planning, real options reasoning, new-market-creation tools and opportunity portfolio mapping) I’d be happy to send materials along.

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