An innovation audit looks at a number of issues to see what is working well and what is impeding innovation in the company. It asks analytical questions like these:
1. How many new products and services did we launch last year and how does this compare to the ideal?
2. How long does it take an idea to go from initial approval to full implementation?
3. What proportion of our revenues comes from products or services launched in the last two years?
4. How effective is our idea generation programme? How many ideas are we generating?
5. How healthy is our new product pipeline? What is the forecast value of developments in the pipeline?
6. How many ideas per employee are submitted and how many are approved?
7. What resources in terms of people, time and money are we allocating to innovation?
In addition to numerical and analytical questions the audit should examine softer issues. In depth interviews with a sample of people from different departments and levels will reveal much about the culture. Typical discussion points centre around questions like these:
1. To what extent are people empowered to try out new ideas?
2. Do we recognise and reward risk taking?
3. Do we blame people for failure when initiatives do not succeed?
4. Can people challenge company policy or the decisions of the boss?
5. Are we complacent or entrepreneurial?
6. Do we deliberately look outside for ideas?
7. Do departments openly collaborate on projects?
8. What is stopping us from implementing more ideas quickly?
The audit should also examine the idea approval process. How many hurdles does a proposal have to clear to get approved? How many people are involved? Flow diagrams of the theoretical and real approval processes need to be generated and examined. Is the approval process fit for purpose? Can small ideas get through or do they have to go through the same approvals as major initiatives? And so on.
A good impartial audit will identify key areas for improvement in corporate culture and in innovation processes. It will help you to prioritise the issues that need to be addressed.
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Paul Sloane writes, speaks and leads workshops on creativity, innovation and leadership. He is the author of The Innovative Leader and editor of A Guide to Open Innovation and Crowdsourcing, both published by Kogan-Page.