Interview – James Todhunter – Invention Machine
I had the opportunity to interview James Todhunter, Chief Technology Officer at Invention Machine about engaging employees in a successful open innovation effort. Invention Machine is a software company that drives sustainable innovation across global organizations. In his blog Innovating to Win, Todhunter regularly offers insights and observations on building high-performance teams that can drive sustainable innovation across organizations.
Here is the text from the interview:
1. When it comes to open innovation, what is the biggest challenge that you see organizations facing?
In general, I don’t see organizations struggling to find an entry point into open innovation. Rather, the struggle comes in understanding the critical success factors that must be met, and how to face these challenges. While we are all aware of certain high profile companies that have achieved interesting results through open innovation, I hear many more organizations complain that they are not deriving value from their efforts. After an initial flurry of activity, the programs stall. The quality of input from the innovation communities is low and often characterized as shallow and immature. The reliability of value network partners is sometimes weak, and there is a great gulf between indentifying an interesting idea and delivering value in the form of a new product or market innovation. Overcoming the issues of authority, alignment, and actualization spells the difference between open innovation as just a big suggestion box versus being a source of value. This will be the focus of my session at the Open Innovation Summit.
2. From your experience, what are some of the keys to successfully engaging employees in an open innovation effort?
To engage employees in the open innovation initiative, it is critical to understand the roles of the many constituencies of innovation and communicate those roles clearly to internal communities. Every organization must take the time to look at the various communities, both internal and external, that contribute value to the corporate innovation programs. Internal communities such as engineering, marketing, production and all have distinct roles and functions to fulfill in the value creation and delivery process. The external communities include supply partners, production partners, logistical partners, and customers. When the roles and interaction points of these communities are understood, the open innovation system can be presented as a powerful tool to help employees be more successful and not be viewed as a source of noise or, in the extreme, a threat.
3. Do organizations need a centralized innovation group? What authority do they need?
Well, this is one of those questions must be answered with both a yes and a no. First, let’s consider the no aspect of this. For a company to truly establish a sustainable and high performance innovation culture, it must first understand that innovation is everyone’s job. That doesn’t mean that everyone should go off and try to create the next great thing. Rather, it is a realization that the only constant in any business is change. Even as we establish best practices for operational efficiency, we need to consider how to tear them down and redefine best practices and the methods of execution in order to operationalize innovation as a force of change to help us achieve the continuous improvement we must always seek. This constant and continuous every day innovation is just one end of the innovation continuum. For others in the organization, innovation takes on progressively higher orders of meaning as our individual roles define the classes of innovation activities that we each must pursue. With this in mind, organizations should consider how they steward the development of innovation skills within the company and help individual worker grow their own innovation capabilities. Broad engagement in the innovation culture also has the benefit of preempting the NIH attitude that can prevent the diffusion of innovation when new concepts are foisted upon the workforce by what can be viewed as an ivory tower body.
However, even in such a ubiquitous innovation environment, it becomes clear that an organizing force is needed to create alignment and get everyone pulling the wagon in the same direction. This is the yes part of the answer. Companies that believe such systems will self organize as grass roots initiatives are fooling themselves. There are critical factors that are simply out of the scope of the rank file community and thus limit the traction achievable at the grass roots level. Providing a corporate wide innovation skills development program, building the infrastructure for knowledge enablement of innovation workers, ensuring the alignment of all innovation activity with corporate strategy, and making the trade-offs of resource allocations are just a few examples of activities that require some higher-level visibility and attention in the organization. It is for this reason that truly successful innovation cultures begin with a mandate from the top which is not merely expressed in words, but experienced by all through the consistent and constant reinforcement of action.
It is important to note that there is a lot of latitude on how such a central capability can be expressed in a company. It doesn’t need to be an explicit organizational unit; it may be a managed matrix function. It is also not necessary that the central capability is the body doing the innovation per se, in many cases the central function is an enabler – a catalyst with the organization – of innovation.
4. What are some of the secrets to achieving organizational alignment when it comes to innovation?
The single greatest tool to achieve organizational alignment is communication. Communication must flow in all directions: top-down, bottom-up, and side-to-side. The communication must be rich and open. Management must communicate to employees the strategy, objectives, and relevance of each employee’s job to the strategy. I remember walking around the production facility of a global semiconductor manufacturer. As I talked with different workers, the clarity and consistency of understanding of the strategic goal and each person’s ability to impact that goal was remarkable. It is no wonder that this company is the leader in their space.
Employees must also feed information up the ladder. None of us are immune from the trap of our own personal experience. Management needs the input of the company’s communities to have a complete picture on which to base its strategic assessments and properly understand the trade-off dynamics as they make both tactical and strategic decisions that will have far reaching affects on the company.
And of course, side-to-side communication and collaboration are fundamentally important for a complete alignment in the company’s innovation programs.
5. What are some of the keys to validating ideas in order to pick the ideas to fund?
A great place to start is to examine the three Fs: FIT, FEASIBILITY, and FINANCE.
By looking at FIT, you should asking questions about how well the subject concept meets the needs. Have you identified and qualified the customer pain you are going to address through your innovation? How differentiated is your concept relative to other potential solutions (including non-consumption)? What are the deficits of your approach? What are the change dynamics and hurdles to innovation diffusion that you may encounter and how does your concept address these? These and similar questions are all about assessing the scope and nature of your future value proposition.
When considering FEASIBILITY, the questions are now oriented towards understanding the implementability and market timing aspects of innovation. What technical challenges must be overcome to realize you vision? Do you have potential solution paths identified? What about freedom to operate? Do you have an open field, or are there intellectual property hurdles to be cleared? What is the time line to deliver on your concept and is that compatible with the market?
And of course, business is all about FINANCE. What is the size of the opportunity? What is the path to monetization? Is this use of resources aligned with your objectives? Is this a strategic move or a distraction? What is the opportunity cost of pursuing this path as compared to others? How will you achieve a positive contribution to margin in the shortest time? How does this innovation contribute to the long range objectives for corporate valuation?
6. What are some ways that organizations can accelerate their innovation efforts?
Of course the specific needs of every organization are different. But in general, I would advise companies to walk the walk and not merely pay lip service to innovation. This means making the corporate commitment to innovation palpable at every level. Executive management must be visibly and meaningfully engaged in the innovation process. They must also show their commitment through investing in people, giving them the time, latitude, and support they need to successfully meet the corporate innovation goals. Workers must be provided with access to innovation skills training. Of course, the tools and infrastructure for innovation are essential. This is why Invention Machine’s global clients invest in the Goldfire innovation platform. All of this must be in service of a comprehensive and connected high-performance innovation system that balances every day and strategic innovation, and ties all efforts back to the corporate objectives.
7. What skills do you believe that managers need to acquire to succeed in an innovation-led organization?
It is essential for managers to be able to properly value innovation and assess innovation strategies. Related to this, managers must be able to articulate the value of innovation to the various internal constituencies they touch. Finally, managing the dynamics of change within the organization is a key skill in maintaining a healthy innovation environment.
8. If you were to change one thing about our educational system to better prepare students to contribute in the innovation workforce of tomorrow, what would it be?
A shift towards teaching critical thinking and learning skills is sorely needed. These are the building blocks of success in a future that will be defined by rapidly changing dynamics on a global scale. We aren’t doing an adequate job of equipping the next generation of knowledge and innovation workers with these essential skills.
Braden Kelley is a popular innovation speaker, embeds innovation across the organization with innovation training, and builds B2B inbound marketing strategies that drive increased revenue, visibility and inbound demand generation. He is the creator of the Nine Innovation Roles Group Diagnostic Tool and author of Stoking Your Innovation Bonfire from John Wiley & Sons. He tweets from @innovate.