How much is in your organization’s Innovation Reinvestment Account (IRA)?

by Arlen Meyers

How much is in your organization's Innovation Reinvestment Account (IRA)?

One of the best ways to reduce your tax burden and save for the future is to maximize contributions to your Individual Retirment Account (IRA) early and often, create the proper asset mix and periodically doing an asset allocation rebalance at the right time.

Similarly, the future of most companies, organizations and universities depends on their ability to put innovation in the bank as part of 3 horizon planning. Just like individual accounts, it requires structure, a process, people (leaders, champions, teams), strategy,execution,discipline, creativity ,imagination and the tools to measure results.

Harvard Professor Gary Pisano claims that the reason companies often fail in their attempts to become innovative again or to keep their innovative capacity is due to three factors. One is strategy. For a larger company with an existing business, you need an explicit strategy around how you allocate resources to the new versus the old.

The second is getting the right systems in place. Very different kinds of innovation and problem-solving processes go on when you’re trying to do something transformative versus routine innovation.

The third element of that DNA is their culture. There’s got to be the right kind of culture and has the courage to innovate.

Here are the six steps in the innovation life cycle:

Identifying a Problem to Solve. Successful innovation programs are not only great at generating solutions, they excel at identifying problems. Identifying problems requires that organizations take these four steps to prepare for problem solving: gather & organize existing information, reframe and ask why, set expectations, and identify what success looks like.

Identifying a Process that Works For You. Should I use design thinking or six sigma methodology? Having a process for sharing, identifying and selecting great ideas is what makes innovation a repeatable (even predictable) practice. Get an overview of the different options available to you and figure out which one works best for both your organization, but also for this unique innovation initiative.

Engaging Others in the Process. Employee engagement, open innovation – the future of innovative thinking requires that you reach out to the collective intelligence surrounding you. But how do you get people to share their ideas? How do you keep them coming back to build on the ideas of others? What sorts of incentives motivate creative participation? Every innovation push needs to include a communications plan.

Empowering Groups of People to Build Ideas into Projects. When it comes to turning great ideas into great projects, it’s important to build teams of people that will help steward it through to completion. They need to refine ideas, do research, find collaborators, and more.

Evaluate and Prioritize. Your organization has lots of great ideas, but you only want to move forward with the best ones, the ones most in line with your organizational goals. How do you funnel ideas through a process that helps you evaluate and identify the ideas that will deliver the highest ROI?

Idea Implementation. The best programs have been anticipating this step from the beginning. You’ll need to have buy-in, organizational allies, and creativity in marshalling resources. This is the most important step, of course, in your innovation program.

Every financial planning and retirement site has a calculator to tell you whether you will have enough to retire. But, few firms have done an organizational Innovation Readiness Assessment (IRA) to see if they are on the right track.

Giffford Pinchot, who originated the term “intrapreneur”, has suggested that you rate your organization in several domains to see whether your innovation future looks bright or bleek:

  1. Transmission of vision and strategic intent
  2. Tolerance for risk, failure and mistakes
  3. Support for intrapreneurs
  4. Managers who support innovation
  5. Empowered cross functional teams
  6. Decision making by the doers
  7. Discretionary time to innovate
  8. Attention on the new, not the now
  9. Self- selection
  10. No early hand offs to managers
  11. Internal boundary crossing
  12. Strong organizational culture of support
  13. Focus on customers
  14. Choice of internal suppliers
  15. Measurement of innovation
  16. Transparency and truth
  17. Good treatment of people
  18. Ethical and professional
  19. Swinging for singles, not home runs
  20. Robust external open networks

If you ask a sample of people to rate these in your company on a scale of 1-10, don’t be surprised if the average equals somewhere between 2-4. Few organizations, you see, are truly innovative or have a truly innovative culture. Most don’t even think about how to bridge the now with the new, let alone measure it.

Do a cultural audit. Organizational innovation competencies must include:

  • Leadership
  • Vision
  • Strategy and execution
  • Alignment and engagement
  • Tactics
  • Structure, policy and procedure
  • Tools and incentives
  • Teams
  • Champions
  • Innovation learning system and knowledge management

Here are some examples of questionnaires you can use to identify innovation opportunities for improvement:

  1. INSEAD and Logica model
  2. Innovation Excellence Co-Founder Braden Kelley’s Free Innovation Audit (fill out online or use the downloadable Excel spreadsheet)

There are also ways to measure individual/intrapreneur innovation mindset and readiness

Initiator

Ambidextrous individuals take the initiative and are alert to opportunities beyond the confines of their own jobs.

Cooperator

Ambidextrous individuals are cooperative and seek out opportunities to combine their efforts with others.

Broker

Ambidextrous individuals are brokers, always looking to build internal linkages.

Multitasker

Ambidextrous individuals are multitaskers who are comfortable wearing more than one hat.

Theoretically, then, organizational ambidexterity happens when organizations and individuals are ready, willing and able to innovate. For one author, that means the leadership of your organization needs to focus on three core competencies:

  1. Start by being a problem seeker, not a problem solver
  2. Lead innovators, don’t manage innovation
  3. Look for precedents and why they succeeded or failed

The good news is that now you have something to measure and pursue the many opportunities for improvement. Your business depends on your innovation nest egg as much as your personal retirement. Start now and you’ll have a much happier business future.

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Arlen MyersArlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs at www.sopenet.org and co-editor of Digital Health Entrepreneurship

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