CIOs as “Chief Innovation Officer”: Setting Principles to Manage an Innovation Capability Portfolio

Do not ignore any specific types of innovation: Without innovation, organizations cannot thrive for the long term. Managing a healthy innovation portfolio should be integrated with the annual strategic planning process and financial investment model. The size and mix of the innovation project portfolio depend on the business circumstances, strategic objectives and severity of external challenges or changes. Generally speaking, all businesses should have a handful of "bets" in the breakthrough category. What's important when developing the mix is to strike the right balance of quick wins and long-term winning proposition; the radical breakthrough and the evolutionary changes. There are “hard” innovations such as product/service/business model innovation, as well as “soft” innovations such as management/culture/communication innovation. A high mature digital organization can handle innovation streams for different purposes and with different time frames. Due to the increasing pace of changes, innovation can happen anywhere across the organization and its ecosystem. If you do not innovate, your competitors will and make your current successful products obsolete. Innovation is the mechanism through which you grow and evolve something to something better (higher value-add) or something new, mostly based on a combination or modification of previous attributes/approaches. The evolution of innovation only exists in the more open environments that create insights, take advantage of all sources of creativity in a more open way and leap innovation management to the next level.
Accept risks for potential reward: The risk is part of innovation, but you can manage parts of these risks. Innovation by its inherent nature comes with a risk. The failure is of crucial importance in the process of achieving innovation. People learn far deeper and more enduring lessons from significant failures than from anything else. These lessons will increase the effectiveness of your next innovation strategy and therefore probably increase your chances of meeting your objectives on your next attempt. Accept risk for potential reward. However, from finance management perspective, consider what capital you are prepared to risk in making the innovation, set the discipline, do not let this be so much that losing it will cripple your business. Hence, the best judgment, a qualitative approach is given for managing innovation risks.
Make innovation benefit the widest possible audience within your organization: Innovation is the means to the end, it should either benefit your customers or your employees. Innovation, as an individual process or collective process, helps us adapt, improve, grow and integrate. Lots of tools are available to help us think differently, assess problems and come to solutions in novel ways. When looking at business/organizations, the most powerful of these processes involves tapping the organization's ecosystem (people centricity) for the collective perspectives/insights of those who make up and know intimately their parts of the system. Being innovative is our gift as humans, with a great deal of what defines us as humans actually, whether new products, services, solutions, new sounds and music, new way of reading and publishing, new ways of educating future of generation, etc It is about incorporating entrepreneurial and startup principles, with a focus on reducing risk adversity to add value to the quality of people’s lives.
Don’t sacrifice the long-term viability of the portfolio for short-term rewards: Innovation can happen everywhere -disruptive innovation, evolutionary innovation, and incremental innovation because technology is changing constantly. In dynamic environments, there must be a capacity to respond to new and emerging opportunities and to create new opportunities. Though both quick win and long-term return on investment for innovation are crucial, do not sacrifice the long-term viability of the portfolio for only short-term rewards, maintains a balance between exploration and exploitation. It is important to manage the innovation life cycle with speed. It’s about how to get all the way around the world, to capture all relevant information, to see from different angles. Disruptive innovations may be considered as drivers for emerging digital strategies with the goal to build the long-term competency of the organization.

Digitalization stipulates companies work together in a hyper-connected and continuously converging environment that provides structural analysis and a certain extent of serendipity. This is about understanding the wholeness.Digital means flow, there is more flow of creative ideas, the better opportunities to reap the benefit from innovation management. Set principles, and take a holistic approach to manage a healthy innovation capability portfolio.
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Published on March 27, 2017 23:20
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