These days everyone is either innovating or desperately wishing they were.
Don't get me wrong - innovation is a good thing. As customers' expectations evolve at an increasingly alarming pace, organisations that fail to innovate quickly get left behind.
However, most of the organisations I speak to don't feel they're innovating particularly well.
So, here are my 4 tips for better innovation:
1. Work from the outside in, not from the inside out
Start by describing an ideal world as experienced by the customer. Describe what they do, why they do it, and how they feel about it. If possible, talk a few customers through this and see if their eyes light up or if they start to drift off.
Avoid the temptation to start by describing how you could improve your existing products, services and processes, or how you could leverage some exciting new idea.
This helps to ensure that all of your innovations serve a genuine customer need. Only then should you consider whether you have, or could gain access to the technologies and capabilities required to deliver it.
2. Don't try and boil the ocean
Once you have a clear picture of what you want to do, don't try and do it all in one go.
Instead, break it into the smallest chunks that you can that will still deliver some value to the customer.
This delivers customer value sooner, and with less risk and less cost. They also allow you to learn what is and isn't working, and to adjust your approach accordingly as you go.
Note that these small chunks are not the proverbial quick wins or low hanging fruit - because you've started from the outside in and broken your propositions down, they are integral components of your strategic transformation programme.
3. Measure twice, cut once
Determine measurable hypotheses and build your measurement systems into the solution right up front.
Test your hypotheses on a scientific basis - that is with control groups. If you don't have control groups, you will never have any way of knowing whether your innovation caused the observed improvement, or whether it was caused by some other factor.
Don't try to collect data after the fact. It is too tempting for people to try and collect data which proves the hypothesis.
And don't try to collect data manually. People get lazy and start to cut corners. People want to move on to the next idea, and you want them to be free to. Instead, build the measurement into the solution, so that the measurement data is generated as a by-product of the process.
See also: Management approaches to data, Getting the most out of KPIs, and How to measure success against strategic vision and objectives
4. Make sure you build a reverse gear
If your hypothesis fails - the innovation does not produce a measurable improvement, or worse still, produces a measurable decrease - then you need to be ready to reverse it out.
All too often organisations are unable (because it is technically too difficult) or unwilling (because they are too emotionally invested in it) to reverse failed innovations out. Generally, it takes a little more effort to build innovations which can easily be reversed out, but it is worth it, in the long run, to keep your innovation process honest.
Lots of pundits talk about the need to embrace failure. You can only do so, if you can reverse it out, and learn from it before trying again.
See also: Strategic Analysis: Old Mutual changes its replatforming partner