Every organization needs to reinvent itself to survive over the long term. Some are in a stronger position to do this than others. There are three areas you need to consider if you want to quickly assess your company. They are leadership support, organizational design and innovation practice.
1. Leadership support - how much time does your CEO spend on innovation each week? (the Rita Mcgrath Test)
Your CEO needs to dedicate a significant amount of time to innovation. If it’s not 20-40%, you won’t get innovation.
2. Organizational design - where does innovation live in your org chart?
Innovation needs to live at the top of your organization. You must have a growth and innovation leadership position. This is separate to the CTO or Head of R&D. This must be a 100% time role and this person must report directly to the CEO.
3. Innovation practice - how good are you at killing ideas/projects?
Innovation practice is the ability to explore new ideas, test them and kill (or successfully retire) those that don’t produce evidence.
This allows you to reallocate resources to those projects with the most potential. The best ideas emerge over time.
It is vital you make it safe for teams to fail as this is a natural part of the innovation process. Not every project will succeed. So teams need to feel confident that they can try again, without risking their careers.
As a rule of thumb, you need to kill nine out of ten innovation projects rapidly. You only invest more resources in those teams and projects that have strong evidence.
Answering these three questions will quickly give you a sense of how well your company is set up for innovation.
This post is based on the first video in the series of interviews with Alex Osterwalder called Driving Innovation. Check out the video below.
If you’re interested in learning more, register for Strategyzer’s virtual masterclass called Building Invincible Companies.
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