How Innovation Governance Can Save Your Organization

By Patrick Stroh

We love innovation, don't we? It's fun; it's sexy; it's headline grabbing and member pleasing. We know constantly hear that we need to innovate continuously or get left in the proverbial dust. Yet there's another aspect to success that, at first blush, seems to be the opposite of the creative impulse: discipline, or (said another way) execution. Put this buttoned-up concept together with its dreamy-eyed sibling and you have innovation governance—something sorely needed in many organizations.

Innovation governance sounds like an oxymoron, but in fact it's an extremely powerful concept. It's the yin and yang for innovation impact—meaning apparently contradictory forces that are actually complementary, that create synergy. It's this elusive quality that helps organizations achieve more volume and value in their innovation portfolio.

An organization's value proposition needs to evolve about every three to five years at today's pace, and you simply can't evolve that quickly without thoughtful, systematic, and disciplined innovation. You need to be creative and ideate new solutions, but you need to execute with discipline to achieve the value. You need both sides of the equation.

 

Innovation = Creativity & Ideation Governance = Execution & Discipline

 

If you want to thrive and survive in today's world, you'll need to innovate—and that doesn't mean the random lightning bolt idea here and there, but predictable, relentless innovation. To get real, repeatable innovation value and impact, you must employ innovation governance. It's that simple.

Here are five ideas to help you drive innovation value at your organization.

Talk to Your CFO—Now!
Really, my CFO? you may be thinking. Yes—your CFO. Research shows that in more and more businesses, the CFO is getting tapped to support and drive innovation value creation. When you think about it, CFOs and the office of the CFO are masters at governance already, so aligning and applying their inherent governance discipline of reporting, analysis, and critical thinking to the creativity and ideation side of innovation is logical.

Many finance and strategy leaders are now being asked to lead and support innovation too. In fact, 67 percent of corporate senior finance and accounting professionals now support innovation in some fashion versus only 35 percent 10 years ago. This figure is predicted to rise to three out of every four finance leaders within the next three years.

Keep in mind the CFO doesn't have to be the key ideator of all innovation concepts and radical thinking, but he or she does need to be the master facilitator and enable the organization to provide ideas, develop those ideas, evaluate them, and, if decided on, implement them to drive innovation values.

Send A Message: It's Okay To Fail, But Fail Fast
As executive director, you set the right tone in the organization. Yes, you've heard this before. It's a cliché because it's true: What's valued by the CEO (and clearly communicated, of course) is translated into action throughout the organization. So permission to fail has to come from the top.

If you have a high-performance association that is used to achieving results, you may live by the mantra that failure is not an option. But with innovation, failure has to be an option. Sometimes you have to fail at a few things in order to succeed.

You need to clarify: In order to innovate, we have to be willing to try new things or execute differently, and that means that sometimes we will fail. That's okay—just fail fast, learn something from it, and keep driving to get value!

Once you have given your staff permission to innovate, you need to follow up by not punishing failure when it happens or the permission will ring hollow.

Create Multiple Innovation Channels Inside Your Association
Staff, members, vendors, and other constituents will all respond differently to various innovation channels. Whether you employ an Open Submission innovation channel, a Business Challenge channel, or maybe a Crowdsourcing Technology channel, some will relate and thrive in one channel and yet not in others.

The key is to find a combination of channels that work for your association and implement multiple channels to engage as many people as possible to solicit, develop, rate, evaluate, and implement ideas.

Measure Innovation
When you talk about innovation, many people struggle with how to measure it. This is one of the big value areas that governance can add to innovation—discipline and measurement. Be careful not to over-engineer that discipline and measurement, but you can't improve what you can't measure.

In the end, you have to be able to measure progress and value, or else you don't know what results you are achieving by luck and what results you are achieving through leadership and execution and that are repeatable. Plus, measuring sends the clear message that you are serious about innovation—especially when metrics are linked to evaluations and rewards. It's true that what gets measured gets done.

Innovation Comes in All Shapes and Sizes
Sometimes people talk and write only about the types of innovation that are sexy—new technology and rapid disruptive changes in businesses (think drones and Uber). Is this innovation? Absolutely! But innovation comes in many other forms and should be thought of in a portfolio fashion.

Think of innovative ideas and projects as falling into three buckets: incremental, distinctive, and breakthrough. This way you are valuing innovation ideas that are smaller and near-term oriented at the same time that you value larger or longer-term innovations. You need both sides of that range and probably a disproportionate amount of ideation focused right in the middle—distinctive ideas that will give you a competitive advantage in your value proposition and be realized in the next three to six months.

Facilitate and enable innovation in your organization that is conceived and executed across all sizes and timeframes. That way you will always have ideas and projects in the pipeline.

Innovation is no longer a luxury or something we talk about doing because it sounds fun. All organizations need to always be evolving their value proposition to keep pace with change.

A good strong marriage of creativity and execution is required to survive and to thrive. Associations that figure out both the yin and the yang of innovation, and nurture and structure their organizations in ways that allow this synergy to play out, are the ones that will be able to compete in an ever-more-changing world.

Patrick Stroh is President of Mercury Business Advisors, and author of Advancing Innovation: Galvanizing, Enabling & Measuring for Innovation Value! and Business Strategy: Plan, Execute, Win! He serves on the Board of Directors for the Institute of Management Accountants and was also appointed as a fellow in Palladium's Positive Impact Research Institute.