• The creation of new processes and tools to capture innovative ideas;

• The rapid development of new products/services; and

• The improvement of the quality of their outputs to customers.

Cleveland (2004)

Deloittes (2004)

• Create a culture of innovation that aims to reward both “sustaining” and “disruptive” innovations. These organisations are skilled at sourcing ideas externally, developing business cases which lead to sound investment decisions, recognising gaps between existing products performance and new designs, and in choosing appropriate organisational models/marketing channels for putting innovation into practice.

• Exploit innovation by turning ideas into growth and profits (maximising profits throughout the entire lifecycle of new products was seen as a key component of a successful innovation strategy).

• Meaningful work i.e. work which staff understand has an impact upon the organisation and its customers. Research shows that doing work that is meaningful plays a crucial role in individual professional development and innovation. It constitutes a prime social and intrinsic people motivator. Involvement in meaningful work can encourage individual innovation and group cooperation.

• Risk-taking culture i.e. lowering the risks of experimentation and recognising that controlled risk taking can be an opportunity leading to potentially higher returns.

• Customer orientation i.e. identifying the needs and wants of both established and potential markets, and delivering the products and services to satisfy those needs. Customer orientation applies to existing products and to investigating new business models and markets.

• Business intelligence i.e. an organisation's capability to detect market/business trends and to understand strategic issues relating to its environment and competitors.

• Open communication i.e. the free flow of opinions to support change and the creation of an environment in which it acceptable to challenge practices that do not appear to add value.

• Empowerment of employees to independently identify and address problems. This can enable the organisation’s skilled people to have ownership of innovation in their area of expertise.

• Business planning processes and techniques i.e. these are required and assist the organisation to investigate options associated with the development of new value adding products and services.

• Learning organisation i.e. one in which employees share their knowledge, and in particular concerning customers. This can help an organisation to keep growing and changing in keeping with its environment.

Hindrances to innovation

In many instances innovation, and the changes that it can bring, are seen as a disruptive influence.  Many operational managers tend to protect current product lines and services, discourage innovation, attempt to maintain the status quo, and keep in place what appears to be working – the ‘if it isn’t broken, don’t fix it’ attitude. They may find it difficult to sacrifice short-term profits for the sake of long-term organisational benefits. Conflicting incentives, funding, accountabilities, and lack of processes for encouraging and enabling innovation can also dampen new ideas and slow the innovation process.

• The Business Model Trap:
• Conforming to current business models. Disruptive technologies often require modified business models for commercially viability, and if opportunities are shaped to conform to current business requirements their potential may be lost or diluted.
• Slow change. Organisations may be well aware of imminent competitive changes but are unable to accommodate the implications within their current business focus. Then later when market shifts occur the organisation can find itself lacking effective strategic options. Even when the appropriate options have been chosen, organisations will require new competences to execute them.

Markham et al, (2004)

• Creative Innovation- this was used primarily within small organisations and depended heavily on “the big idea.” Creative Innovation tended to be less concerned with processes and giving more weight to inspiration. Strategic thinking and planning were less important. Organisations using the creative innovation model tended to be less involved with leadership/execution, and encouraged creative cultures, taking risks, being aware of trends and exercising curiosity.

• Dynamic Innovation – this was used by a wide range of organisations and tended to combine the best aspects of structured and creative innovation. The dynamic approach favoured strategic thinking and planning, along with a respect for execution. It depended on cross-functional collaboration and made senior executives responsible for innovation. Similar to the creative process, the dynamic approach emphasised creative cultures, however incremental improvements were emphasised rather than the big idea. The dynamic innovation process was designed to constantly adapt to change while maintaining an extensive network of collaborators. It was required to predictably generate results, but be willing to incorporate new elements and paths for achieving those results. Most notably, it required an ongoing stream of fresh information from the market place, the corporation, industry experts, the economy, and many other variables.

• Structured Innovation - was designed to be replicable and efficient and use prescribed routines. Structured innovation tended to depend more heavily on internal leadership, strategic planning, effective execution of ideas, shareholder pressure and financial resources than the other approaches. It placed less weight on having a creative environment, the value of curiosity, or on risk taking. Structured innovation was perceived to have a low level of risk and was popular among both medium sized and larger organisations. Management of the process was typically delegated to junior executives and was commonly the sole province of product management or R&D departments.

The percentages of organisations using each innovation methodology were reported by Cheskin (2003) as:

Methodology	Company Size (no. of employees)
	Small (1-99)	Medium (100-999)	Large (1000+)	Totals
Numbers	263	115	152	544
Structured & Formalised	9%	21%	30%	18%
Informal and Creative	37%	16%	15%	26%
Dynamic	33%	49%	41%	39%

How successful was each type of innovation programme? Organisations rated themselves as follows:

Reverse Engineering

Reverse engineering can be used as an innovation strategy whereby an organisation can discover innovation methods used by competitors and thereby stimulate its own innovation processes for developing new products. Reverse engineering begins with an end product and works back through the design process to arrive at a detailed product definition. This method also attempts to uncover as much information as possible concerning the design ideas associated with the product. Reverse engineering is used in such diverse fields as software engineering, automotive, consumer products, microchips, chemicals, and mechanical designs. This technique is also often used for breaking down a competitor’s product to see how it was made and for analysing its potential costs, then using this data to improve the organisation’s own products. To do this, a competing manufacturer may purchase a new machine and disassemble it to learn how it was built and how it works. In certain situations Computer Aided Designs (CAD) may at times only be arrived at satisfactorily through reverse engineering a physical product. Reverse engineering may also be used in the design and development of services.

Note; further helpful information relating to innovation can be found in Volume 1 of the Management Briefs, specifically: Issue 5 - Managing Innovation; and Issue 10 - Employee Suggestion Schemes.

An Innovation Checklist

The following innovation checklist developed by Sebell, (2004), provides nine critical success factors with which to rate how well an organisation is using and developing its innovation practices.

The checklist addresses nine critical success factors associated with successful innovation practices. Each of the factors is rated from 1 - 5 with 5 = Outstanding and 1 being = Very Poor.

A rating of less than 35 merits a review of current practices and how well the organisation is positioned to face the future.

Is there a compelling case for action?	Score  [5,4,3,2,1]
Is there an inspiring, shared strategic vision? Notes: The innovator must clearly understand and share the organisation’s vision and strategy to provide direction for hitting the "Strategic Innovation Sweet spot."	Score  [5,4,3,2,1]
Do you have a fully aligned innovation agenda? Notes: Innovators must know the role of innovation in the strategy, and the scope of innovation desired.	Score  [5,4,3,2,1]
Is there visible senior management involvement? Notes: Active sponsorship is critical to the success of breakthrough or transformational innovation. Incremental innovation can be "delegated" or "empowered." Breakthrough and transformational cannot.	Score  [5,4,3,2,1]
Do you possess a decision-making model that fosters teamwork in support of passionate champions? Notes:  Innovation cannot happen without a decision-making model that is different from that used for existing business. Judgment is key in innovation. Informed judgment requires ‘sponsors’ and ‘champions’ who support and guide the effort and who represent it to management, where resource allocations and strategy and investment decisions are made.	Score  [5,4,3,2,1]
Do you have a creatively resourced, multi-functional team? Notes: Diversity of thinking, diversity of expertise, and multi-functional resources are key to innovation.	Score  [5,4,3,2,1]
Does your organisation have an open-minded exploration of the four key marketplace drivers of innovation? Notes: Few leaders actually want to innovate-to take risks and invest the resources that innovation requires. Rather, they do it because they are forced to do it. Something happens that threatens them. Four common drivers are the consumer (or customer), unforeseen sources of competition, changes in regulation, or advances in technology.	Score  [5,4,3,2,1]
Does your organisation have a willingness to take risks and to see value in absurdity? Notes: Risk is inherent in innovation. The higher the level of innovation desired-the greater the risk. That which is truly new has no frame of reference, nor benchmark.	Score  [5,4,3,2,1]
Does your organisation possess a well-defined, yet flexible, implementation process? Notes: For breakthrough innovation, the implementation process must provide direction and support, but it must also be flexible to adapt to the challenges that are part of new ventures and to accommodate a variety of value-generating outcomes and business models.	Score  [5,4,3,2,1]
	Total Score  [              ]

* See notes at end of article for more innovation assessment tools.