Impact Innovation Group has been working with the Australian Institute of Company Directors to host an event on practical innovation for directors, focusing on how practical innovation approaches can lead to lower risk and enhance impact.
Are you a Director or Senior Executive responsible in ensuring value from Innovation Programs?
Here are five key insights we provide boards and senior executives of SME’s, ASX and large corporates, NFP’s, and Government departments:
1. It starts with the board entrepreneurial skills:
If board members are not entrepreneurial, an internal innovation system rarely works. Sure, great ideas are identified but they are rarely implemented due to a lack of board support.
2. Effective co-developed strategy and plans can derisk innovation:
Large organisations still engage consulting firms to come in and create their innovation strategy and planning documents. A fancy document with infographics is often created, presented to the board and senior management, and signed off as ‘being done’. This is the biggest trap we see organisations falling into, as the documents essentially contain assumptions and no process to replace those assumptions with facts (i.e. a process of testing the planning assumptions). From our experience, co-designed strategy and plans actually get implemented and achieve outcomes. Fancy documents sit on the shelf as internal staff don’t feel that they can change what the consultants delivered.
3. Board papers need innovation reporting:
When working with a company that is doing R&D, we are constantly amazed that the board papers don’t include updates on progress. Similarly, for organisations with internal innovation systems, innovation progress is rarely reported to the board. When boards don’t demand this information they are communicating that innovation and R&D are not as important to the organisation as other elements of the business. If this is so, why bother spending money on innovation in the first place!
4. Board members need to participate:
Our staff sit on a number of boards and advisory boards and are constantly encouraging other board members to participate in the company’s innovation program. It is no surprise that those that participate start to understand the challenges and actively assist in improving the system. Those that don’t, see innovation as a waste of time. If there are no board members actively participating in the innovation program (even if it is to suggest or vote on ideas) then it is no surprise when boards close innovation programs down.
5. Return on Investment Focus:
Associated with reviewing innovation progress in board papers, is the need to ensure that return on investment is the constant focus of the innovation program (even if the return is scheduled for 3 to 5 years’ time). This doesn’t necessarily need to be a monetary return, but the benefit needs to outweigh the cost. Again, the board need to understand the timeframes and what their return on investment targets are.
If you are a board member or senior executive reading this please share it with your colleagues. Your interest in this topic suggests that you understand the value of innovation to your organisation. The more board members and senior executives that agree with your thinking, the greater the likelihood that you will have an effective innovation system that is driving the differentiation, competitiveness and growth aspirations of your organisation.
Brian Ruddle is the managing director of Impact Innovation Group one of Australia’s fastest growing innovation advisory firms with clients including ASX listed companies, government innovation departments, not for profits, universities, high growth startups and venture capital firms.
Call + 61 (0)7 3041 1128 and talk to us about how you can get better visibility of the value generated by your innovation program, and improve your return on innovation investment.
– Brian Ruddle, Managing Director