This is part 3 of the review for The Boston Consulting Group’s The Most Innovative Companies 2020. If you are interested in the previous parts, please go to part 1 and part 2.
Making the system of making innovations
At the end this report emphasises that companies need to make innovations not only one time but multiple times. One time big hit does not help large companies to survive for a long term. They quote Tesla’s CEO, Elon Musk’s notion of “building the machine that makes the machine”.
I think there are a lot of challenges in even making only one innovation, and as Steve Blank repeatedly asserts that startups are not the smaller version of large companies, comparing small companies with large companies itself might be questionable. It is also probably BCG’s client base is mainly large organisations, and this could be just a sales pitch to them. However, it still seems to get some key points of innovation management.
Their goal is really ambitious. While the report acknowledges the dynamics and complexity of innovation systems, it also suggests that the system needs to be regularly maintained and lists up 10 essential aspects of innovation systems:
- Innovation Ambition
- Innovation Domains
- Innovation Governance
- Performance Management
- Organisation and Ecosystems
- Talent and Culture
- Idea-to-Market Fit
- Project Management
- Funnel Management
- Portfolio Management
To be honest, I think this list looks pretty daunting, but it also seems to be quite comprehensive. If you use this list as a checklist of your organisation’s innovation capability, it will be practically useful.
- Innovation Ambition – Do you have a clear vision and communicate well with your teammates and employees?
- Innovation domains – Do you know what to innovate based on customer insights?
- Innovation governance – Do you allocate right resources to support innovation projects?
- Performance Management – Do you give incentives to innovation activities that need to be measured with different indicators from the ones for scaling?
- Organisation and Ecosystems – Do you involve and collaborate with diverse stakeholders and resources?
- Talent and Culture – Do you assign the best talents to innovation projects?
- Idea-to-Market Fit – Do you tackle truly important problems that customers face?
- Project Management – Do you understand your strength and utilise the value?
- Funnel Management – Do you evaluate your projects and realign your resources to focused projects?
- Portfolio Management – Do you diversify your portfolio to take some risks to capture unproven opportunities of innovations?