WHY THE USE OF INNOVATION TOOLS FAILS

INTRODUCTION: WHAT IS INNOVATING IN ESSENCE?

After several implementations in Latin America in recent years in PCAinnovation, related to: innovation management systems (IMS), innovation management offices, ISO 56002, Innovation Hubs, Innovation planning, portfolios of innovation projects, creation of ecosystems, among others, we are increasingly clear that at the end: " Innovation is not about creativity, opportunities and intentions, managing processes, developing competencies in teams, generating disruptive ideas and solutions and other enablers, tools or processes; in essence, innovation is a problem of allocating resources and investing decisions to create value."

Today leaders talk about the importance of innovation as a driver of growth, phrases such as: "10x growth" or "Accelerated growth" or "Disruptive growth", among others, are in the speeches and in the current vocabulary of leaders. However, then when it comes to focusing people's attention on innovation, creating long-term competitive advantages, and building the future, those same leaders tend to focus on short-term operational product and efficiency improvements and other supposedly "high-certainty" investments, without taking big risks.?which represent much simpler efforts than developing disruptive technological advances or new transformational business models, that is, focusing on investing in new forms of innovation that are "safer", but which tend to create less potential to generate sustained growth and extraordinary returns.

According to the consulting firm Mckinsey (The Innovation Commitment, 2018): "This dichotomy between the vision of leaders to invest safely and in the short term (exploitation), clashes with the need to create disruptive innovations that will exponentially grow organizations in the long term (exploration), which are of greater risk and high uncertainty,?what Clayton Christensen called the "innovator's dilemma", that is, "The Key to Innovation is in Maximizing today (exploitation), while building the Competitive Advantage of Tomorrow (exploration)", that is, making an adequate balance or balance of exploration and exploitation projects.

WHY THE USE OF INNOVATION TOOLS FAILS – USE 3Ss INNOVATION CRITICAL SUCCESS FACTORS (CSFs)

Using a tool whatever it is or how popular it sounds, such as the center of innovation management, is very risky, according to MIT (Can Design Thinking succeed in your organization? ?MITSloan Management Review, December 2022) "Design Thinking offers a way to explore uncharted territory, discover options, and solve complex business problems. But as much as leaders need new approaches to create competitive advantage, inspire innovation, and discover new paths to growth, they often don't get the results they expect," it's just one example of why understanding how to build an innovation management system.

The Critical Success Factors (CSFs) of innovation are the key ?areas of the organization to ensure the success of innovation management. Identifying, communicating and securing innovation CSFs is essential to ensure that your innovation management system remains focused on what needs to be done, to achieve efficiency, effectiveness and value building for different stakeholders. , while improving the competitiveness of the organization and its success in the medium and long term. CSFs are those that are the most important to the success of your organization, i.e. the essential elements to pursue or monitor the desired outcomes.??Generalmente are not more than the five most significant.

This article describes the critical success factors (CSFs) of innovation, which solve this dilemma of the innovator described above, improve the reliability, efficiency and effectiveness of innovation, by which leaders must ensure their construction, improvement and assurance of their focus on innovation management, these?they are: ensuring that innovation management is systemic, systematic and sustainable. Since these FCEs act in an integrated or interdependent way of another, as a true management system, not in isolation or independently, we have called them as: "the 3Ss of innovation: systemic, systematic and sustainable" (see figure #1):

Figure #1 – The Three Critical Success Factors of Innovation

SYSTEMIC INNOVATION:

Innovation must be managed from a systemic perspective, thus understanding the "innovation management system (IMS)", as a set of interrelated processes and elements, which interact with each other, with the purpose of creating value. The systemic approach to innovation means managing all components of the organization, as a unified whole, to achieve strategic innovation objectives and create value for different stakeholders. It also means managing your organization within the context of an interconnected ecosystem of expert partners, which presents opportunities for new relationships that drive efforts to innovate.

The specific alignment, synchronization and integration to efficiently and effectively perform innovation processes within an organization, make system management successful. The systemic approach means understanding the organization as a whole, due to its interaction, incorporating key elements of the business, including its key competencies to innovate, strategic objectives, strategic intentions, systems, subsystems and processes which work and cooperate in an integrated way, so that the individual components of its innovation system operate in a fully interconnected way,?unified and mutually beneficial to deliver excellence in performance, results and value creation.

In addition, the organization exists within a business ecosystem: a network of organizations, including their partners, suppliers, collaborators, competitors, customers, communities and other relevant organizations inside and outside their sector or industry, which, due to their experience, core competencies or specialized knowledge, are key to the management, efficiency and effectiveness of innovation. ?Within an entrepreneurial ecosystem, systemic approach means understanding that your organization is part of a larger, expanded whole system.

When your organization adopts a systems perspective, your senior leaders focus on strategic directions and known or unknown customer expectations. Its leaders monitor, respond and manage the performance of the innovation management system, based on its results and the creation of value for the different stakeholders.

With a systems perspective, the analysis of internal and external context, technology inventories, the requirements of customers and other stakeholders, mainly the unsatisfied, the purpose and vision of innovation, the strategic axes and fundamental objectives and goals of innovation (Vital few innovation objectives, VFIOs), organizational risks and other key strategic elements are used,?to identify the strategic intentions that direct the opportunities, the processes of ideation and development of innovation projects and portfolios, which must be linked to the resources and support processes, the systems of evaluation of the performance of the innovation and the learning and continuous improvement of the innovation management system, all this within the context of an innovation ecosystem,?comprehensive and integrated to ensure the efficiency and effectiveness of the innovation management system (see Graph # 2):

?Graph #2 – Relationship between Process-Subsystems-System-Ecosystem ??????????????????????????????for Innovation Management based on ISO 56002

From this systemic perspective, the innovation management system can be understood by the interrelation between its four subsystems and the processes that compose them: discover, develop, results and learn and improve; and all this as part of a much larger business partner ecosystem, which works to drive, develop and ensure the success of innovation, value creation and accelerated growth of the organization. Understanding of this systemic approach to innovation, driven by ISO 56002 (IMS- Innovation management system) and the need to innovate through ecosystems, many of the innovation tools such as: Brainstorming, Affinity Diagrams, Design Thinking and others related to the development of innovation, through events, such as:?Hackathon, Ideathon or BootCamps; they promoted the development of opportunities and innovation process, that is, a team had an idea, which regularly solved a problem and then followed a process of: empathizing (putting themselves in the client's shoes), defining, ideating, prototyping and validating.

However, these idea-based innovation processes are one of the biggest mistakes and blurs of innovation is the use of innovation tools under an "Idea Drive Innovation" (IDI) approach which according to Anthony W. Ulwick, in his book entitled Jobs to be done - Theory to Practices - Idea Bite Press 2017, Companies that employ these IDI-based ideation approaches disappoint for two reasons: (1) managers are often paralyzed by the number of ideas that are generated, as they lack the ability to evaluate and prioritize them properly. Consequently, they are flooded with hundreds of ideas and have no way to effectively determine which are the best; and (2) only 17% of new product ideas that are developed are successful in the market, making ideation a highly inefficient and broken business process.

On the other hand, the innovation process under the systemic approach, which means: "generate innovation based on value" (Value Drive Innovation- VDI)", is initially based on starting with the end in mind, that is, having first the clarity of the strategic intentions of the organization that give the orientation for the processes, subsystems, systems and ecosystems of innovation,?since as indicated by one of the eight principles of innovation, called focus on realizing value: "the purpose of innovation is to generate value, whether financial or non-financial, through the identification, understanding and satisfaction of the needs and expectations of stakeholders" (ISO 56002, clause 4).

This continuous assurance of compliance with strategic intentions to ensure value creation throughout innovation management allows: (1) instead of generating hundreds of questionable ideas, define solutions that explicitly address the most neglected needs of your customers and the?strategic intentions of the ?innovation; (2) only innovations that generate customer value, strategic competitive advantage, growth and results are considered; (3) the innovation process from the beginning is aimed at results, and value creation; and (4) results in the conceptualization of feature sets, concepts, solutions, and business models that are sure to provide significant value to customers and stakeholders; and (5) using innovation tools.

According to Anthony W. Ulwick, in his book Jobs to be done - Theory to Practices - Idea Bite Press 2017, he indicates that the systemic approach to VDI innovation has a success rate of 86%. This improvement between systemic innovation based on VDI value versus an innovation process based on IDI ideas, which is between 86% success rate versus 17%, represents a good example to understand the difference in efficiency and effectiveness of managing innovation with a systemic approach, that is why represents one of the critical success factors (FCEs) of innovation management.

SYSTEMATIC INNOVATION:

Achieving the highest levels of innovation efficiency and effectiveness and value creation for customers and other stakeholders requires a well-executed approach to organizational learning, including knowledge sharing through systematic processes. In today's demanding environment, a skilled and empowered workforce and effective organizational knowledge management are vital assets. Organizational learning includes the continuous improvement of the innovation management system and ecosystem; the adoption of best practices; and adjusting to significant and discontinuous changes or innovations that lead to new goals, approaches, products and markets. Learning should be integrated into the way your organization operates. This means that learning: (1) is a regular part of daily work; (2) results in the resolution of problems at their source (root cause); (3) focuses on building and sharing knowledge across your organization; and (4) is driven by opportunities to effect meaningful change and transformation. Sources of learning for innovation include insights from employees and other ecosystem members, research and development, customer insights, exchange of best practices, development of competitors, advancement of technology, performance of innovation processes, benchmarking, and impact on value building.

Organizational learning related to continuous improvement and innovation can result in: (1) greater value to customers, through new, disruptive and improved products and services; (2) the development of new opportunities for transformational and disruptive business models; (3) the development of processes, automation, digitalization and their radical improvement; (4) innovation in reducing errors, defects, waste and related costs; (5) increased productivity and operational efficiency and use of all its resources; (6) increased performance in making social contributions and environmental sustainability; and (7) greater agility in managing change, resilience and disruption.

The continuous and disruptive improvement achieved by innovation management is maximized when activities, processes, subsystems, systems and the ecosystem undergo cycles of improvement or successive learning, based on evidence and impact on innovation results, including results related to innovation processes, the portfolio of innovation projects and their agility in management,?cycle times and speed of innovation management, efficiency in the use of innovation-related resources and the impact of innovation on both business results and value creation for customers and other stakeholders.

According to ISO 56002, the key processes to generate this learning, continuous and disruptive improvement of innovation management, represent: (1) the analysis, monitoring and evaluation of the innovation management system, (2) the innovation measurement dashboards (See Graph # 3), (3) the performance of internal and external audits, and mainly (4) the managerial review and the involvement of the leaders in the improvement of the processes of innovation management.

According to the new ISO 56002 standard for innovation quality management, the operational processes of innovation (See graph #3) represent a continuous (non-linear) flow, by which ideas become projects, prototypes, development and putting on the market, so that value is finally generated for all stakeholders, which is focused on the interrelation of innovation processes, feedback and adjustment cycles or loops and continuous learning, that is:

Graph #3 – Continuous (Non-Linear) Flow of Innovation Operational Processes

Then, one of the critical success factors of innovation (FCE) is represented by the learning, continuous and disruptive improvement of the innovation management system, a process that must be systematic and which focuses on ensuring systematizing the improvement and repetitiveness of learning and the feedback loops, analysis and successive improvement, based mainly on evidence and other mechanisms such as best practices, knowledge management, competitive comparisons, benchmarking, research and development, ?customer findings, among other mechanisms of knowledge generation and learning, which allow to increase the levels of efficiency and effectiveness of innovation and mainly in the creation of value for customers and other stakeholders.

SUSTAINABLE INNOVATION:

The innovation management system must ensure results and balance the value for different stakeholders, generate loyalty and commitment, while contributing to the growth of the economy and the development of society. To meet the sometimes contradictory and changing innovation objectives that require balancing value for different stakeholders, innovation strategy and innovation portfolio projects, key requirements of customers and other stakeholders must be explicitly included. This will help ensure that plans and actions meet or override the different requirements of customers and other stakeholders and avoid mitigating the risks, uncertainty and adverse impacts of innovation.

Achieving results balanced in the performance of innovation is a critical success factor (FCE) for leaders, who must be directly involved in monitoring, analyzing and improving the performance and results of innovation. To guarantee excellent levels of performance, sustained trends in the results (more than 6 data) and become bechmarking in the main results of the innovation, is to ensure that the organization will be sustainable over time thus ensuring that innovation ensures operational continuity and long-term competitive advantages.

The leaders of the organization should also focus innovation efforts on contributions to the public and well-being, benefit of society and the care of natural resources. Therefore, being sustainable in innovation management is not only achieving long-term results, but emphasizing resource conservation, recycling and waste reduction. Innovation planning must mitigate the adverse impacts of the production, distribution, transportation, use and use of products and services.

Effective innovation planning must reduce or mitigate problems; in addition to providing a direct response if these problems occur, ensuring that the necessary support is guaranteed to maintain public awareness, security and trust of the organization in society. The organization must comply with laws and regulatory requirements, assuming these legal requirements as an opportunity to excel beyond its minimum compliance.

Leaders must consider within the management of innovation, well-being and social benefit, which means that innovation must support the creation of environmental, social and economic innovations that guarantee economic, social impact and acceleration of the innovation ecosystem in the places where the organization operates, in order to ensure,?this should include: supporting innovation education, accelerating innovation in society and other services; the pursuit of environmental excellence; be a role model for addressing socially important issues, such as diversity, equity and inclusion; practice resource conservation; reduce your carbon footprint; improving industrial and commercial practices; accelerate entrepreneurship in the communities where they operate, attract venture capital to support investments of the entrepreneurs of society, among many more.

Increasingly, such social contributions are customer requirements, mainly for new generations and other stakeholders. For a model organization to follow, leadership also implies the influence of other organizations, private and public, to partner for the development of the innovation ecosystem, social impact and the care of resources. For all these reasons, it is that the sustainability of both the performance of the results of the organization and the contribution to society and the care of natural resources is another of the critical factors of success of innovation.

CONCLUSIONS – 3Ss THE CRITICAL SUCCESS FACTORS:

Leaders must ensure the construction, improvement and guarantee of the critical success factors (FCE) of the innovation management system, in order to ensure efficiency, effectiveness and value creation in innovation management, for which innovation management must be systemic, systematic and sustainable. The management of the critical success factors of innovation (FCE) must be understood as an integral management of the three factors: systemic, systematic and sustainable.

A good example of this comprehensive management of innovation FCEs is when a chef prepares a cake. The cake requires some quality ingredients: eggs, sugar, flour, butter, salt, etc., in addition to requiring a certain level of oven temperature, for some time and the capabilities and mood of the chef.?Too little or too much of one of these elements can spoil the cake altogether. Success lies in the combination of elements.

Similarly to ensure efficiency, effectiveness and value creation for the different stakeholders of "innovation management", a success factor (systemic, systematic and sustainable) could not by itself, create the results and the expected value, if these three factors are not properly combined, for this reason is that the critical success factors (FCE) of innovation should be seen as 3Ss,?that is, the three factors interacting as a true system that maximizes the results and value of innovation.

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ABOUT THE AUTHOR:

Alvaro Reynoso, is an Industrial Engineer, graduated with a postgraduate degree in Total Productivity Management from the University of Miami and Master’s Degree in Business Management and Administration from EAE Barcelona. He is a certified evaluator of the Malcolm Baldrige Performance Excellence Program of the United States of America And the Ibero-American Model in Management Excellence - Fundibeq. He is Certified in Orange Belt in Innovation Magement System ISO 56002, in CPI Certified Professional innovator and in Black Belt in Lead Auditor in Innovation Management System ISO 56002, by the International Association of Innovations Professionals (IAOIP), where he is currently Director of the Latin American Chapter and Member of the World Board. He is currently the President of the Guatemala Innovation Team working on the design of the new ISO 56000 standard called Mirror Committee GT- TC279 – IMS ISO 56000.es director of PCAinnovation, a company focused on consulting and information systems for the implementation of ISO 56002 – Innovation Management System, supporting companies and institutions throughout Latin America,?He was also the winner of the 2020 Guatemalan National Innovation Award for augmented and mixed reality applications in the maintenance and training process in the industry. He is a facilitator in different certification processes in GIOB - Innovation Management at the Orange Belt level under ISO 56002 in Ecuador, Peru, Guatemala, Mexico and in other countries in the region.

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