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Who manages innovation?

By Gary Gustafson

Gary Gustafson Blog 8-13We are living in the innovation age, a time when a single new idea can render an entire industry obsolete. Therefore innovation is a primary resource for success and needs to be managed in it’s own right. It would seem that every manufacturer would develop a clear, if broad, path to foster this energy source but often this is not the case. New ideas sometimes must struggle to the surface like a refugee from a sinking ship. Indeed, it can be difficult to tell who is manning the life raft for innovation and who are the sharks looking to tear it apart. Management of innovation is an art and a science. There are different categories of progress within the Innovation3 (cubed) spectrum: Define, Develop and Deliver. Gatekeepers with different kinds of expertise are needed for each type. How a manufacturer manages this process is critical to success.

Different kinds of innovation

There are process innovations that are transparent to the end-user but reduce cycle times and increase first-time quality for the manufacturer. There are avant-garde styling trends that are chiefly of concern to sales and marketing who need to evaluate it for showroom floor appeal or other kinds of buzz. There are performance advances that help a vehicle do the same thing but more of it, or do something new altogether. There are logistics improvements that reduce WIP and increase inventory turns or help permit more reactive manufacturing schedules. These are very different types of innovations and require different skill sets and experience levels to assess. An extreme example I have knowledge of was when the owner of a now-defunct manufacturer was convinced that a tiny electrical generator could keep his Off-road Electric Vehicle running at full power almost endlessly. If the owner had allowed a credible source to critique the design he would’ve saved the cool million he wasted integrating and selling an 1800 Lb UTV with a 4hP generator and the equivalent of a Flux Capacitor*.

Different sources of innovation

Employees making recommendations regarding their own work responsibilities are often the best source of ideas for improvement. Some Polaris UTVs have benefitted very much from this input. Suppliers are another source of knowledge. They can make or break the introduction of new technology. Market research can also provide a wealth of ideas as long as the right questions are asked. A new branch of market research using crowd sourcing is proving to be very successful in other product spaces and Harley-Davidson noted that it is making use of the research in motorcycle designs as well. The bottom line: Sources of innovation are everywhere and your company is either a sponge or a stone with respect to them.

The innovation matrix

One concept for innovation management is similar to the matrix organization itself. The genesis of the idea can come from anywhere, but it must plug into the related expertise for a first-pass review and it is important for people in the organization to send it where it needs to go. Anywhere in the organizational matrix when people are not empowered and incentivized to make innovation a priority, it will usually die like throwing a firecracker into a bucket of water. The law of inertia, also known as “familiarity breeds contempt,” is always in play and it needs to be defeated for innovation to grow. Just because a supplier has had delivery issues doesn’t mean it should be stopped from submitting a new technology to engineering. Just because an engineer is typically behind on project timelines or doesn’t raise the roof as a presenter doesn’t disqualify him or her from having great ideas. Innovation needs to be managed as a separate resource.

Innovation Management

The innovation manager needs to make sure that the organization has no rocky sections that resist change. Employees should be evaluated by how many new ideas they have helped to forward. Part of a supplier scorecard could include the number of new ideas they are bringing to the table. Genuine innovation management would even include a system of accountability whereby innovative ideas are directed to more than one spot in the matrix so that no idea dies prematurely due to the personal agenda or laziness of one person. Without such cross-checks, it is difficult to identify who is truly resisting change. The innovation matrix thrives or stalls depending on how well upper management understands and incentivizes behaviors and attitudes. Each company has to answer the question of who manages innovation. Having no answer will eventually doom your company to failure.

*A Flux Capacitor is an imaginary device used in the movie “Back To The Future.”

Gary Gustafson is President of G-Force Consulting Inc, a company that connects world-class suppliers with powersports and O.P.E. manufacturers as well as providing custom market research and media relations for new product launches. Visit www.gforceconsulting.com to learn more.

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