Making Innovation a Core Capability

“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.”

– Peter Drucker

Innovation Light BulbsIt should come as no shock that marketers love talking about innovation. And you’d think that if — as Drucker once said — marketing and innovation are the only two basic functions of the enterprise, then the marketers who can crack the code on innovation, bringing the two together into a single, sublime discipline, would be bathing in tubs full of hundred dollar bills. But somehow, most marketing innovations amount to little more than shiny object chasing; one-off gimmicks followed by second, third and fourth rate rip-offs; or promotional razzle dazzle that pays little attention to product, pricing or place. If you’ve spent more than a wee bit of time in this business (brand-side or agency, it doesn’t matter) you’ve heard the lip service, maybe even lipped it yourself, then wondered why your big innovative idea didn’t actually do much to drive business impact.

The problem, in my opinion, might be rooted in a shoddy definition of marketing innovation. A definition that is more likely to name check channels, apps or technologies than it is to cut to the chase. True marketing innovation better addresses customer needs, opens up new markets, or newly positions a firm’s product on the market, with the objective of increasing the firm’s sales. Period. This may not be an especially sexy POV, but that doesn’t necessarily mean you need to unearth something new to the world, or even new to your category. You just need to do something new for you.

And let’s be honest — in an age when the rules of marketing (and business) change almost daily, marketing innovation just might be (is?) the main engine for business growth. It should be a component of every plan you pen and every program you put in the market. Because, as they say, “If you’re standing still, you’re moving backwards.”

But that means innovation has to happen more than once in a blue moon. And when it does happen and it actually works, you need to know how to repeat your success over and over and over again — not by aping yourself but by applying lessons learned and principles proven. For this to happen, innovation can’t be an event; it must be always-on. It can’t be happenstance; it must be a core capability of your organization.

This is something I’ve been thinking about for a while and I’ve developed a simple — but I hope elegant, in a mutually exclusive collectively exhaustive kinda way — framework for making innovation a core capability. My point of reference may be marketing, but I’d say my framework applies no matter when, how or where you hope to establish a truly sustainable innovation capability in your organization.

And so — because as anyone who has worked with me knows, I do love me some alliteration — let’s take a look at The 6P Model for Making Innovation a Core Capability.

6P Innovation Model

That sure is a pretty picture, but let’s unpack it a little and you’ll see what I’m talking about.

Align Innovation With Your Business Strategy

Purpose: Innovation of any kind — not least of all marketing innovation — must (not should and certainly not could) be purpose-driven. In other words, it must be fully aligned with your organization’s overarching marketing strategy and its foundational business strategy. This sounds obvious, but I’ve worked with enough big brands and inside enough agencies to know that — more often then not — this clear sense of strategic purpose is the exception more often than it is the rule. We have a name for innovation for innovation’s sake — we call that the shiny object syndrome. And while a quick, creative approach to some new new thing can sometimes pay-off, the “once is witty, twice is shitty” principle comes on fast, and you’re rarely left with a properly grounded, repeatable process for making magic time and time again.

Purpose means starting with why  — why must we innovate in the first place. It means considering what — what do we hope to achieve through innovation. It then uses your overarching corporate strategy as a no-nonsense filter to turn innovation into a how — how will innovation in this area empower us to more effectively deliver upon our top priorities; whether those priorities are revenue generation, top notch service delivery, cost savings, vertical or horizontal expansion, or just about anything else that differentiates your company from its competitors.

Are you grounding your call for innovation with a clear sense of purpose?

Build an Innovation Program of Substance

This is where the rubber hits the road, as an organization puts in place all the necessary elements to deliver on its innovation purpose (or purpose-driven strategy, if you will). Here lies the difference between talking a good game and actually doing the work. Truly sustainable, always-on marketing innovation isn’t an event — it’s not the stray brainstorm the account director or brand manager organizes when it’s time to come up with something new and different. And it also isn’t rampant, unfettered “think outside the box” creativity. It needs to be (or if it isn’t today: become) an organizational capability — just like account management, media planning, art direction, or even accounting. And like any core capabilities, you’ll need the right resources in place. And that’s when we come to People, Process, Platforms, and (we’re working in the social era, after all) Partners.

People: You’ve already got people, right? But have you got the right people? If you’re like many companies I’ve worked with over the years, you probably have senior leaders on the wrong side of the digital divide (that’s less about age and more about mindset btw), too vested in the status quo, too resistant to change (or scared of the repercussion), or too beholden to this quarter’s P&L. You probably have staffers too tapped with their current workload, who mean well but lack the charter to drive change from within and the authority to make it happen, or might be disengaged or disenfranchised (it’s an epidemic). All of that said, these people may be very good at what they do and incredibly valuable to the company. But they’re not the right people to drive an innovation effort.

This doesn’t mean you need to restock your team or your company with Steve Jobsian innovation super-humans. iPhone-caliber marketplace disruption is only one flavor of innovation, and it may or may not be what your business needs — and you certainly don’t need, and probably can’t withstand daily disruption anyway. It also doesn’t mean you need a wonk with a Monocle subscription and the word innovation on his business card. So what do you need? The right mindset, for starters — individuals committed to the challenge of change; who are well aware of the world outside your walls; who can view your business challenges through a series of new lenses, apply solutions from beyond your account team, department, company or even industry. And then you need to guide them, support them, and give them permission to fail. (Which — not coincidentally — moves us nicely to the next P.)

Are you staffing your business with innovative thinkers that bring uncommon, outside perspectives and approaches to their work every day?

Process: OK, so now you’ve got your free spirits and free thinkers — set em loose, right? Well, not exactly. Sustainable innovation, done right, means you’ll capture new ideas from all corners of your company. All. The. Time. You know how you’ve gone into all those standalone brainstorms, spent an inspiring hour batting about cool new concepts, then went back to your workaday world as your new ideas die on the vine? We all have. A true innovation capability has clearly defined processes that govern how ideas get surfaced, how they get evaluated, what criteria they must meet to advance to the next stage, and what happens when the company commits to testing the idea in the market. Process may not be sexy, but it’s necessary if you want your innovation efforts to succeed.

Have you defined and communicated clear processes to guide your innovation efforts?

Platforms: Systems and software go hand-in-hand with old fashioned process, making it easier — and at scale, possible — to move ideas to execution efficiently, cost effectively, and with the right number of checks and balances. My purpose here isn’t to pimp specific platforms; there are lots (from Imaginatik to Innocentive, from Brightidea to Spigot). They make your life as an innovator easier and the output of your process more viable. Without them, even the best innovation intentions will give way to chaos over time.

Do you have innovation platforms in place today?

Partners: You didn’t think you could do it all yourself now, did you? If you truly intend to innovate (to create new value for customers in order to realize new value for the company) you might want to think of your customers themselves as your partners in innovation. You may know this as crowdsourcing… But as much as the lines are blurring between company and customer, the lines are also blurring between company and company (even company and competitor). Large corporations might consider ways to bring nimble upstarts into the fold in order to up the fresh ideas quotient, while leading edge start-ups might consider how well resourced multinationals could fund edgy new ideas. Public sector and private sector can work together. The possibilities for partnership are limited only by your willingness to collaborate with others.

Do you involve your partners — customers, competitors, collaborators and other companies — in your innovation approach today?

Define, Measure & Reward Innovation Success

Performance: Way back at the First P, I wrote that everything starts with purpose. But, truth be told, performance is as good a place to begin and one of the most critical components for innovation success. Let’s be frank — it feels good to talk about innovation, but it’s a different matter to rework the way we incentivize our people to make it worth their while to bring new ideas, process improvements and more to the table on a routine basis. Simply put, innovation will never become a core capability (much less a cornerstone of a company’s culture) when the only measures of performance relate to near term profits, successful completion of day-to-day tasks, and other measures of the here-and-now. Of course those things are important — there’s no sense in prepping your business for tomorrow while you run the risk of going out of business today. But a truly innovative organization knows that the right incentives, rewards, and recognition systems are necessary conditions for innovation excellence. Think intrinsic rewards (status, recognition) as well as extrinsic rewards (prizes, money). Think beyond the check box on the performance appraisal…

How do you measure the impacts of innovation and reward the people who make it happen?

Now… like innovation itself, the 6P model is a work in progress. Open to inputs from partners — like you. I’d love your thoughts. Chime in. In the meantime, I’ll be working on a Part II of sorts that takes a deeper dive into a framework for generating, vetting and bringing to market truly innovative marketing (and business) ideas.

Like this post and want to download the 6P framework as an ebook (PDF format)? Grab a copy on Slideshare.

Need some help putting this model to work for your business? Get in touch.

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