Why it's key to innovate every day - while you can

As engineers, you must never stop innovating. Businesses that stop innovating are likely to fail sooner or later. Remember Kodak? Never heard of them? Exactly. Kodak was once one of two giant corporations that dominated the global photographic film industry from the 1950s until the 1980s. Its principal product was photographic film that, once exposed, was developed in special camera shops (and later in pharmacies) into physical prints. Believe it or not, this was the way we all took pictures 30 years ago. But while Kodak was busy concentrating its innovation efforts on outsmarting its main competitor (Fuji), it failed to recognise how profound an effect digital photography would have on its business, despite having funded successful research into it. Nowadays, most of us have very good quality picture-taking and storage capabilities on our smartphones and no longer need to use photographic film – or even cameras. Who saw that coming? To conclude the story positively, Kodak has regrouped and is emerging as a force to be watched in the professional printing area. How did it do this? By transformation through innovation, of course.

Small continuous improvements to larger cost-saving projects

Innovation is the harnessing of ideas for the commercial benefit of a business. Such ideas range from small continuous improvements to larger cost-saving projects right through to the development of radical new approaches. Through these ideas, the primary aim of innovation is to drive future growth and profitability in a company. Innovation is as simple and as grounded as that. Innovation is in some ways a pseudonym for change or transformation. It is only through constant evolution that our businesses will survive and prosper. Therefore, it is critical for any business to put innovation at the core of its activities, in order to survive in the long term. However, this is easier said than done. In reality, we can all be so busy with the ‘here and now’ that we do not make time to consider new ideas or new ways of doing things. Consequently, innovation is often relegated to the ‘rainy day’ place, where we innovate only when there is nothing else to do. But innovation does not just happen in a business. It must be developed, nurtured and managed. A formal innovation management system simply brings a discipline to the process of creating ideas, picking the best of these and proceeding to develop the chosen ideas into marketable products or services, thereby improving your business. The main focus of innovation management should be to allow your organisation to respond to external or internal opportunities and subsequently to use its creative efforts to introduce new offerings to market. It is important that innovation is not left to the scientists in the R&D department alone. The engineers are a critical cog in the wheel and must be involved in the process. Innovation management must be supported enthusiastically from the very top of the organisation. Unless there is buy-in from key influencers, it is certain to fail. At the start, do not overly complicate matters too soon. In football or rugby parlance, get players on the pitch first; then make them better at what they do by giving them targeted training. Your team will be made up of players who do different things and therefore one size does not fit all when it comes to training. Take the time to identify what is relevant for your business first, but don’t underestimate the importance of training. To succeed in building an innovation culture in your business, you need to be able to sustain innovation management for a long time. Remember this is a marathon, not a sprint.

The key principles of an innovation management system in a business

In innovation management, one size does not fit all. However, there are a number of key principles that should be stated or be implicit in any system installed:

Operate a simple process: the idea does not need to be simple, only the way of managing it;
Be commercially focused: be aligned with the company vision and strategy;
Be applied in all you do: be seen to be practical;
Be led by firm market insights: be customer- or consumer-centric and market-led / -aware;
Make sure the process is open to everyone: both inside and outside the business;
Recognise and reward participants: recognition is critical; the best reward is to share any intellectual property (IP) arising from the initiative;
Everything you do must achieve the sustainability criteria laid down in the business’s strategy: the triple bottom line is a concept gathering traction in business;
Celebrate success but allow for failure: only about one per cent of what you do will make it to market;
Communicate successes enthusiastically: internally and externally;
Innovation is a team process: it happens best when people with different skillsets and perspectives interact together;
Make sure that all you do is relevant: if innovation is not relevant to what you are doing, you may simply be creating a Chindōgu-type invention (Chindōgu are sometimes described as "unuseless" – that is, they cannot be regarded as "useless" in an absolute sense, since they do actually solve a problem; however, in practical terms, they cannot positively be called "useful").

Sourcing ideas

Ideas are the lifeblood of innovation. Your employees are the first port of call for an ideas stream. Circulate an information brochure to all employees. Tell them you need their assistance for the innovation management system to work and set out in plain language how it works. The innovation model that my colleagues (scientists, engineers production staff and sales/marketing staff) and I have operated for the past six years is an open innovation process, initiated through ideas generated from employees, external sources and collaborations with third parties such as universities and government agencies. Ideas are captured, managed and prioritised in line with the company’s strategic objectives as well as meeting existing and future market needs. ‘Winning’ ideas are then managed through a stage and gate process, a risk management tool that critiques, evaluates and develops an idea from discovery to potential commercial development. Following completion of essential tasks and deliverables within each stage, the project is reviewed at strategically placed gates or review points. The gates are quality control mechanisms between stages that can open to allow a project to move forward into the next stage or conversely can close to kill the project, thereby allowing the leveraging of resources into potentially higher value projects.

Protecting your ideas

In my experience, IP protection, particularly patents, can act as a very useful deterrent to others who might copy your invention or parts thereof. However, very often a significant additional investment is required in order to defend or enforce the patent. Some companies (particularly start-ups), entrepreneurs and research institutions spend too much of their scarce resources on IP protection issues at an early stage. This is because of an over-focus on technical matters at the risk of losing sight of the commercial issues. This can be fatal for any good innovation or invention. It is worth noting that under the this country's tax regime, a number of tax incentives are available to companies and individuals involved in the development and exploitation of IP. In addition, tax credits are available to businesses that carry out R&D under a formal or informal innovative management solutions (IMS).

Key risks – and how to manage them

Whatever can go wrong, will go wrong – but do not panic, it can be fixed. These are the top six potential risks in setting up and running a formalised IMS:

Risk 1: Sufficient senior management support is not forthcoming;
Risk 2: Inability to take the plunge and invest in innovation;
Risk 3: Correct level of funding is not assigned to innovation;
Risk 4: Failure to align the IMS agenda to the market’s requirements;
Risk 5: The innovation approach taken is not ambitious enough;
Risk 6: Try to do too much too soon.

These risks should be formally assessed and scored on a monthly or quarterly basis in order to ensure that the innovation agenda is being correctly addressed and that it remains aligned to the overall business objective. There is no real mystical secret to establishing an innovation management system in your business. Engineers are a critical element of any innovation/new product development (NPD) or R&D processes in a businesses. So embrace the innovation agenda today - your business may depend on it. Hugh Henry is the director of innovation and R&D at Bord na Mona and author of Everyday Innovation: A Practical Guide to Establishing and Operating an Innovation Management System in Your Business, recently published by Oak Tree Press and available from www.SuccessStore.com