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Dr. Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Chief Consulting Editor's Desk
Rajita Chaudhuri
Dr. Arindam Chaudhuri, Editor-in-Chief, 4Ps B&M Editor-in-Chief
Dr. Arindam Chaudhuri
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IMD
Five Lessons to Boost Your Innovation Practices
Despite The Innovation Efforts of Companies, The Fact is that Achieving Widespread Participation in Innovation Remains an Elusive Goal
Issue Date - 16/06/2011
 
Another factor to consider is the operational cost associated with building an open innovation capability. The successes of companies like LEGO or Procter and Gamble are the results of sustained investment in external networks – and the returns were slow to materialize.

Tapping into an external community makes sense when trying to solve a narrow technological problem. But external respondents would have a lot more difficulty tackling embedded problems that are company or situation-specific.

Lesson 5: Top-down innovation still matters
The dominant message in much writing on innovation is that bottom-up innovation is best. The reasoning is that top executives are too removed from reality to understand customers’ needs or to come up with ideas that truly resonate with them. It is a compelling message, but one which found little support in our investigations. The bottom-up initiatives we came across – like UBS’ Idea Exchange and GSK’s Spark program – did not really live up to expectations.

Rather, the most successful approaches actually combined bottom-up with top-down. Innovation depends on the interplay between direction and empowerment, even in a company like Best Buy which prides itself on bottom-up innovation. The US retailer has benefited greatly from encouraging store-level experimentation. But what is often overlooked is the key role of top management in providing a strong customer service focus for innovation, minimizing the risks of irrelevant innovation.

Besides framing the innovation challenge, top management also plays a vital role at the other end of the process, in deciding what needs to be discontinued. Companies can’t “do it all.”

It is only by saying no that companies can concentrate on the ideas that are really important. Of course, this raises the tricky issue of maintaining the energy of those whose ideas are turned down. How their contributions are acknowledged will be crucial factors in keeping the ideas coming.

No Easy Formula Innovation can be top-down or bottom up, face-to-face or online, internally-focused or externally-focused. All of those approaches have their strengths but also their limitations. Innovation is about finding the right mix of approaches – which means that companies must first be clear on the innovation challenge they face.

Coordinated By : Deepak Ranjan Patra

 

          
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