Innovation pilots can be scaringly easy - yet scaling to production is almost always incredibly tough. This journey of Pilot to Production - going from experiments, incubation and POCs to scaling innovation in the enterprise - requires significant attention across the tech and business teams. Here is a framework for harnessing the innovation pipeline, defining the operating model and governance for innovation, and creating a culture of innovation.
Harnessing the Innovation Ideation Pipeline
The journey of innovation begins with idea generation. Organizations must develop effective processes for capturing and prioritizing these ideas, striking a balance between centralized and decentralized approaches. Once ideas are identified, careful evaluation is crucial to separate the hype from the potential. The key is to focus on the real-world impact of innovative solutions and their ability to scale.
Leveraging Diverse Sources of Inspiration
"Innovation often arises from addressing customer pain points." The innovation that led to delivery photos being emailed to customers customers in ecommerce came from a simple pain point – reducing the cost of returns from delivery damages. The pain points lead innovation teams to explore the source of the issue and come up with ideas to solve them. Other sources of innovation include looking at what competitors and other industry leaders are doing.
Innovation can come from various sources, including process improvements, changes in organizational structure, and cultural shifts. "Look at other industries for source of inspiration." By studying how innovations in other sectors have been applied successfully, organizations can gain valuable insights.
While hackathons can be a valuable tool for generating ideas, it's important to have a process for evaluating and prioritizing them.
Ideas from the ecosystem
"Keep an eye on the startup world to get sources of ideas." Startups often bring fresh perspectives and innovative solutions. "In that world of tomorrow, you have to pick the things that you believe will be the disruptors." By staying informed about emerging trends and technologies, organizations can identify potential disruptors and seize opportunities early, and collaborating with startups can bring in fresh ideas and perspectives. For example, in the world of intelligent automation, 2021 was the year of document processing and data robots (.e.g Instabase, Hyperscience); 2022 saw the emergence of verticalized models such as Jasper and the first transformer models; 2023 initiated the first wave of Generative AI startups – Open AI, Anthropic, Langchain, and vector databases. 2024 is seeing the emergence first challengers to Google – Perplexity, platform companies like Writer. In 2025 we can start thinking of agents as just apps. “We will see a focus on the field of agentic AI.”
Evaluating and prioritizing Ideas
Evaluating and prioritizing ideas is a crucial step in the innovation process. By carefully assessing the potential of each idea, organizations can allocate resources effectively and focus on the most promising initiatives. This involves considering factors such as the idea's alignment with strategic goals, its feasibility, potential impact, and the resources required to bring it to fruition. An “AI activation council” can help identify and prioritize most promising ideas. The "Pitch it or Ditch it" framework can also provide a structured approach used to evaluate and prioritize innovation ideas.
By setting ambitious goals, organizations can encourage employees to think creatively and come up with innovative solutions. "Stage gating", a structured process for evaluating ideas, can help organizations prioritize the most promising ones.
Defining the Operating Model and Governance for Innovation
One of the key challenges in scaling innovations is establishing the right organizational structure and governance framework to support innovation. This involves determining the most effective approach for managing innovation teams, ensuring a smooth transition from incubation to scale, and avoiding the pitfalls of innovation silos. Additionally, organizations must develop robust strategies for managing risks associated with AI deployment and ensuring the long-term sustainability of innovative projects. Finally, measuring and monitoring the progress and impact of innovation initiatives is essential for continuous improvement. This requires establishing clear goals, KPIs, and feedback loops, as well as implementing effective governance mechanisms to prevent the proliferation of unsuccessful projects.
Building a Scalable Infrastructure for Innovation
"When you grow too large innovation becomes harder." As organizations grow, it can be challenging to maintain a culture of innovation, so defining the right operating model is critical. For many organizations, "innovation teams is a flawed approach." Instead of relying solely on dedicated innovation teams, organizations should integrate innovation into their core operations. By establishing clear processes, roles, and responsibilities, organizations can ensure that innovation initiatives are aligned with their strategic goals and allocate resources efficiently.
Sometimes, spinning out innovative ideas into separate entities can allow them to thrive independently. Prioritizing Minimum Viable Products (MVP) instead of Proofs of Concept (POC) allows for end-to-end thinking and how the innovation will be applied upstream and downstream in the enterprise.
The choice between a centralized and federated model for innovation can significantly impact an organization's ability to generate and implement new ideas. A centralized model will provide stronger coordination, shared resources and scalability, whereas a federated model will provide faster decision-making, increased ownership and create a more sustainable innovation culture. A governance mechanism that combines IT and process teams into “self-aggregating functional teams” has proven to be effective.
Establishing clear goals and metrics
A robust governance framework also helps to mitigate risks and ensure that innovation efforts are ethical and responsible. By setting clear goals and metrics, organizations can ensure that their innovation efforts are aligned with their strategic objectives, prioritize the most promising ideas, and track progress towards success; these metrics provide a tangible way to demonstrate the value of innovation to stakeholders and support decision-making.
Enterprises should "Focus on the impact" - define what they want to achieve with innovation and how they will measure success. Identifying the key metrics will help them assess the effectiveness of innovation initiatives. Establishing a “risk framework of governance” allows organizations to evaluate and manage risks associated with innovation, and can help mitigate potential challenges and ensure that innovation initiatives are ethical and responsible.
Selecting and Allocating Capital to Projects
"Sponsorship is key." Having the support an encouragement from business leadership to foster innovation and orient investments is critical. An “innovation council made up of representatives of all business units" can ensure that innovation investments are aligned with the company's overall strategy.
One of the ways to think about capital allocation in the current economic cycle is to compress the spend on “keep lights on” activities to create the budget invested back in innovation."
Building a Culture of Innovation
One of the key challenges in scaling innovation is overcoming cultural barriers and implementing effective change management strategies. This involves shifting mindsets, fostering collaboration, and creating an environment where experimentation and risk-taking are encouraged. Additionally, organizations must develop a well-defined innovation strategy that balances the need for exploration with the pursuit of scalable, high-impact projects – and ensure they have the right talent in place.
Aligning innovation with Business Objectives
"Innovation is at the intersection of corporate strategy, creative thinking, and emerging technology." To foster innovation, organizations must align their strategic goals with a culture that encourages imagination, creativity and experimentation.
Ultimately, it’s the leadership that plays the key role in driving innovation and disruption – both in their willingness to encourage leading-edge innovation and their ability to drive fundamental change at the core. "Innovation is a culture problem and it starts with leadership." It takes business leaders that have technology in their DNA to really push companies to innovate.
Empowering Employees and Fostering Ownership
"Innovation is for everyone." By empowering employees at all levels, organizations can tap into a wider pool of creativity and innovation. This also demonstrates the importance of a culture that embraces change and experimentation.
"The field is more ready than most organizations." While there may be challenges, organizations can overcome them by adopting a more open and agile approach. By defining a culture of “agency and self-determination”, organizations can empower employees to take ownership of innovation. But they need to start teaching people – learning and development is a key component of any change management program.
The sense of purpose is critical. Employees are more likely to be innovative when they feel a sense of purpose and are aligned with the organization's goals.
Overcoming Challenges and Resistance to Change
This often involves addressing cultural barriers, fostering a growth mindset, and providing adequate support to employees during the transition. By creating a culture that values experimentation and learning from failures, organizations can encourage employees to embrace new ideas and approaches.
Hybrid and remote work do not seem to be a significant limiting factor to innovation – as innovation can happen anywhere. But there is value in creating spaces for serendipity and cross-functional innovation.
The “Talent-Opportunity-Passion” model is a good framework for aligning employees at the intersection of where they can best leverage their skills, engage in work that gives them opportunity to grow and at the same time follow their passion.
Another strong framework for professional growth in driving innovation is the “3H model – Head, Heart and Hand” – which encourages employees to engage their head – intellectual understanding, knowledge and critical thinking, heart – empathy, values and passion, and hand – action, implementation and execution. Encouraging employees to embrace all three aspects actually helps with leadership development, decision-making and communication through times of change.
Scaling innovation requires a comprehensive approach that encompasses idea generation, operational excellence, and cultural transformation. In the words of Peter Drucker, “Innovation is not about finding a new way of doing the same thing. It's about finding a new way to achieve a new result."
Executive Technology Board (c) | North America & Europe