Innovation, yes! But How?

I’ve been doing a lot of reading lately. Business books I pick up in the airport, all the mainstream magazines (Fast Company, Fortune, Industry Week, etc.), trade publications – and yes, even blogs. And there’s one theme I’ve been reading about with increasing frequency – innovation.

Then there’s the enormous number of companies that have something in their taglines that point to innovation, either directly or indirectly (look at GE, Motorola, Siemens and so many others).

So here’s what’s troubling me: no one talks about “how” to innovate. Sure, they talk about how important it is. They talk about how it is driving their business strategy. They talk about changing business dynamics, providing more value, beating the competition and so on. But no one is talking about HOW to innovate.

The overwhelming majority of innovation consultants are tilted toward helping companies with the softer side of culture building. But it’s the harder side that challenges companies, perhaps more so. It’s the real product and service barriers – the “technical barriers” – that stand so prominently in the way of true market-changing breakthrough.

Creativity + structure = innovation success
Gone are the days of neon colored walls and pinball machines in the cafeteria, all designed to foster a more “creative” environment. Seems to me that these programs just created new ways to spend investors’ money. Today we need reliable, predictable and replicable approaches to innovation – not loosy goosy ones.

This demands a new approach—or at least an approach that’s new to most of us. To be reliable, predictable and scaleable (another word for replicable), we need to follow the same rules we follow for everything else expected to exhibit success. Basically we need a process and a methodology for innovation.

In a recent edition of Business Week Online, GE CEO Jeffrey Immelt said “I look at Six Sigma as a foundation on which you can build more innovation.” Right on, I say. We need more structure to innovation, without sacrificing the necessary soft side – just like Six Sigma brought structure to quality improvement in the same way.

Immelt would agree that Six Sigma works best when it’s deployed through a structure and under conditions that build improvement culture along with improvement skills.  It appears he’s also saying that Six Sigma is a great stepping stone or springboard for Structured Innovation.

Innovation is for all to learn and do
I recently completed a book entitled Insourcing Innovation. I wrote it with some colleagues because the achievement of continuous innovation is dependent upon certain “critical Xs,” as we say in the Six Sigma world. It’s not enough to state the goal (innovation). You have to define the chain of causation that enables you to achieve your goal.

So what is the critical X that can make innovation happen at your company? Why do so many say they value innovation yet don’t have systems in place to drive, manage, achieve and control innovation?

Insourcing Innovation answers these questions and lays out a roadmap for making innovation commonplace in organizations. The book’s title points to the basic problem and the basic solution today: companies need to develop their own innovative capability and systems (insource innovation), rather than do what too many do now (outsource innovation).

Outsourcing innovation takes on many forms. One form is hiring a consulting firm like McKinsey to “think out of the box” for you and write a new business strategy. Or you could outsource the full spectrum of new product design and implementation to firms that operate much the same way Accenture operates in the IT arena: full service at full prices. Or you could hire an individual consultant to come up with a creative solution to a specific problem you’re facing.

Six Sigma teaches a lesson
But if all the voices of modern business, from GE’s Jeff Immelt to P&G’s A.G. Lafley, are right, the ability to innovate can’t remain just an area of expertise, like accounting or engineering or IT. It has to become a core competency for every individual and every company, and it has to span the entirety of the value chain, not just one department.

There’s simply no way to get there without structure, which again takes us back to a need for a process or methodology.

Here’s the good news: we already have an effective model to follow. It’s called Six Sigma. While the principles of process improvement have been around for more than 50 years, not until about the last 20 have they touched everyone. Six Sigma is not relegated to one department and, in successful companies, world-class quality practices are a core component of the way they do business.

Initially considered a process improvement methodology for the manufacturing sector, today Six Sigma is applied across all industries, from healthcare to financial services to the travel sector. And in many companies, Six Sigma is deemed as the best path to operational excellence, and a prerequisite for promotion into senior management.

That’s where we need to take the current call for innovation.