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Filed under: Innovation , Leadership & Strategy , Leadership & Strategy

A Step-By-Step Guide for Business Innovation

May 31 2011 by David J. Neff and Randal C. Moss
Innovation, true institutional innovation, makes indelible, positive impacts on a businesss corporate
culture and ability to drive revenue. When implemented, successful innovation programs can attract top
talent, improve staff retention, drive new lines of business, and create an agile organization able to adapt
to changing environments.
A culture of innovation requires executive leadership to engage the entirety of their staff to take
ownership of innovation development, and incorporate it into their daily job functions. Every employee has
a unique view of the organization, and can identify opportunities to better serve their constituents.
Identifying these gaps should be an organizational priority, because each gap is an opportunity to
innovate a new program or fill a need.
These days, it is insufficient to rely on a suggestion box in the break room to drive innovation. You need
to present your employees with the resources and support necessary to effect a change on the problem

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they have identified.

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Step 1: Create Opportunities for Awareness and Innovation

When the American Cancer Society initiated its Futuring and Innovation Center in 2002, they were
inundated with ideas on how to solve constituent challenges. The Center drove a cultural change within
the greater organization by developing a structure through which even the most junior staff were able to

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submit ideas and participate in their development. Beyond the value of the new programs, and beyond
the new revenue from them, The Center fostered a culture of individual responsibility and gave every staff
person the tools and opportunity to make lasting and meaningful changes to the way that the
organization operated. The lesson? Encourage your employees to extend themselves outside of the
prescribed job descriptions.
Additionally, Royal Dutch Shell PLC was a pioneer in organization awareness, able to engage their entire
company top to bottom level. Shell developed and implemented an innovation identification and
development program called Game Changer, which actively sought outside ideas for energy production,
distribution, and even new sources that could drive profitability and overall growth of the company. Shell
calls out to its entire network asking If you have a creative mind and you believe your invention can
transform the energy industry, perhaps you should be speaking to us. We invest in novel, early stage
ideas that could impact the Energy System to help you get them from your mind to proof of concept.
But awareness need not solely be an external effort. Air Products and Chemicals considered awareness
as an internal challenge. Air Products employs a vast array of engineers with diverse background and
interests. However, this vast resource was not being tapped, simply because the interests and skills
sets of each engineer were hidden. Air Products recognized the challenge and created an internal
system to catalog all of their engineers technical expertise and passions. Now, project managers
leverage the system to create high relevance ad-hock technical teams that align people with their
technical skills and passions. The result is better products and engaged employees.

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A Step-By-Step Guide for Business Innovation | ChiefExecutive.net | Chief Executive Magazine

Step 2: Take A Systematic Approach

In the Innovation and Commercialization 2010 McKinsey Global Survey, one of the biggest challenges
expressed by participants was the need for better organization of innovation. In fact, 42 percent of survey
respondents said that improvement in innovation organization would make a profound positive impact on
their ability to drive innovation.
Interestingly enough, organization was closely followed by developing a culture and climate that fosters
innovation as the second biggest challenge. The report is telling when it says, Organizational factors,
including innovation-specific processes and links to support functions, remain a challenge. As hard as it
is for companies to implement organizational changes in increasingly complex environments, the results
suggest that when companies make the effort, they will experience more success with innovation.
The lack of a highly functioning innovation system is one of the preeminent barriers to developing a
culture of innovation. An innovation structure provides individuals with great ideas the resources and
corporate support to usurp the standard business development process.
The Shell Game Changer is a strong example of how a large organization can act nimbly by creating a
separate pathway for ideas to route. Game Changer relies on a stage-gate process to bring in, evaluate,
validate, test, and launch new innovations. The American Cancer Society leveraged the success of the
Shell system and adopted a similar framework for their innovation development program called
Springboard. Both programs took a regimented and systematic approach to innovation development,
passing hundreds and thousands of ideas through screens until they were left with only the most viable
innovations. At which point, those ideas received not only funding, but developmental support.

Step 3: Turn Ideas into Business Reality

Here is an easy guide for transforming all those wonderful innovations from words on an email, to
actionable programs or products:
1. Discovery. Gather business concepts from your staff and volunteer network. Create challenges for
them by posing particular questions and asking for solutions, and have an open channel for people
to send in their unique ideas for consideration.
2. Scoping. Give concepts an initial review against your carefully selected criteria. Some key criteria
are: Scalability, Sustainability, Cost Basis, Tie to Organizational Mission, and Capacity for
Execution. This is where your process begins to pay off. By weeding out unsustainable ideas early
on you preserve development energy and funding for viable ideas.
3. Create a Business Case. Once approved, engage the person who submitted the idea to draft a
business plan of their concept. The business plans should thoroughly outline the mission, goals,
evaluation tools/metrics, and resources to test the viability of the idea as a prototype. A review
committee should consider a completed business plan as a formal application for funding.
4. Conduct Constituent Market Research. Engage the idea submitter to commission a market

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research study to determine what demand exists for their concept. Ideally, you already know the
problem it is going to solve, and the value it will bring your customers or constituents. Now you need
to see if there is a market for it. Your research can be as complex as engaging a firm, or as simple
as creating an online survey.
5. Development and Testing. Create a rapid prototype to prove the concept works. We suggest that
you aim to prove the concept within a nine- to twelve-month time frame. We strongly encourage
limiting funding to encourage bootstrapping, and keep the effort focused on proving the viability of the
concept, not creating a full-fledged program.
6. Launch. If chosen for implementation, work closely with the idea submitter to identify the resources
and department support best suited to deliver the program to market, and arrange the smooth
transition and success of the new program.
From the outside, brilliant business innovation may seem like art. But its more science than you think.
We work in nonprofits, where innovation is the name of the game: Now, you know our strategy for
success.

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A Step-By-Step Guide for Business Innovation | ChiefExecutive.net | Chief Executive Magazine

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David J. Neff and Randal C. Moss

David J. Neff and Randal C. Moss are the authors of The Future of
Nonprofits: Thrive and Innovate in the Digital Age
(www.thefutureofnonprofits.com)
View more articles by David J. Neff and Randal C. Moss

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