This week I participated in a small group discussion with business and IT leaders who are focused on innovation. It was an interesting discussion that touched on these topics:

  • The scope of innovation. Yes, innovation is on everyone’s minds, in business publications and is the hot topic du jour. However, what exactly is innovation? What is the scope of innovation? Is it at the product or customer experience level, the business model level, the business process level, or at the departmental level? When talking about innovation, it’s critical to identify what level within the organization or the addressable market you are focused on and the scope of your desired innovation. That helps determine the sponsors and participants, the skill sets required, the change management approach, the timeline, and many other critical components of the engagement.
  • Sustainability. One of the biggest problems in innovation is sustainability — maintaining momentum over time. Often a senior executive comes in, shakes things up, gets people to buy into innovation, and then moves on in a couple of years. If leaders up and down the organization haven’t fully embraced the innovation efforts as their own, the effort gets orphaned and dies when the executive champion and thought leader leaves.
  • The industry sector. Most participants in the discussion felt that innovation almost always happens at the industry level — that industry expertise trumps technology expertise when coming up with strategic, game-changing ideas. They also thought that cross-training innovation leaders in IT if they are industry experts (and vice versa) is crucial. This means that CIOs may face a high hurdle when trying to get the business technology organization plugged into innovation initiatives.
  • Professional services. It’s possible to use outside organizations to help identify and execute innovation, but the results are mixed. The feeling among this group was that outside service organizations with the best track record in innovation are companies like McKinsey, Accenture, and Capgemini, although one believes that McKinsey is losing its edge. Business process outsourcing (BPO) companies are now striving to move into innovation, but their heritage of cutting costs and focusing on efficiency makes it a high hurdle — although one participant gave Cognizant high marks for innovation. Overall, when bringing in an external organization, make sure it has a broad and deep number of innovation consultants so that you actually get the people on the project that you are counting on. This is one of the problems the BPO firms have.
  • Business development partners. One way to bring in innovation from the outside is to look to the external consultant’s business development partners that manage the overall relationship with your firm. In the top firms, these business development partners often bring innovative ideas to you, free of charge, as a way to expand their relationship with your firm. Use this to your advantage.

I’ve heard some of these points before, particularly how important it is to scope innovation at the strategic level and sustain innovation so that the departure of the key champion doesn’t bring everything to a halt. These days — in the age of the customer — innovation has to rise above efficiency and cost savings. Those aren’t enough on their own. Efficiency isn’t seen by most execs as innovation, and doesn’t hit the bull’s-eye for discovering new business models and driving unparalleled customer experiences.
But what do you think? Which points do you agree or disagree with, and why? We’d like to hear them.

This blog originally appeared at Forrester Research.

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