Sunday, November 14, 2010

Innovation = Creativity x Execution

This is a fantastic post on innovation from Vijay Govindarajan, co-author of the new book, The Other Side of Innovation: Solving the Execution Challenge. In it, he really drives home the point that the hard part of innovation is not the creativity, the coming up with innovative ideas; but the execution, the translating the ideas into action.

Maybe because of the way my brain works, I really like the mathematical model he uses to make his point:

We like to think of an organization's capacity for innovation as creativity multiplied by execution. We use "multiplication" rather than "sum" because, if either creativity or execution has a score of zero, then the capacity for innovation is zero.

It's excellent. And he goes on to illustrate the "multipler effect" successful execution can have on innovation efforts:

Here's why we worked on execution, as opposed to creativity: We surveyed thousands of executives in Fortune 500 companies to rate their companies' innovation skills on a scale of one to 10, one being poor and 10 world class. Survey participants overwhelmingly believe that their companies are better at generating ideas (average score of six) than they are at commercializing them (average score of one).

So which is more effective--moving your (already good) creativity score from six to eight or lifting your (very poor) execution score from one to three? Here's the math using our shorthand, creativity times execution:

Capacity to innovate = 6 x 1 = 6

Capacity to innovate, increasing creativity score = 8 x 1 = 8

Capacity to innovate, increasing execution score = 6 x 3 = 18

It's no contest. Companies tend to focus far more attention on improving the front end of the innovation process, the creativity. But the real leverage is in the back end.

Simple and effective in underscoring the importance of execution in any innovation effort. It's also something I've realized as part of my work with the Innovation Task Force of the Wisconsin Society of Association Executives. We've recently framed that discussion around three levels of "innovation readiness," which can succinctly be summarized as "build the right culture," "design the right process," and "apply the right resources." In this construction, the creativity piece, the generation of innovative ideas, takes a back seat to a culture that embraces those ideas, a process that solicits and prioritizes them, and the resources that translate them into action.

There's more work ahead for the Task Force as we begin to flesh out the details of these three levels, looking to work with organizations that have developed successful strategies for each objective. I wonder if Govindarajan's book would be worth a read. Has anyone read it? Any ideas to suggest from it?


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