House of innovation: this is how CEOs make their company innovative

Lead Innovation's "house of innovation" makes visions of customized innovation management a reality. You can find out here what framework you need to establish as a decision-maker so that your organization becomes holistically innovative. 

Definition: Holistic innovation management

Holistic innovation management and innovation management are related concepts that focus on fostering innovation within an organization, but differ in their scope and approach.

Innovation management generally refers to the systematic processes and practices used to generate, develop, and implement innovative ideas within an organization. It includes activities such as idea generation, idea evaluation, project management, and the commercialization of innovations. It focuses primarily on the management of individual innovation projects or initiatives.

What is holistic innovation management?

Holistic innovation management has a broader and more comprehensive perspective. It views innovation as a strategic driver that permeates all aspects of an organization. It goes beyond the management of individual projects and extends to the culture, leadership, processes, and systems within and outside the organization. 

In a holistic approach, the goal is also to integrate innovation into the organizational structure. It aims to create a culture of innovation that involves all employees and functions. Holistic innovation management recognizes that innovation can come from multiple sources, and it encourages collaboration, the sharing of ideas, and cross-functional initiatives. It aims to break down silos and promote a holistic, organization-wide approach to innovation. Innovation is understood not just as a process, but as a mindset and a cultural attribute.

With a holistic approach, decision-makers ensure that innovation efforts are closely aligned with the company's strategic goals and priorities.

The recipe for success lies in holistic innovation management

Holistic innovation management is one of the most effective ways to take your business to the next level of innovative strength. This is about integrating innovation as a strategic element at the core of your organization. Instead of having "only" one department for innovation, you should make sure that all areas and members of the company are involved in developing innovative ideas. Holistic innovation management ensures the sustainable success of the organization.

Lead Innovation's "house of innovation" illustrates the different areas of such a management approach. Through its application, you as the decision-maker establish:

• the right strategic foundations.
• the necessary room for maneuver for the innovation team.
• the right framework conditions for the entire workforce.

The "house of innovation" is not a model that can be imposed on an organization. Rather, it helps to find a company-specific way to improve innovative strength. The key building blocks for successful innovations are shown in this simplified illustration.

The basis of the "house of innovation" is the culture of innovation, on which the structure, the innovation process, and the innovation methods are built. The model is rounded off by the innovation strategy, which forms the roof of the "house of innovation". But let's start from the top downwards. 

Innovation strategy – clarity for more innovative strength

An innovation strategy is an essential part of any successful business strategy. It is the framework within which companies define and implement measures to develop new products, services, and business processes.

The preliminary considerations for the implementation of holistic innovation management should therefore initially revolve around the corporate vision and strategy. Senior management clarifying these points relevant to strategy is essential. This provides decision-makers with clarity about the innovation strategy and the definition of focus topics, follow-up topics, desired innovation types, degrees of innovation, the desired timing, and stage goals. At Lead Innovation, we discuss these points in detail with the companies.

Tip: make it visible to the workforce what mix of innovation types are being pursued. To this end, record how many pioneering innovations, conventional innovations, and product optimizations the management expects in a fiscal year. By doing so you will be communicating expectations clearly. 

Innovation management is an important management approach that is becoming increasingly important in today's world. But to successfully implement this approach, you first need to get an overview. For example, it can help to use an innovation scorecard to identify the strengths and weaknesses of the existing system. 

Success story: strategic innovation management at KOB

For the company KOB GmbH, a manufacturer of medical textiles, for example, we used an actual situation (innovation scorecard) to ascertain the areas in which innovation capability can best be increased. This resulted in measures that enabled the production company to move one step closer to the "house of innovation". In this specific case, it turned out that implementing the radar method would improve innovation performance as a first step. Subsequently, several radars (on trends, technology, a regulatory radar, users, etc.) were designed, which today provide relevant info on trends and needs. A separate team is responsible for each radar and ensures that the collection of important future topics is condensed so that they form a picture for strategic innovation management. As a next step, it is planned that all managers will be trained in the future. 

Strategic preparation for deducing opportunity and search areas 

In order to be successful in the long term, it is essential for directors and executives to prepare strategically to deduce opportunity and search areas. Only those who take time to think about possible developments and trends can adapt to changes and operate successfully. It is important to make the right decisions and also to become active in new fields.  

What are areas of opportunity in innovation management?
With areas of opportunity, possible options and potential for innovations are presented in strategic management. Specific actions are derived from them in order to assert oneself on the market. Areas of opportunity must always be considered within a time frame. In volatile times in particular, new opportunities can arise or options can disappear quickly.  

What are search areas in innovation management?
Search areas are the result of a roadmap project and can be part of a higher-level area of opportunity. A search area is the best basis on which to start a specific innovation project. Most often, a search area consists of a guiding principle, which precisely describes the problem to be solved. In addition, criteria for the desired solution can be recorded (must-haves, nice-to-haves). 

Holistic innovation management offers numerous advantages that should not be underestimated. Strategy and external signals are constantly aligned to find the best possible solution. Through this permanent alignment, areas of opportunity can be defined, which are then specifically addressed. A strategy team in the organization ensures that ideas and innovations are actually implemented and do not fizzle out. Such strategic innovation management is therefore not only effective, but also sustainable and future-oriented. It ensures that the company always has its finger on the pulse and continues to develop.

Processes and procedures reduce risks

An innovation budget of 10 million euros may seem large, but producing something new is not just a question of financial resources. Especially challenging is to increase the workforce's willingness to take risks. Because at the end of the day, organizations are driven by revenue in most cases. On top of this, there are many – mostly invisible – factors. If decision-makers make the process and organizational structure in the company more innovation-friendly, innovative strength can increase dramatically.

A clear structuring of the process – whether that be according to the stage-gate model or with an agile approach – forms the framework for the development of product and service innovations or business models. The systematic approach increases the innovation ratio and thus increases the chances of success in the market.

However, there is no one-size-fits-all or standard innovation process that can look the same in every company. Instead, processes and workflows must fit the specific requirements of the organization.
 

Tip: always consider innovation methods as well. Innovation managers know how important it is to choose the right innovation method. Be it design thinking, the lead user method, or lean start-up, all have the goal of promoting innovation through a structured approach. Innovation methods are inseparable from a good innovation process. 

Success story: strategic innovation management at KOB

In addition to the process itself, the organizational structure is another important factor for strong innovation management. Only in this way can responsibilities be clearly defined and assigned. A comprehensible implementation of the organizational structure and process organization increases the acceptance for the process and thus also the innovation ratio.

After the analysis with the innovation scorecard, the management at KOB quickly recognized the leverage of a customized innovation process. Throughout the innovation process, the central goal was to adapt to the needs of the organization. To achieve this, specially defined roles in the innovation process were developed. At the front end of the innovation process, it was particularly important for the manufacturing company to specifically consider open innovation. A far-sighted step that also had an influence on the culture of innovation.

It's culture that makes you innovative

Innovation is not a project, but a management approach. Ultimately, it's about seizing opportunities that lead to success. Innovating could therefore be compared to marathon training. Continuous and systematic.

Fostering a culture of innovation can be a key competitive advantage for companies. After all, those who manage to motivate their workforce to contribute and implement ideas will not only be able to react more quickly to changes, but will also be successful on the market in the long term. That is why companies should invest specifically in developing the skills of their employees, give them scope for creativity, and establish a positive error culture. Only then can a successful culture of innovation emerge.

Working on a culture of innovation

Let's go back to the example of KOB. The management at KOB is also aware that holistic innovation management entails a change in culture.  In addition to the strategy team and the innovation team, it is important to get the rest of the workforce on board.

To ensure this, work must be done in the long term on three aspects for a holistic culture of innovation: 
 

• By defining a clear innovation strategy and establishing future-proof innovation processes, the senior management sent out a clear signal: everybody is allowed to be innovative. 
• The next step is to provide the necessary tools with innovation training for the workforce and systematic innovation coaching. This build-up of skills ensures that everybody is able to be innovative.  
• The intrinsic motivation of the workforce, combined with awareness raising and innovation communication, ensures that the willingness to innovate is promoted. The objective: everybody wants to be innovative.

Changing the culture of innovation doesn't happen overnight; it's about getting better year after year. As a decision-maker, you must be aware that the path to holistic innovation management can take several years. You will be able to reap the fruits of your hard work as early as in the first year, however.  

Keep in mind: a culture of innovation is not an isolated variable – it must always be considered in the context of the innovation strategy, the structural and process organization, and the methods.  

How to build a culture of innovation: three steps to positive change

A positive culture of innovation is the most powerful tool for the innovative strength of an organization. But how do you build such a culture? The main aim here is to shape general values, norms and attitudes in the company in such a way that they promote and support innovation. Here are three steps that can help with this:

1. Survey the culture of innovation with a scorecard. Only those who know where they are at can improve. Analysis tools such as a scorecard help determine which measures support change.
2. Develop a plan to successively improve the culture of innovation. A positive culture of innovation does not emerge overnight. Clear goals, measures, and processes are needed to establish them.
3. Ensure a positive culture of innovation. A successful culture of innovation must permeate all areas of the company.

To summarize, a positive culture of innovation is a long road, but one worth taking. With the right measures and a smart plan, any organization can be successful in the long term and continue to generate innovative ideas in the future.

What improves in organizations with holistic innovation management? 

When executives choose modern innovation management, numerous advantages open up. A systematic approach to innovation allows processes to be optimized, resources to be used more effectively, and innovative ideas to be realized more quickly. Here are some advantages:

• Trends and changes in the market environment are recognized more quickly, increasing the organization's ability to respond.
• A holistic approach that is clearly communicated positively influences workforce engagement.
• Holistic innovation management promotes a creative and collaborative approach to problem-solving.
• Innovation teams work more efficiently and effectively with a holistic approach.

House of innovation: a holistic approach for more innovation success

Nowadays, innovations are an important basis for success. To enable your employees to develop ideas and inventions, the "house of innovation" is the ideal solution. It is an efficient method to implement a clear innovation strategy and processes and to approach ideas and inventions in a structured way.

The "house of innovation" ensures that your workforce is in an innovative environment. With a holistic management approach, it can help you develop innovative products and services. This strengthens your employees' willingness to innovate and their creativity.

With the "house of innovation" you can take an approach based on the right factors to achieve success – from the development of innovative ideas to implementation, marketing, and customer support. It is important for employees to be able to react quickly to trends and to be adaptable. With a customized "house of innovation", you create a system and the necessary structures for this.

Don't solely rely on traditional methods of management – let the "house of innovation" work for you! With its help, you can use new technologies and create new services that will pave the way to success.

Questionnaire and steps for implementation

When introducing innovation management in a company, decision-makers should ask themselves the following critical questions:

• What are our strategic goals and how can innovation management support them? They need to identify specific areas where innovation can help achieve strategic goals, such as opening up new markets, improving customer satisfaction or increasing operational efficiency.
• Is our organizational culture conducive to innovation? Managers need to assess whether there is a spirit of openness, collaboration, risk-taking, and continuous learning. If the culture is not conducive to innovation, management need to consider whether they want to create such an environment and how to make it happen.
• Do we have the necessary resources and skills? Managers should review the organization's resources (including financial, human, and technological resources) to determine whether they are sufficient to support innovation initiatives.
• How will we encourage and communicate the importance of innovation management? The road to becoming a holistically innovative company can be a long one. If change is supported by the entire workforce, that road is easier to walk down. Clear communication is crucial for acceptance and support by employees at all levels.
• How can we foster a culture of collaboration and idea sharing? Based on how your organization is currently set up and what the prevailing corporate culture is, consider how collaboration and the exchange of ideas can be promoted in your organization.
• How will we measure and track innovation efforts and results? Key performance indicators (KPIs) make the results of innovation initiatives measurable. Think about what you would use to determine the progress of innovation projects.
• How will we deal with and accept risks in the innovation process? You need to assess the risk appetite of the workforce and develop processes to identify, evaluate, and mitigate the risks associated with innovation initiatives.

With these questions, you will shed light on both strategic and operational aspects in innovation management, and numerous sub-questions will also arise.

Conclusion: why holistic innovation management is the key to success

It is not enough to just have an innovation department and think that this will ensure innovation success. Companies that really want to innovate successfully must take a holistic view of innovation management. This means aligning everything – from the culture of innovation, to the innovation process, to strategy – towards innovation.

Companies that have opted for holistic innovation management react more quickly to changes in the market and produce innovative solutions on a continuous basis. They can also increase their competitiveness by entering new markets or dominating existing ones.

Lead Innovation's "house of innovation" provides an orientation plan to holistically innovate your own organization. This requires courage, perseverance, and assertiveness. But it's worth it. After all, only those who are holistically innovative will be successful in the long term and be able to hold their own against competitors.