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Ask the Expert: Tucker says innovation requires a systematic approach.

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By: Robert B. Tucker

Ask the Expert: Tucker says innovation requires a systematic approach.

Question: How Do You Manage Innovation?

Tucker: If you’ve participated in one of my workshops, heard me speak, or read “Driving Growth Through Innovation,” you’ve heard me quote Simon Spencer, BorgWarner’s first innovation champion. When we studied BorgWarner’s innovation initiative, Spencer told me something that I’ve never forgotten. He said: “The old BorgWarner would have said you can’t organize the innovation process. But the new BorgWarner says, ‘We’ve got a process for everything else, why not innovation?’”

Spencer’s insight crystallized the need for action at BorgWarner, a global producer of drive trains and other components for the auto industry. Today a growing number of firms are asking Simon Spencer’s question – Why not innovation? As a result, they are reinventing how they manage innovation because they want to drive organic growth.

GE and Procter & Gamble are obvious examples. But also retailers like Radio Shack, Best Buy, and direct-selling powerhouses like Belcorp, based in Lima, Peru, with whom we had the privilege of working with recently, and many others.

These firms and a growing list of others realize you can’t cost cut your way to growth. And as powerful as Six Sigma, lean manufacturing and other efforts may be in cutting waste, they don’t build new wealth platforms for the future. After a while you run short of low-lying fruit of cost-savings programs to deliver on the CEO’s directive. At American Express, another recent client, their Global Reengineering and Six Sigma unit has been responsible for helping AmEx’s business units save over five billion dollars since its inception. Yet even stellar units like American Express are widening their scope to include projects that build top-line revenue for the future.

What we are witnessing is the systemization of innovation. That’s the theme of an excellent new book called “Insourcing Innovation: How to Transform Business as Usual Into Business as Exceptional,” by David Silverstein, Neil DeCarlo and Michael Slocum. At some point, having systematized quality, you begin to say, Why does innovation have to be so fuzzy? And you realize “there’s got to be a better way” to do innovation.

This has happened throughout history. Seventy-five years ago Peter Drucker said there is a better way to do this thing called management.

Drucker taught us to look at management as a process. Ditto with marketing, accounting, and a thousand other subjects. But now it is time to rethink innovation.

If I’ve heard anything from attending countless conferences and talking with our clients this quarter, it is growing impatience with current innovation effectiveness. Our informal surveys of top managers in the several dozen Fortune 500 firms we’ve worked with in just the past three years reveals an average score of “present climate for innovation” of 4.4. When asked where they need to be, they collectively respond: 8.5 on a 10-point scale. Clearly there’s work to be done.

Take-charge managers are going ahead and doing it. They are designing and implementing a process for innovation that keeps future growth on the front burner, no matter how busy everyone is executing on today’s deliverables. They are learning from the mistakes of failed initiatives, and adopting the best practices of “innovation vanguard companies” in order to foster cultures where employees contribute ideas that get taken seriously. They are instilling an environment where risk-taking is encouraged, and people are provided with tools and training to help them know how to innovate. Not to get on the bandwagon is to miss one of the fundamental transformations of 21 st century business.

As BusinessWeek magazine put it in a cover story last year on the innovation movement (“Get Creative: How to Build Innovative Companies”), “Increasingly the new core competence is creativity – the right brain stuff that smart companies are now harnessing to generate top-line growth. The game is changing. It isn’t just about math and science anymore. It’s about creativity, imagination, and above all, innovation.” Who are we to disagree?

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