Innovation. You need two funnels.

Here’s another follow-up post to our recent jam session on using a down economy as an enabler for sustained improvements in IT.   

One of our calls took on the topic of protecting and promoting innovation — a big, squishy topic to which a blog post alone can’t do justice.  So let me touch on the highlights.

77% percent of our jam session attendees are actively cutting capital spending or planning to do so in the very near future. Not surprising. And 50% said that of the remaining budgets a smaller ratio will be allocated to new, innovative investments. Also not surprising.

Within our clients we see plenty of knee jerk cuts of anything with a “new” or “long-term” label attached. I say “knee jerk” because quick use of the scalpel is a just another of those involuntary responses that we’ve grown accustomed to in IT. But this isn’t necessarily a bad thing; in some cases, that long-term wish list is exactly what should be cut.

But there is a potential problem, and it starts with the ambiguity of the word “innovation.”  Many firms confuse that term with invention, believing that only strategic, long-term, and/or earth-shattering ideas should be considered in its domain. In this economic climate that mindset will actually result in less innovation.

It’s impossible to draw a line between real innovation and plain ole investments. When firms try this, they end up missing opportunities in the gray area between the two — opportunities that often present the most bang for the buck.

We suggest that you 1) treat innovation as a big tent that houses a spectrum of investments, but 2) set up two parallel funnels.

Your higher-risk, big-hit inventions and your lower-risk, incremental improvements need to be treated as part of one enterprise portfolio.  Why? Because they affect the same sets of resources; and running both flavors of work through the same process can inject more discipline into both types of initiatives. But while the pipeline process will look the same and involve many of the same decision-makers, each funnel will likely have different criteria, funding pools, and communications methods. Click on the report links above for more details.

Here are some other traps to avoid when it comes to protecting and promoting innovation:

If you don’t have a program (i.e., funding, a steering body, and success metrics) innovation won’t happen, whether it’s the invention kind or the tuning and tinkering kind. The CIO or a centralized group like enterprise architecture is often best positioned to facilitate an innovation program.

By innovation program, we don’t mean cordoning off innovation to the charter of R&D teams. The job of that central person or group is to facilitate the process, not source the innovation on their own.  Ask yourself, are you seeking innovation from all corners, including customers and suppliers? Bottoms-up innovation can often be fed by social computing/Web 2.0 tools (i.e., listening mechanisms.)  These same tools can also enable wisdom-of-the-crowd rankings of ideas to get various stakeholders involved.

Finally, one objective of the innovation funnel process must be to constrain the number and scope of what’s being considered. It goes back to my earlier post about Lean – we must find ways to kill bad ideas sooner.

Sidebar.  If one of your funnels is going to focus on eating into the M.O.O.S.E. (maintaining and operating the organization, systems, and equipment), here’s an oldie but goodie that will point you to some low hanging fruit.

Are you protecting and promoting innovation in your company or organization? If so, what tactics are you using? If not, what impediments are you experiencing?

By Tom Pohlmann