THEME: Spring 2010 From Vision to Action Roundtable Report
FOCUS: Translating Innovation into Reality - part #2
Monday morning: May 10, 2010
In an effort to translate innovation into reality, we need to remember that there are three levels happening within a company on a day to day basis. The first is the cash generating part of the business which is reliable and lucrative. The second is the R&D level which is inspirational and critical to long term strategic success. The third level is the most difficult because it competes for resources from the other two.
First, we need to understand that it is normal for new innovations to compete for company resources with the cash generating part of the business during any fiscal cycle. Company resources, e.g. time, talent and management attention, etc., along with the company’s budget, reporting and management processes are all focused on the current fiscal year. Even compensation and incentives systems are focused on accountability to the current fiscal year’s goals which are mostly attuned to the cash generating part of the business. Furthermore, if people look ahead during the current fiscal year, they look to R&D and their long range strategic options. By reviewing research, data and trends, they hope to create a better way for future profitability.
Nevertheless, if an idea moves out of R&D and toward the cash generating part of the business, it often ends up in the the Bermuda Triangle of projects that are strategic but not yet fully implementable. In this unique no man’s land, we need to understand that these “new projects” often struggle because they can not deliver like cash generating parts of the business. Furthermore, these new projects take resources, i.e. time, money and people, from cash generating improvements without generating ROI as regular products and services. The upshot on these “new projects,” given they are not fully operational is that they become “demo bait” for selling more of the cash generating projects and services.
With this in mind, first we need to generate a realistic timeline which includes exceptions to standard operating practices if we want these new projects to be successful and not die in the Bermuda Triangle. Second, we need to deploy an experienced, make-it-happen leader to new projects rather than to high revenue projects. This way they are positioned for sustainable growth. Third, we need to insulate these new projects from cash generating performance expectations. This may include the development of customized metrics and performance targets rather than use the current cash generating metrics and targets. Finally, we need all involved to understand that for innovation to become a reality “new projects” are not really projects but the development of a new business model. For more information on this subject, I encourage you to read the following article: “To Succeed in the Long Term, Focus on the Middle Term” by Geoffrey A. Moore, July-August 2007 issue of the Harvard Business Review.
This week, help your team understand the normal challenges of new projects and how to overcome them. As William Gibson reminds us, “The future is here. It’s just not widely distributed yet.”
Have a wonderful week,
Geery Howe, M.A.Consultant, Executive Coach, Trainer inLeadership, Strategic Planning and Organizational ChangeMorning Star Associates319 - 643 - 2257