A recent edition of McKinsey Quarterly had an article on “The Eight Essentials of Innovation.” Their premise was, “Strategic and organizational factors are what separate successful big-company innovators from the rest of the field.” Their article was based on research conducted in November 2012 of more than 2,500 executives in over 300 large companies across industries and countries. https://www.mckinsey.com/
First, I think the world has changed in significant ways, many impossible to have been foreseen, in the decade since the research was conducted. Second, I also found the research to be a bit myopic in its view of innovation. Based in no small part by the increased emphasis on innovation that the Baldrige Excellence Framework added a decade or more ago, I view innovation as the purview of any size organization in any industry or sector. “Innovation may be present in organizations of all sizes, sectors, and maturity levels; in some cases, an organization’s genesis is an innovative idea, process, technology, product, or change in organizational structure or business model.” We certainly see evidence of that in the many Baldrige Award recipients since 2012.[Baldrige Performance Excellence Program. 2021. 2021-2022 Baldrige Excellence Framework: Proven Leadership and Management Practices for High Performance. Gaithersburg, MD: U.S. Department of Commerce, National Institute of Standards and Technology. https://www.nist.
Eight Components Critical to Innovation
The report cited eight components critical to innovation:
1. Aspire – Do you regard innovation-led growth as critical, with cascaded targets to reflect this?
2. Choose – Do you invest in a coherent, time- and risk-balanced portfolio of initiatives with sufficient resources to win?
3. Discover – Do you have differentiated business, market, and technology insights?
4. Evolve – Do you create new business models that provide defensible and scalable profit sources?
5. Accelerate – Do you beat the competition by develop and launching innovations quickly and effectively?
6. Scale – Do you launch innovations at the right scale in the relevant markets and segments?
7. Extend – Do you win by creating and capitalizing on external networks?
8. Mobilize – Are your people motivated, rewarded, and organized to innovate repeatedly?
Elements Promoted by the Baldrige Excellence Framework
I found that the eight components espoused by McKinsey were not only myopic in their focus on large companies but in an underlying assumption that innovation results in increased market share, profitability, and competitive advantage. Baldrige offers other elements that I find equally compelling.
Intelligent risks, which “requires a tolerance for failure and an expectation that innovation is not achieved by initiating only successful endeavors. At the outset, organizations must invest in potential successes while realizing that some will lead to failure.”
Strategic opportunities, which “arise from outside-the-box thinking, brainstorming, capitalizing on serendipity, research and innovative processes, nonlinear extrapolation of current conditions, and other approaches to imagining a different future. The generation of ideas that lead to strategic opportunities benefits from an environment that encourages nondirected free thought.”
Innovation, which is “making meaningful change to improve…and to create new value for stakeholders.” The Baldrige Excellence Framework goes on to talk about cultural attributes that contribute to innovation: knowledge sharing, a decision to implement, implementation, evaluation, and learning.
Other Key Factors Regarding Innovation in the Baldrige Excellence Framework
Creating an environment for success, including innovation, is a specific requirement of senior leaders (Item 1.1), an output of an effective strategic planning process (Item 2.1), the outcome of performance analysis and review (Item 4.1), a component of an effective knowledge management system and embedded organizational learning (Item 4.2), and its requirement in the management of opportunities for innovation (Item 6.1).
In your role as a senior leader, how important do you think innovation is to the future success of your organization and to its sustainability? If you view it as important, where will you start to ensure that it takes a solid foothold in your organization and that it is embraced by everyone as not only your role but theirs?
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2022 Baldrige Fall Conference
October 19-20th, 2022
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