Innovation can be managed

It is important to dispel the myth that innovation is something magic and therefore can not be managed. However, to be able to manage innovation, a systemic approach is required. It has to include the process, culture and underlying systems and structures within the organisation.

The Australian Business Excellence Framework is a proven framework that outlines "best practise" within the field of contemporary management. It is based on 10 Principles which represent the core of sustainable business excellence:

• Effective leaders provide direction and create a supportive environment
• Effective organisations are plan driven rather than event driven
• Organisations benefit from decisions and actions based on facts and data
• All systems and processes exhibit variability, which impacts on predictability and costs
• All people work in a system; improvement happens when people also work on the system
• The most important resource of any organisation is people – especially their creativity and knowledge
• Continual improvement relies on continuous learning
• Quality is determined by the customer
• In order to improve the output, improve the process
• Impact on the community and the environment are key influencers of future sustainability

The ABEF challenges an organisation to think and question the assumptions they are using to run the organisation. It provides guidance as to what the organisation should consider, but it is not prescriptive about how these things should be done.

The ABEF consists of seven interlinked categories as shown below:

Leadership and Innovation

The leaders of the organisation have to determine the strategic direction of the organisation and what role innovation is going to play. It requires the leaders to understand what types of innovation are desired, how they link with the strategic plans and how to create a supporting culture which enables the intention to be carried out. Leaders have to be able to communicate what areas require new ideas to ensure the creative energy is focused on areas that matter to the organisation. It is further vital that organisational values enable innovation. These values have to be agreed, communicated, role-modelled and reinforced. Sharing the vision, direction and living the values are extremely important since, studies into innovation have highlighted that one of the keys to innovation is that people feel aligned and committed to the organisation and its goals.

Leadership throughout the organisation is crucial for innovation to occur. It is therefore important for the organisation to ensure all systems support the overall strategy and that individuals are empowered to make decisions and use their creative ability within a defined context. Research suggests that management should keep administration power (eg approving where to allocate funds), but ensure employees have a high degree of empowerment in relation to execution of a project.

Strategy and Planning Process

The organisation has to understand its environment to be able to focus its innovation effort. The ABEF requires the organisation to focus on understanding its business environment and to use this understanding to feed the planning process.

The ABEF requires the organisation to have a planning process which turns strategic imperatives into actionable plans. This includes developing directions for the innovation process and portfolio management process. The outcomes of the planning processes have to be communicated to ensure people know where to focus their creative efforts. The ABEF further requires the organisation to review how it manages its resources and assets with a focus on increasing its value into the future. Commercialisation of the intellectual property is a vital aspect of this part of the ABEF.

Data, Information and Knowledge

Use of data, information and knowledge is critical to the success of the innovation process. It impacts how the organisation focuses the collective creative effort. It is also vital for progressing any initiative through the innovation process. There is a famous quote from Edward de Bono that creativity has never harmed an organisation, but bad judgement has. This category is about ensuring the organisation is clever in its way of applying judgement through collecting relevant data and turning it into information and knowledge.

The organisation needs to decide what data it requires to assess projects as it passes through the gates in the innovation process. It will also need to define how this data is going to used as part of the decision making process. The same issues are true for how data will be used as part of the portfolio management process.

An innovative organisation is always changing and as a result needs people with a systemic view that can progress innovative initiatives in the best interest of its stakeholders.