Bridging The Innovation Execution Gap“Next Practices” In Innovation Management by the

American Institute for Innovation Excellence

Who We Are…

• The American Institute for Innovation Excellence is a 501(c)(3) non-profit organization organized as a professional research “think tank.”

• Under this organizational framework, the AIIE limits and dedicates its operations to promoting innovation excellence, for the exclusive and charitable benefit of government agencies, corporate entities and the greater good, through research, development, education and publication within the following focus areas:

– Innovation Management Best/Next Practices Development

– Innovation Management Maturity Concepts – Innovation Execution Delivery Methodologies – Portfolio, Program and Project Execution Models – Innovation, Idea and Creativity Concept Education

and Training

www.AIIEOnline.org

Innovation Management “Pain Points”

• Taken from a 2010 survey* of business executives, innovation management leadership and other business/innovation management practitioners:

1. Aging, inefficient and ineffective innovation and new growth-based processes, methodologies, tools, techniques, etc.

2. Creating, embedding and maintaining a culture of innovation3. Reliable, repeatable, effective and efficient innovation capabilities4. Growing gap between innovation/organizational strategy and

operational execution5. Workforce not skilled in creative problem solving, innovation or

entrepreneurship

* November 2010 American Institute of Innovation Management LinkedIn Survey

• Research Question:– “Why does the innovation

execution gap exist and what processes, tools, techniques and other leadership and/or management approaches can be developed to bridge that gap?”

Research Approach

1. Review & Analysis: • Defining Execution and Strategy• Constructing the Strategy-Execution Roadmap• Identifying the Gap

2. Analysis: • Traditional Strategic Execution Models & Approaches• Recent Advances in Strategy Development and Execution

3. Concept Development: • Building an “Executable” Strategy• Building an Execution Focused Culture• The Strategic Innovation Roadmap

4. Implementation Recommendations:• Strategy-Execution Gap Closure Suggested Implementation Roadmap

“Companies typically realize only about 60% of their

strategy’s potential value because of breakdowns in planning and execution”

– Harvard Business Review

Why Are We So Bad At Executing Against Strategy?

“82% of Fortune 500 CEOs feel their organization did an effective job of strategic

planning. However, only 14% of those same CEOs indicated that

their organization did an effective job of implementing

the strategy”

- Forbes Magazine

What is “Execution?”

• Two possible definitions of "Execution" from FreeDictionary.com:

1. The manner, style, or result of performance; Implies action.2. The act or an instance of putting to death or being put to death

as a lawful penalty.

But action on what exactly? Strategy.

Coincidence? In today's fast-paced, delivery-oriented business climate, the two definitions are logical partners. ‘Execute...or be executed’ is the mantra of today’s business world and ‘execute’ in the organizational context means action.

What Makes For Effective Execution?

1. Clear and consistent vision of the strategy2. Clear and consistent leadership commitment and attention

from executive leadership ranks through middle / operational management

3. Defined goals, tactics, milestones, deadlines and metrics to support execution of strategy

4. Effective and efficient tracking mechanism to report against goals, tactics, milestones and deadlines

5. Clear and consistent responsibility, authority and accountability

6. Performance measurements tied to execution strategy

Project Management Discipline:• Do we know where we are going?

– What does “Done” look like?• How are we going to get there?

– What is our plan?• Do we have enough time, money and

resources to reach the end?– Have we connected resources to the

plan?• What may prevent us from reaching the

end?– Have we analyzed the risk and

developed mitigation plans?• Do we have some way to measure our

progress?

Execution Tools / Best Practices

American Management Association’s Ten Step Strategy Execution Model:

• Visualize the strategy• Measure the strategy• Report progress• Make decisions• Identify strategy projects• Align strategy projects• Manage projects• Communicate strategy• Align individual roles• Reward performance

What is “Strategy?”

• Strategy, or strategic direction, is… “the course of action that leads to the achievement of the goals of an organization's vision and mission.”

• When looking through the lens of innovation:– How does the execution of an innovation-related action plan add

value to your strategic intent? (vision and mission) – How does execution upon strategy target the goals, tactics and

measurements of the critical organizational functions? (objectives)– How can the organizations key assets and resources, with respect to

innovation, have the greatest potential to provide strategic and competitive advantage?

“The main role of innovation management is to bridge executive decision-making and strategic direction with the

execution of project-based initiatives and front line operations of the organization.”

Creating An Executable Strategy

• Executable strategic plans have:– High-level, phase-based deliverables– Detail-level milestones and tasks– Accountability and governance structures in place– Performance metrics established and validated– Resources who are identified, secured, trained and

empowered– Communication and collaboration plans established– Risks assessed and mitigation plans documented

Strategy Development Tools / Best Practices

1. Strategic Planning Model

2. Scenario Planning

3. OGSM• Objectives• Goals• Strategies• Measures

The Strategy-Execution Roadmap

Turning Strategy Into Execution

• Clearly define the end result and be courageous to kill the effort if it strays from its intended result

• Articulate and communicate the linkage between strategy and operations

• Establish accountability and ownership by encouraging existing supportive behaviors, discouraging unsupportive behaviors, educating / “up-skilling” where necessary and punishing where appropriate

• Ensure the leadership team is cognizant of common obstacles and are provided with methods of removing, overcoming or otherwise mitigating them

• Communicate often, listen intently and support fast feedback loops• Free the process of rigorous oversight or burdensome process• Share credit, reward, recognition and celebration in success and

learned failure

The Innovation Execution Gap Model

The Trouble With “Day-To-Day Operations”• Root Cause of the Idea Gap:

“Day-to-Day Operations”

• Suggested Solutions:• Reduce day-to-day operational

responsibilities• Increase resources• Design performance incentives / disincentives• Remove work flow and/or process-based

obstacles• Establish frequent and focused

communication on work balance• Design a roadmap, plan or other structure

and make it visible• Be honest about changes and share both the

benefits and the risks of the strategy• Establish a specialized team to work outside

of the day-to-day operations

Suggested Solutions for:“The Execution Gap”• Provide innovation leadership training

and a hands-on practice lab where they can both identify and eliminate unsupportive behaviors as well as build supportive skill sets

• “Incentivize” or otherwise structure their pay, bonus and other performance based goals to align with the desired outcome

• Establish an idea and/or innovation management process that allows ideas and information from both directions to by-pass the middle management layer entirely

• Hold middle / operational management accountable, including punishment for non-conformance, to executive directive

Creating A Climate / Culture of Innovation Execution

• Treat innovation as business discipline and demand appropriate rigor, methodology and tools be applied

• Leverage a universal, dedicated platform to ensure that everyone speaks a common innovation language and understands the process flows associated with innovation management activities

• Focus employee innovation attention to the problems / opportunities that matter most to the organization

• Balance the innovation execution portfolio across all types of innovation…sustaining, incremental, breakthrough, etc.

• Encourage a diversity of thought, participants, leaders and approaches

• Force collisions between networks and ideas• Encourage smart risk-taking and fast failure

Common Success Factors for Strategic Innovation Execution

• Clear vision and precisely defined outcome• Measureable and easy to recognize milestones• Assignment of responsibility, accountability and

authority• Assignment of appropriate resources to complete

the work• Communication of accountability, including reward

and/or punishment for behaviors, actions and engagement

• Appropriate processes, tools and methodologies for use by the execution resources

Linking It All Together

ENVISION

• Vision– What is the Mission/Vision of the organization and how do

innovation and strategy align?• Objectives

– Have you defined your objectives?• Tactics

– What actions are needed to deliver those objectives?• Priorities

– Are the tactics and objectives prioritized?

ROADMAP

Using outputs from Envision…• Governance

– Define the leadership and oversight required to execute• Resources

– Assign an appropriate amount of resources (people, money, time and space) to ensure success

• Risks– Try to identify risks (speed bumps) along your roadmap

and define mitigation plans (alternate routes/detours) • Initiatives

– What specific projects or initiatives will be launched to meet the planned objectives?

ALIGN

Using outputs from Envision-Roadmap…• Communicate

– Share, inform, collaborate, harvest ideas…• Empower

– Provide people with the responsibility and authority to be successful

• Teaming– Team up “dreamers” with “doers”

• Direction– Ensure strategic intent is included in planning

MANAGE

Using outputs from Envision-Roadmap-Align…• Oversight

– Provide enough direction, guidance and support without creating bureaucracy

• Risk Management– Resolving issues and executing on risk mitigation

plans• Performance

– Linking reward and recognition to results

EXECUTE

Using outputs from Envision-Roadmap-Align-Manage…• Project Management

– Follow a disciplined execution model/approach• Metrics

– Measure and adjust• Change Management

– Guide and manage the change• Leadership

– Lead with courage, respect and resolve

Linking It All Together

Bridging The Gap Between Innovation Strategy & Execution

• Ensure that innovation management is treated as a true business discipline within the organization and is provided appropriate resources and leadership engagement

• Establish a robust, but flexible, process for managing innovation and for transitioning from concept to action

• Connect executive decision-making and strategy with the front line operations of the organization.

• Enable an organizational climate where change is managed effectively and ideas to enhance execution are supported

• Build the appropriate organizational structures, including resources, that support execution, empowerment and decision-making

To Innovate…ExecuteTo Execute…Lead

• Figuring out what problems you want to solve...takes execution

• Collecting ideas from employees, management, vendors, partners and customers...takes execution

• Filtering ideas and deciding which ideas you want to commercialize...takes execution

• Committing resources, both financial and human, toward commercialization...takes execution

• Developing a solid project plan to move the idea to reality...takes execution

• Marketing the product/service and making the idea known to the world...takes execution

• Making a profit on an idea...takes execution

Full Research Report Available:

American Institute for Innovation Excellence

http://www.AIIEOnline.org

Click on: Research

Published ResearchFall 2011 Report