The definition of the word "success" in the business world is almost always interchangeable for “profitable.” When that word is used in boardrooms and executive speeches, the meaning is usually pretty clear.
But what does the word "innovation" signal?
It’s been perhaps one of the biggest corporate buzzwords and initiatives for decades. Mention the word innovation to two people in the same organization and what are the chances they would give you the same definition?
They would probably apply it to different functions as well. Is innovation a new product line? Does it represent an improved process for efficiency? Is it a great idea?
The answer, simply, is yes.
The widespread fuzziness of the word leads to impaired productivity and waste. If we can’t clearly define the word, how can we implement the concept in our companies? With a universal corporate Innovation Standard. The Product Development and Management Association (PDMA), along with the TIM Foundation, have crafted a Standard to achieve greater innovation in your company.
Developed over the past four years with the assistance of a 30-person Innovation Expert Panel and PDMA’s Standards Council, the Standard provides models that companies can follow when designing, developing, and implementing an innovation management system. The Standard can be used for conformance, compliance, and certification purposes. An introduction to the Standard, as well as the first formal training and certification sessions, will be held in October at the annual Product Innovation Management Conference (PIM).
The Innovation Standard is the product of four years of work. But PDMA, throughout its almost 40-year history, has drawn on its consistent research, the real-world examples of members’ experiences, and academic endeavors. In the last round of surveys, the organization was able to identify dozens of best practices and typical results of the best-performing organizations.
Among the most striking results: The top 25% of companies derive almost half of their revenue on new products alone; the others lagged behind at merely about 25% of revenues from new products. "The Best” organizations averaged one successful idea for every 4.4 total ideas. The others burned through 10 ideas that didn’t see the light of day for each successful one.
The best also use a specific new product strategy at a 40% higher rate than "the rest," as well as a host of other good habits. That statistic, as well as the measures of success throughout the PDMA survey, clearly defines the usefulness for a universal standard.
Among the most alarming findings throughout this process was discovering that most organizations are not conforming to even the most basic levels of the Standard. There is almost unlimited opportunity for bringing good innovation practices to the table. The Standard is not a rigid set of rules, but rather practices and habits that can be implemented differently, depending on an organization’s specific situation.
It’s a solid, but flexible framework that allows a company to use its existing resources to achieve a higher level of innovation and, in turn, success. Nearly all organizations—even the most innovative—suffer from wasteful failures in their innovation and new product development processes. Embracing standardization can only provide improvement, as well as several specific benefits, including:
- Immediate contributions to improvement of innovation capabilities results in more profitable innovation output and reduced time to market;
- Reduction of waste, which reduces the cost of failure (and failure is inevitable; you better embrace it);
- Rapid understanding of current capabilities and directional diagnostics of how to improve against a universal benchmark;
- Efficient implementation or reorganization of innovation management processes, systems and toolsets; and
- Recognition of proficiency in new product development.
If individuals and organizations are adhering to an Innovation Standard, and if educators and consulting firms use a shared set of coherent terminologies, then processes, practices, and tools can be adopted more efficiently, leading to improved productivity and reducing inefficiency in innovation processes.
Innovation is a lot of things to a lot of people. But if we can begin to speak the same language around innovation, and use the same accepted universal benchmarks, then success should naturally be bestowed on all organizations, but particularly those who invest in their performance against that very benchmark. And we know what success means.
—Stephen Uban is the chairperson of the PDMA Standards Committee and a PDMA board member. Those interested in obtaining the Corporate Standard, related training, or certification, please email email@example.com.
[Image: Flickr user RaSeLaSeD - Il Pinguino]