Re-target your innovations

Apply innovations in the right amounts to the right areas to prevent your organization's extinction, or, at least augment net income. Consider managing innovations, rather than processes, says Geoffrey Moore, venture capitalist and author of “Dealing with Darwinism” and “Crossing the Chasm.

07/01/2007


Apply innovations in the right amounts to the right areas to prevent your organization's extinction, or, at least augment net income. Consider managing innovations, rather than processes, says Geoffrey Moore, venture capitalist and author of “Dealing with Darwinism” and “Crossing the Chasm.” Innovations happen at four stages, and many companies get stuck investing too much at the wrong places in the cycle, says Moore, a partner at

TCG Advisors

.

Invent. Are all investments needed? Non-mission-critical efforts should be purchased or “partnered.”

Deploy is often mission critical; too few resources creates failures.

Manage is seen as mission critical, and resources often get mired here.

Offload can be a strategic decision based on careful planning or retirement of the function, process, or product. Resources often get added here to support what has become a non-mission-critical area.

Moore emphasized caring for people, finding ways they can continue to grow in the evolving organization. (Taking one step back in the cycle often is best.)

Know what it takes to play, Moore says, then find differentiation, improve productivity, realize that failed attempts are bad, and drive out waste (differential projects that don't go far enough, basic projects that exceed expectations, and unaligned innovation efforts that cancel each other out). Darwin's dirty trick is that today's differentiator is tomorrow's price of entry; it's like running up the down escalator.

Don't innovate just to sit at the table, Moore says. Free resources trapped in the wrong areas to innovate where it does the most good. To do that:

1. Centralize . If something is no longer core, centralize the process, reduce its size, break the web of customer entitlement, create single decision-making authority, and manage risks.

2. Standardize . Reduce variety and variability of processes delivering similar outputs to reduce costs and minimize risks.

3. Modularize . Deconstruct the system into component subsystems and standardize interfaces for future cost reductions.

4. Optimize . Eliminate redundant steps, automate standard sequences, streamline remaining operations, and substitute lower-cost components.

5. Instrument . Characterize remaining processes for variability of key parameters and develop, monitor, and control systems to manage performance.

6. Drive out processes to further reduce overhead and costs.

Moore speaks at industry events, and was keynote at RSTechEd in June.

MHoske@cfemedia.com





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