Creating a world class innovation infrastructure – lessons from the best of the best
When companies invest to ensure their innovation is of the highest quality, the goods and services they provide ultimately become the better for it - with us all as the beneficiaries.
The most successful innovators stand out from others by encouraging idea generation and the invention process. They instill a culture of innovation within their organisations and invest in R&D to keep the inventive process alive. They have established systems for vetting their innovation funnels and determining which ideas are worthy of protection. They have deep understanding of their customers’ needs. They rigorously monitor prior art and the competitive landscape, and prosecute the best-of-the-best in terms of concept generation.
So says Bob Stembridge, marketing communications manager at Clarivate Analytics. For the last seven years, in order to identify and celebrate the achievements of the top innovators in their fields, Clarivate has been running a programme to quantify the innovation performance of global organisations through the use of patent metrics. The result is its annual Top 100 Global Innovators report.
In this, the first in a series of articles that Clarivate will be supplying to the IAM blog, Bob examines the lessons these leading innovators teach about the innovation process and how it works in tandem with patent and business strategy. At the end of the piece, he also provides a very handy checklist to benchmark your organisation’s innovation strategy against what the best in the world do. Here is what he has to say:
There are many definitions of innovation. To Soumitra Dutta, co-author of “Innovating at the Top”, it is the translation of ideas into value-adding products and services;
“New ideas lie at the heart of innovation, but ideas alone are not enough. Innovation requires translating ideas into value-adding products and services. . . . Bridging the gap between an idea and its beneficial result is the crucial step in innovation.”
For ex-US president Barack Obama it is about economic growth and job creation through the coupling of ideas and a strong IP system:
“Innovation is the primary source of economic growth, job creation and competitiveness in today’s global economy. An efficiently operating intellectual property system is critical to our ability to spur innovation and bring new services and products to the marketplace faster.”
But whatever definition you choose, a common theme is that of innovation as a process for creating value from creativity using the protection of intellectual property rights to generate returns. Successful innovators are therefore those who best know how to turn concepts into cash through protection, development and commercialisation of their ideas.
But how exactly do successful innovators perform this magic? What tricks and tips do they have to offer the aspiring innovator in their quest for fame and fortune? By examining some common practices and characteristics of top innovating organisations, it is possible to glean some insight.
Investment in discovery
Over the years, we have learned that top innovators consistently invest more in R&D than other organisations. Last year, for example, the group of top 100 innovators invested on average 9.1% more in R&D than S&P 100 companies. Those organisations that have been recognised in the 100 consistently in each of the last seven years invest on average around 6% of sales in R&D.
Innovation as a tool for addressing competition
Companies are seeing their existing offerings being replaced by new ones through the combination and convergence of diverse businesses and technologies. Remaining competitive and agile amongst such fierce competition in fast changing environments is a common challenge. Top innovators excel in recognising and addressing this challenge by rigorously monitoring the competitive landscape and deploying agile innovation using methods such as the 3P (product, process, and people) principle.
Aligning invention with market needs
Innovation is most effective when it is aligned with market needs. Successful innovators therefore are those that can match customer expectations for high performing products, systems and services. Having a deep understanding of people’s needs and aspirations, and using that understanding to deliver innovation that is personal, relevant and impactful, is a key factor of success.
Other attributes include a relentless focus on continually developing new solutions that allow customers to work more efficiently, effectively and securely, and constantly reminding yourself that your customers will ultimately determine what the true innovations are.
Beyond that, however, is also the ability to identify unarticulated customer needs. As Henry Ford put it: “If I had asked my customers what they wanted, they would have said a faster horse.” That ability to recognise and develop solutions to unspoken and unmet needs is a clearly identifiable trait of successful innovators. They are telling us what we need, even though we may not realise it at the moment.
Creating an innovation culture
Successful innovators put innovation at the very core of everything the organisation does. It becomes a habit and can even become self-sustaining - innovation drives energy and motivation for the internal community, and enables best-in-class expert recruitment in new emerging domains.
Innovation flourishes when you take away the fear to fail, encourage people to take controlled risks and create a healthy mix of diverse skills, cultures and experiences within your workforce. Creating an environment in which smart and creative people have the resources they need to succeed and the freedom to take risks and learn from mistakes can pay enormous dividends.
There are some interesting approaches that can be taken in establishing a more formal innovation infrastructure. Examples include:
An Innovation Department to define challenging tasks and to resolve problems and identify technologies to target as a priority.
An internal incubation system to promote the emergence of breakthrough ideas that may give rise to state-of-the-art research programmes.
"Innovation units" comprising multidisciplinary teams - technical, commercial and marketing experts working with industrial players to fine-tune the potential of innovative ideas.
A network of Innovation Managers at local sites to present and explain innovation strategy, directly connected to the R&D and Innovation Management, with wide freedom to act locally.
Programmes that recognise and celebrate innovation success can also be effective in fostering an innovation culture. These can take the form of internal schemes to reward the most innovative initiatives developed within an organisation, annual awards to recognise exceptional research that has led to technological or societal breakthroughs, or career paths that reward the most brilliant innovators by conferring “expert” status which is challenging to achieve and keep.
A further important aspect of establishing an innovation culture can be to provide training programmes. These might include a process and support for the filing of patents, education and training throughout the year to raise awareness and encourage contribution of inventive ideas, or training of new recruits in technology transfer and in setting up a business.
Collaboration as a cultivator of innovation
The presence of academic and government entities amongst the alumni of top innovators confirms the role government can play in encouraging innovation, as well as the longer-term potential for corporations and academia to collaborate in bringing new ideas to fruition. They provide evidence of the collaborative nature of innovation – open innovation – and how universities, government agencies and scientific research centres are becoming more critical players in the innovation process.
For research organisations, technology transfer is a logical extension of research activities through partnership with industry (public/private structures) - both with large corporations or SMEs, as well as with the socio-economic world (local authorities etc).
Within specific industries, open innovation is a key to success. For example, without open innovation, many of the advances in mobile communications that we have come to rely on simply would not have been possible.
The value of a strong patent portfolio
Intellectual property is the bridge that connects innovation with economic growth. Without it there may be creativity, but it won’t have sustained marketability. It is also much more than a set of rights enabling defensive posturing for the freedom to exclude. Patents are the asset class of the 21st century, with the potential to generate revenue, transform economies and contribute to growth.
Patent filing is a key component of business strategy, not only in terms of protecting the results of R&D work, but also to enable technology transfer. Patents play an active role in standardisation and licensing, too.
Having a high quality portfolio that helps the IP strategy to fully align with the overall business strategy is a vital part of being a successful innovator.
Having reviewed some of the key lessons learned from the top global innovators over the last seven years, we may summarise some of the specific ideas and put these together into an innovation checklist to see how well your organisation matches up to the world’s best.
Have innovation at the very core of everything the organisation does, as part of your DNA.
Establish innovation as part of the organisation’s mission and core values.
Embed innovation in all business areas to build strength in areas from manufacturing to marketing, to strengthen and focus the IP portfolio and to transform business systems and processes to drive efficiency and productivity.
Maintain a start-up attitude with all parts of the organisation being driven by the desire to create the most productive and effective solutions in the marketplace.
Identify and address unarticulated and unmet customer needs.
Create an environment where smart and creative people can thrive.
Build a collaboration infrastructure where ideas can be shared and exchanged across all levels of the organisation.
Encourage laboratory-industry interaction, in particular by organising forums to develop collaboration with technology sectors.
Protect your innovation with a strong and fresh IP portfolio that works best for the business.
The next edition of the Top 100 Global Innovators report will be published on 23rd January. Be sure to check it out to see if your organisation is an innovation leader.