What does it mean to be innovative?

Right now, in literally hundreds of board rooms and senior executive suites, management teams are preparing edicts to their teams to "become more innovative". All of the recent press indicates that senior managers are turning their focus to innovation, and are challenging their teams to become more innovative. Three different studies over 2005, by firms such as Bain, Booz Allen and Arthur D Little, all confirm that innovation is a key focus for senior executives.

There's just one problem. What, if anything, does "become more innovative" mean to the people in mid-level management and on the shop floor? Can we translate this rather vague pronouncement into something that people can actually do? What motivation or incentives apply to these pronouncements? How does the workforce come to understand that this initiative is important?

Well, first I think the management teams need to be more specific. Instead of "become more innovative" they need to set goals. P&G and 3M have set innovation goals for their firms, so why can't other firms do likewise? Seems to me a firm would set a goal that 5% of its revenue in two years will come from products or services newly released in the market. Set some goals that are measurable, realistic, attainable and in a reasonable timeframe.

Second, the management team should indicate the areas for innovation. Should the teams work on "incremental" innovation - in other words, make the existing products a bit better or adapt them for new markets, or should the teams work for disruptive innovation, attempting to identify new products or services or business models that will dramatically change the landscape in a particular industry? A lot of this question has to do with timeframes and expectations for short term and/or long term change.

Third, the management team needs to indicate if the firm itself and its processes should be innovated. Are we merely talking about dressing up the processes and products we already have and use, or are we going to examine the internal approach and how we work as well? Given that any change is hard in an organization, poorly defined change is even more difficult. Without exact definitions, measurable actions and outcomes, introducing innovation by fiat will be very hard to do.

What can the management team do? Let one thousand flowers bloom. Encourage small team innovation and idea generation. Encourage change and promote change through tweaks to the culture, motivation and compensation systems. Provide tools and processes to support innovation. Listen to customers, business partners and employees who have great ideas. Don't dictate the result - provide the means.