Whilst it is generally recognised that innovation is important and enhances shareholder value, what is less well understood is how to become more innovative. Innovation audits review current practices enabling the consultant to advise on alternative and additional measures and techniques that companies can adopt to improve and maximise their innovation capabilities. As such, they are designed to assist companies in understanding their current innovation practices, and how these might be improved upon or added to. Indeed, the audit might illuminate some practices which are hindering innovation, and these need to be reduced or stopped. Why? All companies interested in growth will be looking at how they can be innovative and it is increasingly, and widely, recognised that innovation capability is one of the key determinants of long-run profitability and survival. Companies will, therefore, all be wishing to improve their processes to maximise their innovation capabilities and maximise their opportunities for growth.
A summary of the benefits of an innovation audit is as follows:
1) It enhances the company's innovation capability;
2) It identifies the opportunities for increasing innovation;
3) It clarifies where the organisation needs to focus to maximise innovation success;
4) It embeds innovation in the company's processes;
5) It can build on individuals' creativity to be more innovative;
6) It can identify and control the barriers that stifle creativity and innovation;
7) It fosters innovation in the organisation's culture; and
8) It can align the organisation in common purpose and action.
There are different forms of innovation audit, but a common one is to review five principal areas:
1) Innovation strategy - the why, what, where, when. This element performs two vital roles - it provides a direct link with the organisation's corporate strategy, and it provides a framework and guidance within which to direct the organisation's innovation efforts;
2) Idea generation - the creativity. Ideas are the lifeblood of any organisation's innovation effort. It is, therefore, critical that there are processes, procedures and methods in place to capture ideas from a diverse range of sources;
3) Selection - which. Whilst ideas are critical, knowing which projects to pursue can make or break the innovation effort. Resources spent on the wrong projects divert necessary funds and time from those which might prove successful;
4) Implementation - making it happen. Innovation includes the successful commercial exploitation of the idea. Making it happen defines the culmination of the whole innovation process;
5) Organisation - how. Successful innovation requires more than processes. It requires the whole organisation to have an innovative ethos.
In conclusion, organisations need to review their innovation processes in the light of the above comments. Failure to innovate can often lead to failure to grow. Just think about all those great companies of yesteryear which no longer exist today!