Innovation Audit

Innovation Audit Is Good For Your Business Company : While it is generally recognized that innovation is important and increases shareholder value, what is less understood is how to become more innovative. An innovation audit reviews current practices that enable consultants to advise on alternative and additional actions and techniques that companies can adopt to improve and maximize their innovation capabilities.

The previous paragraph briefly summarizes the reasons for an innovation audit. They are designed to assist companies in understanding their current innovation practices, and how these can be improved or added. Indeed, audits can shed light on some practices that actually hinder innovation, and these need to be reduced or stopped.

Why? All companies interested in growth will see how they can be innovative and improve, and it is widely recognized that innovation capability is one of the key determinants of long-term profitability and viability. Therefore, companies will, all want to improve their processes to maximize their innovation capabilities and maximize opportunities for growth.

All organizational systems must support innovation. Corporate executives need a means to audit their companies’ innovation capabilities so that they can understand the overall performance of their innovation processes and where they are lacking. An innovation audit is a proven method for enhancing innovation. It examines key indicators, determines strengths and weaknesses and identifies ways to increase innovation across the organization.

Subsequent reports tell you what is going well in terms of culture, processes, communication and actions. It also analyzes what hinders innovation.

The results of the audit should be a clear identification of problems and barriers to innovation. This allows you to significantly improve the culture and innovation process in your business. It should also lead to higher levels of motivation across the organization, resulting in more innovative organizations, and entrepreneurship that welcomes and initiates change. Everything leads to the ability to apply fresh ideas to generate revenue or reduce costs.

A summary of the benefits of an innovation audit is as follows:

· Improve the company’s innovation capability;

· It identifies opportunities to increase innovation;

· It explains where the organization needs to focus to maximize innovation success;

· It embeds innovation in company processes;

· Can build individual creativity to be innovative;

· Can identify and control the barriers that hinder creativity and innovation;

· Encouraging innovation in organizational culture; and

Can align organizations in common goals and actions.

Examples of questions that can be asked include:

· Innovation strategy

o Is there an innovation strategy?

o Does the innovation strategy support the company’s strategy?

o Is the innovation strategy known and understood throughout the organization?

· Idea generation

o Are ideas easy to get from staff?

o Are ideas submitted from different levels and departments?

o How many ideas were submitted during the last twelve months?

· Selection

o Were financial and valuation techniques used to select projects?

o Is there an appropriate mechanism for assessing potential projects?

o Are decisions made quickly?

· Application

o Is there an appropriate project review mechanism?

o Are there appropriate mechanisms for capturing lessons from the project?

o Is there a link between the appropriate departments?

· Organization

o Does the organizational culture support innovation?

o Does the individual have innovation goals and objectives?

o Are there rewards and recognition for innovation efforts.

Sample audits:

Audits can be carried out at different levels. One level is an on-line survey completed by client companies and their staff. The survey can be based on the following five areas:

  1. Innovation strategy- why, what, where, when;
  2. Idea generation – creativity;
  3. Selection – which one;
  4. Implementation – make it happen;
  5. Organization – how.

The responses are then analyzed, and a report is presented to the client containing conclusions and recommendations.

The second tier adopts the online survey, mentioned above, as a starting point. Once this is completed and analyzed, face-to-face interviews will be scheduled with selected staff. This provides a more in-depth fact base from which to draw conclusions, insights, and recommendations.

Examples of Other Audit Methodologies

Innovation Diamond considers the following four titles:

  1. Product and technology innovation strategy (need for new products to be linked to company goals);
  2. Resources: Commitment and Portfolio Management (portfolio must have maximum return on investment,
  3. balanced project – risk, market, technology, etc, and strong link between effort and strategy); Idea-to-launch system: Stage-Gate®;
  4. Climate, culture, team and leadership.

An alternative is to adopt the McKinsey 7S framework based on:

  1. Strategy – which considers questions around the Strategic Plan, innovation and change;
  2. Structure – this considers questions about roles and responsibilities;
  3. System – this looks at the processes that govern the actions of the organization;
  4. Skills – this reviews skills within the organization as well as identifying what gaps exist in the skill set;
  5. Staff – this considers personnel and team aspects;
  6. Style – touches on organizational culture and adopted tools;
  7. Shared Values ​​- these also touch the culture, vision, rewards and attitudes of employees.

The third technique is to consider the following five main headings:

  1. Strategy and leadership;
  2. Organization and culture;
  3. Planning and selection;
  4. Structure and presentation;
  5. Communication and cooperation.

The next approach is to equate innovation with fruit trees that produce extraordinary results. Such a plant results from how it is fed (through its roots) and what supports the tree’s environment. Within organizations, the roots are people, groups, teams, leadership, and the innovation process.

Environment is culture. The results consider the organization’s capabilities in incremental and breakthrough initiatives, how the organization develops its ideas, manages teams, decision-making, and learning.

Another approach combines quantitative and qualitative data sources to provide a complete picture of a company’s innovation strengths and weaknesses. It uses interviews, assessment of financial data, review of relevant project documentation and bespoke market research to assess overall innovation performance and identify factors that may have contributed to poor results.

This approach looks at the organization’s innovation performance to date, the organization’s ability to relevant activities (strategy, creativity, selection, development, exploitation and resources). It reviews top management’s leadership and attitudes towards innovation.

All the different methodologies follow the same tactics. They ask questions to understand the processes, attitudes and ethos of the organization and its members. They used surveys and interviews in a structured format, with almost the same title.

Conclusion

To conclude, an innovation audit is an examination of current innovation practices. Such understanding enables consultants to provide advice on alternative and additional measures and techniques that companies can adopt to improve and maximize their innovation capabilities.

Innovation for Growth is a business consulting service that offers advice on innovation, innovation audits, strategy, business plans and business research.

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