Robert Shelton: Making Innovation Work Inside Companies

In the run-up to the GreenBiz Innovation Forum, GreenBiz.com executive editor Joel Makower spoke with Robert Shelton, director at the consultancy PRTM and co-author of Making Innovation Work, about the challenges companies face in creating innovative cultures and processes -- not only inside their companies, but in collaboration with a broad range of partners.

Joel Makower: You go into a lot of companies and talk about innovation. When you look at them, how can you tell if a company is really innovative or just talking the talk?

Robert SheltonRobert Shelton: I look at several elements. The first is how well they partner and collaborate, because innovation is a team sport. And the first level of partnership takes please inside the company. Do they work well across their organization? Are the technologists and the marketing people and the strategists working together?

The second type of collaboration is how well they partner with folks outside their company. Most companies will tell you that they have lots of partners. But if you dig in a bit you often find that these aren't truly collaborative partnerships they're simply sort of supplier relationships.

But, innovation requires that you capture the billion or so IQ points that know about your topic outside the company, and you pull them in. So, the first one is the measurement of partnership.

JM: What else do you look at?

RS: The second thing I look at is how good they are at the two aspects of innovation: creativity and commercialization. The creativity is the good ideas, coming up with solutions to peoples' problems, or findings ways to create value by meeting their unmet needs. Some companies are very good at that, but some are weak in this area.

The flipside is the ability to commercialize ideas. Some companies are good at creating ideas, but not very good at commercializing, so I look at the ideas that enter into commercialization and see not only how many come out, but how strong they are when they come out.

IF10That brings up another point: To take a mixture of both qualitative and quantitative measurement. A truly creative company will have a vision of where they want to go. They're not someone that says "Bring me good innovations, I'll recognize it when I see it." They go in and they create a vision of where the company needs to go, or the areas of improvement that they're after. And, that's the qualitative side.

On the quantitative side, if you dig in you'll actually find a portfolio that reflects that vision. Too often, companies talk about innovation in big bold strokes -- they're going to be the best, and nothing can hold them back. But, when you look at their portfolio, it's overbalanced toward incremental innovation and they lack the investments in breakthrough and radical innovation that are really going to take them to the new areas that they talk about.

So, it's important to realize that you not only need the vision, but you need to have this portfolio of investments that can translate the vision into reality.

Finally, there's the metrics and motivators. Too often companies talk about their innovation, but they don't measure the right things -- for example, a company that measures only patents, but claims that they want to be the biggest and the best, probably will have difficulty getting there.

So, those are the pieces I look at: The metrics and the motivators, the balance between creativity and commercialization, their vision and their portfolio, and their partnership capability.

JM: Let me ask you the flipside of that question. If a company has those elements, the four things you just talked about, are they going to pretty automatically be innovative? Or are there things that can get in the way?

RS: They're likely to be successful, but just exactly the height of innovation success they'll reach is tied to two other factors. One of them is that how you innovate determines what you innovate. If a company's trying for relatively modest innovations, then they will need to design a system that can deliver exactly that. But if they're trying to create the next breakthrough new things or things, they'll need a system that runs at a higher octane and a higher RPM. That's built to give them a lot more innovations and a lot bigger ones.