Sunday, July 01, 2007

Another dimension in innovation measurement

Morten T Hansen and Julian Birkinshaw describe yet another method of analyzing and improving a company's ability to innovate. They describe an "Innovation Value Chain" which gets evaluated in its ability to Create, Convert and Diffuse innovation. In other words we often just think about the ideas, but many great ideas go un-monetized because they get lost in the shuffle, are not properly funded, or not properly socialized.

  • Create means to generate ideas.
  • Convert means to focus on the right subset of ideas to convert into practical products/services.
  • Diffuse means to line up the rest of the organization and customers to adopt the new product or service.

They have a fairly simple tool to gauge an enterprise in the three blocks of the chain, and give some reasonable examples and remedies for what to do for your "weak link" in the chain. They make a compelling case that a company will tend to under invest in the weak link, but continue to invest in areas where they are strong, and how that might ironically crush the innovative spirit.

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