Question

##################Raffi Balin's coffee importing company employs 120 people. Each week, the staff meet for breakfast, and discuss possible improvements. Each employee is encouraged to share, and is rewarded for good ideas. For example, one of the coffee roasters suggested that the firm import tea as well, because new health and lifestyle concerns are causing many consumers to reduce coffee consumption in favour of tea. A tea division was formed, and became successful (after a few false starts that helped everyone learn). The coffee roaster was put in charge of the new division and, as a result, saw her annual salary triple. Is Raffi's business an innovative organization? Explain?

Answer 1

By comparison, think of the long strides many businesses have made in reengineering their supply chains, boosting product quality, and rolling out lean six sigma. These efforts have paid huge dividends. And yet when it comes to innovation, the gap between aspiration and accomplishment seems as big as ever.

Over the past two decades, we’ve led dozens of innovation projects and have talked to thousands of managers about the challenge of building a high-performance innovation “engine.” What we’ve observed is that in most organizations, the innovation power­train is missing several critical components.

In my experience, it can take several months for a company to hammer out its defini­tion of innovation. As a starting point, it is important to look back over a decade or two and identify the sorts of ideas that have produced noticeable margin and revenue gains.

Having a practical, agreed-upon definition of innovation makes it easier to set goals for innovation, to allocate resources to innovative projects, to plan a cadence of innovative product launches, to target advertising on high-value breakthroughs, and to measure innovation performance.

Raffi's business measure just about everything that has an impact on the bottom line, yet strangely, they often shy away from measuring innovation. Granted, it is difficult to measure. Historical benchmarks are of limited value when a product has no antecedents, and it’s hard to pin down the future value of an idea that exists only as a concept.

Nevertheless, there are ways of measuring innovation performance. A comprehensive dashboard should track:

• Inputs: the investment dollars and employee time devoted to innovation, along with the number of ideas that are gener­ated internally each month or sourced from customers, suppliers, and other out­siders.
• Throughputs: the number and quality of ideas that enter the pipeline after initial screening, the time it takes for those ideas to move from concept to proto­type to reality, and the notional value of the innovation pipe­line.
• Outputs: the number of innovations that reach the market in a given period, the percentage of revenue derived from new products and services, and the margin gains that are attributable to innovation.
• Leadership: the percentage of executive time that gets devoted to mentor­ing innovation projects, and 360-degree survey results that reveal the extent to which execu­tives are exhibiting pro-innovation behaviors.
• Competence: the percentage of employees who have been trained as business innovators, the percentage of employees who have qualified as innova­tion “black belts,” and changes in the quality of ideas that are being generated across the firm.
• Climate: the extent to which the firm’s management processes facilitate or frustrate innovation, and the progress that is being made in remov­ing innova­tion blockages.
• Efficiency: changes over time in the ratio of innovation outputs to inputs.
• Balance: the mix of different types of innova­tion (product, service, pricing, distribution, operations, etc.); differ­ent risk cate­go­ries (incremental improvements versus speculative ventures); and differ­ent time horizons.

Thankyou!!