This month’s Innovation Day looked at how a sophisticated governance framework can help improve the productivity of the innovation process while enabling managers to better identify the balance between creativity and control.
Most companies use some form of idea-to-launch process with staged gates for their new product development (NPD). Applying effective governance control can improve the NPD process and is crucial to finding the “sweet spot” that balances creativity and innovation, and to driving portfolio productivity and improving financial returns.
The classic structure of managing the idea-to-launch process is usually through feedback control. Performance reviews and feedback – such as data, key performance indicators and top management controls – acts as a “trigger” to “tweak” the system until improved routines and outcomes are realised, but this can be backward looking.
Instead of only focusing on performance, managers can apply a feedforward control that anticipates the outcome of a decision and forecasts future performance: What are we delivering? What are we going to put in the market place? How big should the range be? How much will we sell? By doing this, managers shift their focus to using measures that look ahead to assess future value.
Mike Bourne, Professor of Business Performance at Cranfield School of Management, explained at the Innovation Day that by combining feedforward control with validation targets, research identified a new concept – feedforward anticipatory control (FAC). FAC is a vital element in governance control and “can help management achieve a better balance of control and creativity… to drive productivity and profit growth” (Baker and Bourne, 2014).
The FAC assessment framework – a seven level maturity process – was presented to the clients to showcase how a higher FAC sophistication level will create a better balance of short- and long-term innovation needs. Clients – including Thales, DHL, National Audit Office, and Camden Council – assessed each level of the FAC framework, looking at the application and learning from lower levels to achieve higher levels of sophistication in their innovation governance.
Next, this group will explore how to Make Radical Innovation Happen
in their workplace. For more information and to join, please view the event page.
Source: Baker, M. and Bourne, M. (2014) A Governance Framework for the Idea-to-Launch Process: Development and Application of a Governance Framework for New Product Development. Research Technology Management, 57 (1) 42-49.