Applying Innovation


David O'Sullivan & Lawrence Dooley

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    Innovation is an important force in creating and sustaining organizational growth. Effective innovation can mean the difference between leading with a particular product, process, or service and simply following the pack, with the resulting risk of stagnation and decline. Innovation transforms mediocre companies into world leaders and ordinary organizations into stimulating environments for employees. Innovation is the process of making changes to something established by introducing something new; these changes can be either radical or incremental. All organizations need to innovate, whether they are profit or nonprofit. Innovation is as relevant to services in a public hospital as it is for products and processes in a manufacturing company. Innovation takes place throughout an organization, from management boards and individual departments to project teams and individuals. In today's global economy innovation is often a collaborative activity that takes place across extended organizations and includes suppliers, distributors, and other strategic alliances. Despite its importance, many organizations fail to recognize the need for innovation and to develop skills to innovate on a continuous basis. If an organization is to be sustainable, it must develop its capability to manage its innovation process.

    The term innovation is ambiguous to some and often associated with visions of organizations that can create world-beating products that grow to dominate entire sectors of industry. This view is informing and often entertaining, but it also allows many practitioners to shy away from engaging in the concept of innovation, in the knowledge that such visions are rarely realized and often depend on factors such as previous market dominance and chance. This book is about looking into the practical techniques, large and small, practiced every day in leading organizations, that are used to manage innovation. Whereas innovation theory can inform the decisions that must be made by organizations, this book is primarily about the tools and techniques that put structure on the decisions organizations must make for themselves. Although the decisions vary significantly between organizations, the structures around the management of innovation are essentially the same.

    Applying Innovation is about describing how to systematically deliver innovations that add value to customers. The approach adopted is a symbiosis of management techniques that include innovation management, strategic planning, performance measurement, creativity, project portfolio management, performance appraisal, and knowledge management. Whereas other books offer in-depth insights into one or more of these areas, this book provides ingredients from each that combine into an easy-to-understand framework for applying innovation in any organization. This book contains a systematic approach to creating structure for the application of innovation in any organization. Applying innovation requires close attention to five key types of knowledge—goals, actions, teams, results, and communities—and, perhaps of equal importance, the relationships among all five. This book will show you how to develop a simple knowledge management process by which people anywhere in an organization can share innovation-related information. Systematic structuring and sharing of information can dramatically improve an organization's quest to add more value to customers, and that in turn helps organizations grow.

    Book Aims

    One of the main aims of this book is to map out the main concepts of the innovation process into an easy-to-understand and easy-to-apply framework: the innovation funnel. This book will help you understand key concepts in innovation management and particularly how to apply innovation to any organization. Innovation is defined as “making changes, large and small, to products, processes, and services in any organization, profit or nonprofit, that add value to customers and continuing to learn from that process so that it can be repeated continuously.” The aims of this book stem from this definition: to facilitate the learning and practicing of techniques, tools, and methods for applying innovation management. For this reason the book does not focus heavily on innovation theory but rather focuses on tools and techniques that have gained widespread acceptance in leading innovative organizations. This book is developed around a number of specific learning outcomes:

    • Understanding key concepts in the theory and process of innovation
    • Understanding how to manage and apply innovation
    • Using explicit skills for defining goals, generating ideas, empowering teams, and monitoring the results of innovation
    • Developing a simple knowledge management system for managing innovation
    • Working effectively as an individual and as a member of a team
    • Presenting, communicating, and promoting innovation plans
    • Applying what you have learned to managing innovation in any organization
    Book Structure

    The book is structured around the key concepts of applying innovation that are presented as elements of an easy-to-understand framework: the innovation funnel. For this reason this book is divided into five parts. The first part introduces innovation and, in particular, innovation management. The next four parts cover the four interrelated areas of applying innovation: goals, actions, teams, and results.

    The five parts are as follows:

    • Part I: Understanding Innovation
    • Part II: Defining Innovation Goals
    • Part III: Managing Innovation Actions
    • Part IV: Empowering Innovation Teams
    • Part V: Sharing Innovation Results

    Part I, “Understanding Innovation,” describes the main concepts behind the innovation process. Innovation is classified according to its impact on products, processes, and services. The difference between radical and incremental innovation is discussed. The special relationship between product innovation and process innovation is introduced. The process of managing innovation is then described. This part concludes with a chapter describing how the innovation management process can be structured and put to work toward achieving the objectives of the organization. The concept of the innovation funnel is presented as a metaphor for understanding innovation management in any organization.

    Part II, “Defining Innovation Goals,” describes the process of setting goals for innovation. Various goal-setting activities are described. Defining statements such as mission and vision statements are outlined. Identifying the key stakeholders for an organization is discussed, particularly in terms of what they require from the organization. Creating a set of strategic objectives for innovation is then described. This part concludes with a chapter that outlines how to create performance indicators for measuring the impact of the innovation process.

    Part III, “Managing Innovation Actions,” describes the various ways in which innovation goals can be achieved. Problem solving is often regarded as the first step in the innovation process, where problems are identified and solved systematically. Generating ideas that solve problems or meet particular goals is an important part of the innovation process. Various techniques for idea generation are described. Many ideas grow to become large-scale initiatives or projects that must be managed. A special kind of project is one that involves radical new product development. The final chapter in Part III looks at how to manage and balance a portfolio of projects.

    Part IV, “Empowering Innovation Teams,” describes a number of ways in which people can work together more effectively to achieve innovation goals. The part begins with a chapter that looks at leadership and individual responsibility. The concept of teams is then outlined, as is the importance of team participation in achieving goals. Motivation and reward are an important part of the innovation and creativity process. A simple but effective performance appraisal system is outlined by which people can be aligned with the innovation goals of the organization.

    Part V, “Sharing Innovation Results,” describes how to monitor and share information related to the goals, actions, and teams in the innovation process. The part begins with a chapter on knowledge management and how knowledge can be codified and shared in a collaborative environment. The next chapter looks at developing a simple knowledge management system that can later be expanded. A critical part of monitoring the results of innovation and making decisions is mapping the relationships between goals and actions, between teams and goals, and between actions and teams. These relationships can be described using a simple mapping technique. The part concludes with a chapter that describes how to extend innovation across an organization that includes management boards, departments, project teams, suppliers, distributors, and other strategic partners. Each of these organizations shares a common goal of providing value to customers, both internal and external.

    The relationships between the key knowledge areas discussed in these parts are illustrated in Figure 0.1. This figure is called the innovation funnel, and it forms the framework for understanding the knowledge associated with the application of innovation in any organization.

    Figure 0.1 Innovation Funnel

    The innovation funnel is a metaphor for understanding how to apply innovation and a structured way of defining the information requirements for managing and sharing innovation-related knowledge. The funnel illustrates how goals, actions, teams, and results interact with each other to manage innovation. Actions enter the mouth of the funnel and represent, among other things, alternative ideas for innovation. These ideas can come from many sources, including lead users and employees. These actions flow to the neck of the funnel, where they are evaluated and filtered. In the filtering process some will be eliminated, merged, or delayed and others processed into projects or initiatives that make change happen. This filtering process is controlled and constrained mainly by innovation goals and innovation teams. These controls loosen or tighten the neck of the funnel. Tightly defined goals can be visualized as closing the neck of the funnel, allowing fewer ideas through. This can simultaneously encourage the creation or identification of new ideas that have a stronger relationship with goals. On the other hand, better engagement of individuals and teams can be visualized as opening the neck of the funnel, allowing more ideas to be resourced and developed. The final arrow shown in the funnel is results. Results flow from the narrow end of the funnel and represent information about the progress of goals, actions, and teams. This arrow flows back toward goals, representing the impact of results on the process of defining and redefining innovation goals that continuously guide the innovation process.

    The management and execution of goals, actions, teams, and results takes place in various communities within an organization where information can be easily communicated and shared and where knowledge can be managed effectively. These communities often take the form of management groups, departments, project teams, and even individuals but can also extend beyond traditional boundaries to include suppliers, distributors, and even customers. Every organization can have many such communities and consequently many innovation funnels. Applying innovation is concerned not only with how information is structured and shared within each funnel but also with how innovation information is shared between funnels across the extended organization.

    Learning Activities

    This book is designed to help you learn the fundamentals of applying innovation. In addition to the information given, there are a number of activities in each chapter to help you apply some of the ideas presented. These activities enable you to relate the information covered in the different chapters to your own organization. Your organization can be based on a real organization, or it can be created from your imagination and experience. You are encouraged to create an innovation plan for this organization—your own detailed case study. The activities will combine into one dynamic innovation plan for this organization. There is a sample innovation plan in the Appendix to help you in the various decisions you will have to make. Your innovation plan can be created using some simple spreadsheet templates used in the book, or you may decide to build your own online knowledge management system from one of the many organizations that provide this service. Each chapter also contains questions that are designed to help you reflect on some of the main points raised in the chapter. You are encouraged to reflect on the answers to these questions as part of your learning process. Together, the activities and reflection questions provide a way for you to embed core knowledge in your memory and apply it to building and operating an innovation process.

    Intended Audience

    This book is designed for those pursuing upper-level undergraduate degrees and master's degrees in business, science, and engineering. The book is also a practical accompaniment to courses that use books dealing mainly with the theory of change and theory of innovation management. This book is also suitable for managers, team leaders, and individuals in for-profit and nonprofit organizations. The information and approach adopted by this book are relevant and applicable to all types of organizations: manufacturing, service, healthcare, public service, nongovernment, and so on. Instructors will find the book an important resource for teaching innovation-related topics such as strategic planning, performance measurement, teams and leadership, knowledge management, and project management.

    Key Terms

    Throughout this book, a number of key terms are used repeatedly. Understanding and applying a specific term can be the key to unlocking meaning and relationships between concepts. Many terms have synonyms that may be preferred in other texts. For example, the terms project and indicator are used in this book, whereas other texts may use the terms initiative and measure, respectively. Practice your understanding of the specific terms presented in Table 0.1.

    Table 0.1 Common Terms Used in This Book
    Term Used in BookBrief Explanation
    ActionExpenditure of effort
    ChangeProcess through which something becomes different
    CommunitiesGroups of individuals with a common purpose
    CustomerIndividual or organization that requires product, process, or service
    DeliverableUnit of output of an effort
    EffortVigorous or determined attempt to do something
    GoalObjective of an effort
    IdeaEffort in generating a new concept
    IndicatorsMeasurements or metrics of specific goals for an effort
    IndividualsHuman resources for an effort
    InnovateTo make changes to something established
    InnovationProcess of making changes through effort
    KnowledgeFact, information, or skills acquired through learning or experience
    LearningGaining or acquiring knowledge
    MilestonePoint or stage on a timeline where effort can be reviewed
    MissionImportant assignment
    ObjectiveStatement of desired end point for an effort
    OrganizationSystematic arrangement of individuals with a particular mission
    PortfolioGroup of projects
    ProblemIdea for existing or future failures
    ProcessSeries of actions to achieve an end
    ProductArticle or substance processed for sale
    ProjectNew initiative
    RequirementsStatements of desired functionality for an effort
    ResourcesIndividuals, teams, equipment, or money needed for an effort
    ResponsibleAssigned to lead or account for an effort
    ReviewPerformance appraisal of an individual for an effort
    ServiceAction of doing work for an individual or organization
    SkillAbility to perform an effort well
    StatementDeclared message of an objective or position in an effort
    TaskA subset of a workpackage or project
    TeamGroup of individuals or resources needed for an effort
    WorkpackageA group of tasks in one project
  • Appendices

    These appendices contain a sample innovation plan for a fictitious organization (Appendix 1) and activities for creating you own innovation plan (Appendix 2). The sample innovation plan, for SwitchIt Manufacturing, also contains a number of tasks that encourage you to expand the plan to incorporate a new design department.

    Appendix 2 contains a number of activities that provide a step-by-step guide to creating an innovation plan for your own organization. It gathers together the various activities and tables used throughout the book.

    A large number of other innovation plans for various types of organizations are available through the authors' web site ( Blank and partially completed spreadsheet tables for both appendices are also available from this site.

    Appendix 1: Sample Innovation Plan


    SwitchIt Manufacturing is an Irish manufacturing company and part of the SwitchIt Corporation in the United States. SwitchIt manufactures wall switches and light switches. Marketing is the responsibility of a sister organization based in Brussels, and design is concentrated in the United States. There are 200 employees at the Irish facility. Over the last 15 years the company has built up a mature manufacturing facility for the European and Asian markets. The company is responsible for generating a turnover of €500 million. This year the company is investing €12 million in process innovations, cost improvements, new technology, information system development, and capacity adjustments. A special budget of €1.4 million has also been allocated to establish a new design department in Ireland. The plan in this appendix outlines the status of goals and actions for development of SwitchIt in Ireland over the next 3 years.


    You have been hired by SwitchIt in Ireland to establish a design department. You have design facilities and have hired one other designer. The managing director has asked that you merge the goals and actions for your new design activity into the plan presented in this appendix. Later, after you have become established, you may create your own separate plan for design activities. SwitchIt manufactures a range of wall switches and light switches. The manufacturing facility has a range of machining and assembly stations that produce the switches in batches according to design specifications. Your role is to extend the product range at SwitchIt by initially using the existing manufacturing processes and skill sets of people involved.

    Task: Your first task is to make a portfolio of possible products produced by SwitchIt. Using an Internet search engine, view products from a similar organization. Download pictures and any other information you need. Create a product map showing all the switches in the SwitchIt catalogue.


    The initial innovation plan illustrated in this appendix was developed by a senior team chaired by the general manager. This team initially met for 1 week off-site to generate the goals of the organization. The team now meets weekly on Fridays for 1 hour to review the status of the company's goals and the status of various actions such as projects and new ideas. This meeting often focuses exclusively on exceptions (i.e., activities that are showing a “red” status signal). In addition to the members shown in Table A1.1, other members of the company are invited to attend as needed.

    Table A1.1 Individuals
    NameJob Title
    Andrew KellyIT Analyst
    Brenda MooneyHR Manager
    Danny MulryanGeneral Manager
    David NooneEngineering Manager
    Gary O'HalloranTraining Manager
    James FogartyPurchasing Manager
    John SheehanQuality Coordinator
    Mary RocheFinance Controller
    Michael ClarkManufacturing Supervisor
    Stewart O'NeillMaterials Manager

    Task: Add your name and job title and the person you hired to Table A1.1.


    The mission of SwitchIt is the “Efficient manufacture of innovatively produced switchgear solutions.” SwitchIt is focused on manufacturing switch gear at low cost, high productivity, and high quality. It is also focused on continuously improving manufacturing processes. The main contribution to operating revenue and profit is through lowering the total cost of production.

    Task: Propose a change to the mission statement that incorporates the fact that there is a new design department at SwitchIt and a new set of design activities.


    A list of manufacturing activities identified in the organization is presented in Table A1.2. The model illustrates that there are three major activities at the top level:

    • Manage SwitchIt Ireland
    • Plan and Control Manufacturing
    • Support Operations
    Table A1.2 Activities
    A0Operate SwitchIt Ireland
    A1Manage SwitchIt Ireland
    A2Plan and Control Manufacturing
    A21Plan and Control Materials
    A22Plan and Control Production
    A23Ensure and Control Quality
    A3Support Operations
    A31Provide Personnel Systems
    A32Control Accounting Systems
    A33Provide Engineering Systems
    A34Provide Information Systems

    “Manage SwitchIt Ireland” represents the activities of the senior management team in terms of both day-to-day operations and development. “Plan and Control Manufacturing” represents the main activities of producing switch gear in response to customer demand. “Support Operations” includes the activities of finance, engineering, computer services, and human resources.

    The “Plan and Control Manufacturing” activity is further divided into three subactivities:

    • Plan and Control Materials
    • Plan and Control Production
    • Ensure and Control Quality

    These three primary activities add value to customers and are the focus of much of the development in this current innovation plan. Most goals and actions detailed later focus on these three activities.

    Task: Change the activity model by adding one activity that represents your design department. Remember to use an active verb in the title of the activity. Revisit Chapter 7 to discover how to create a simple activity list.


    As part of the goal generation exercise, a number of statements were initially noted. These include statements of mission and core competencies but also of weaknesses and strengths. Table A1.3 lists a number of these statements, including their status.

    Table A1.3 Statements
    MissionEfficient manufacture of innovatively produced switch gear solutions
    CompetenciesMachinists and machining expertise….
    CompetenciesLow-tax location and ease of market access
    StrengthsGlobal organization
    StrengthsWorld-class manufacturing facility
    StrengthsSkilled workforce
    StrengthsLow employee turnover
    WeaknessesHigh insurance premium
    WeaknessesLack of interdepartment communication
    WeaknessesFrequent product returns due to quality problems
    ThreatsIncreasing manufacturing costs
    ThreatsCompetition from new low-cost entrants
    ThreatsLack of capital for new projects
    ThreatsGlobal downturn continuing
    OpportunitiesNew government design grants
    OpportunitiesE-commerce opportunities
    OpportunitiesUniversity graduates

    The principal weakness is the high rate of product returns through the warranty process due to process-related quality problems. A number of projects are under way to replace some old machines and improve operator training. One of the strengths noted at the beginning of the planning period is the plant's status as a world-class manufacturing facility. Some managers believe that this status is under threat from recent events. Increasing manufacturing costs were initially identified as a potential threat; with rising inflation this appears to be becoming a reality. Finally, one of the opportunities identified at the beginning of the planning period was the availability of university graduates. Because of a number of factors, including the high cost of living, this opportunity may be becoming a threat.

    Task: Add new statements that incorporate the views and analysis of your design department. Visit the Internet and see whether any new technologies are being developed that may offer new opportunities or if products are being developed by competitors that may constitute a threat. Remember, this is an exercise. If you cannot find potential statements through your research, make them up instead.


    Competitors currently lead with market share and are the ones to watch for new product innovations. Two organizations, GE and Philips, are watched closely for signs of new process innovations. The organization also learns much from three associations listed in Table A1.4.

    Table A1.4 Benchmarks

    Task: Add other URLs to Table A1.4, particularly for organizations you could watch for new design concepts.


    The company has a number of key stakeholders. Preliminary requirements from these stakeholders are listed in Table A1.5. One of the principal stakeholders is the parent company, which is demanding a €300,000 cost reduction in the current year. Another key group of stakeholders, customers, are requiring shorter lead times, higher quality, and higher reliability. They are also requiring greater flexibility in the event of order changes, with less red tape in changing order quantities and due dates.

    Table A1.5 Requirements

    Other stakeholders not listed include the design department in the United States and the marketing function in Brussels. The warranty department has also identified a number of requirements, particularly low reliability on some products, that must be incorporated into the plan.

    Task: Add new requirements to this list. What requirements might your parent organization have for your design activity? What new requirements might your customers have for your product portfolio?


    The strategic plan adopted by the company at the beginning of the planning period is illustrated in part in Table A1.6. The main decisions for change over the next 3 years have been divided into eight strategic thrusts (or groups): capacity, responsiveness, organization, workforce, supply chain, technology, information, and quality.

    Table A1.6 Objectives

    Task: Add new objectives to the list in A1.6 that incorporate your design department's objectives. Do you have objectives for new product development? Or perhaps improving reliability of existing products? Or perhaps lowering costs of materials and assembly of existing products?

    Table A1.7 illustrates the relationships between objectives and activities (i.e., where changes are needed in the current activity model).

    Task: Add the new objectives and new activities to Table A1.7 and show where relationships may exist.

    Table A1.7 Relationships (Objectives vs. Activities)

    The status of key performance indicators is listed in Table A1.8. “Defects per Unit” continues to be a major concern because of a high number of old machines and certain practices among a small number of employees. John Sheehan (quality coordinator) is convinced that machine age and operator training are the main causes of low quality.

    Table A1.8 Indicators

    Task: Add one or two new indicators to this table that measure the activities of your design department. Remember, this is an exercise.

    The key corporate requirement of reducing costs for the Irish operation is a main driver of the innovation plan and relates directly to the indicator of improving cost savings. This indicator is progressing well, as illustrated in the indicator chart, Figure A1.1.

    Figure A1.1 Indicator Chart

    Task: Create a new chart for one of the indicators you defined earlier.

    A strong relationship between objectives and indicators is desirable to ensure that progress can be measured and tracked. As Table A1.9 illustrates, all objectives are linked with the indicators defined.

    Table A1.9 Relationships (Objectives vs. Indicators)

    Task: Add your new objectives and new indicators to this table and show where relationships may exist.


    There are more than 230 problems on the reactive problem list, sorted according to impact, risk, and priority. Every machine and assembly station has a proactive problem list with identified tasks for avoiding the problems. Table A1.10 lists a sample of the problems.

    Table A1.10 Problems

    Task: Add some new design-related problems with existing products to this list (i.e., what are the potential problems with switches? Do they overheat? Or does the switch begin to stick after a few months? Or perhaps the cover breaks easily when installed by an electrician.). Remember, this is an exercise; use your imagination to add a few problems to the table.


    Every employee is encouraged to generate ideas that can lead to goal attainment. Employees have full access to the objectives and indicators of the organization. Ideas have been grouped by the source of the idea (e.g., goals, problems, new knowledge, benchmarks, employees, customers). Table A1.11 illustrates some sample live ideas.

    Table A1.11 Ideas

    Task: Add some new design-related ideas to this list. Do you want to create a new product? Or perhaps make major adjustments to existing ones? Or perhaps do something radical? Remember, this is an exercise; use your imagination to add a few ideas to the table.


    The top seven approved projects are listed in Tables A1.12 and A1.13. The first table shows the current progress of the projects. The “Investigate ERP System” project is waiting for new information from headquarters. The “Develop Workgroup Procedures” project is also waiting while clarification about participation from key worker representatives is sought.

    Table A1.12 Projects
    Table A1.13 Project Status

    Table A1.13 illustrates the cost–benefit analysis carried out on the current portfolio of projects. There is currently a high priority on the “Install Robotic Welding” and “Redesign Assembly Line” projects.

    Task: Add some new design-related projects to this list and try to make one of them radical. Try to make them different from the ideas you created earlier. Do you want to create a new product? Or perhaps make major adjustments to existing ones? Or perhaps do something radical? Remember, this is an exercise; use your imagination to add a few projects to the table.

    A bubble diagram illustrating the impact and risk for the current project portfolio is shown in Figure A1.2. The “Restart Sports and Social Activities” project may have a low impact on achieving our overall goals, but the risk is low, and other benefits will accrue in the medium to long term.

    Figure A1.2 Bubble Diagram

    Task: Re-create this bubble diagram with your new projects added. Remember! It's an exercise!

    The relationship between projects and objectives is illustrated in Table A1.14 in part. It highlights the fact that certain projects have a strong relationship to fulfilling the defined objectives, whereas other projects have no connection.

    Table A1.14 Relationships (Objectives vs. Projects)

    Task: Add the new objectives and new projects to this table and show where relationships may exist.

    The relationship between projects and performance indicators is illustrated in Table A1.15. All projects can be measured through the top seven indicators.

    Table A1.15 Relationships (Indicators vs. Projects)

    Task: Add the new indicators and new projects to this table and show where relationships may exist.


    Details for one of the ongoing projects in the portfolio are shown in Table A1.16. The project has a number of workpackages and associated tasks.

    Table A1.16 Project Workpackages

    Task: Create a simple list of tasks for one of the radical projects you defined earlier. Try to make the tasks and schedule realistic. Consider market analysis, collaboration with others, patenting, securing venture capital, testing the product in the marketplace, and prototyping.


    The skills or training programs adopted by the team are illustrated in Table A1.17. One new skill has been added this year—“Delegating to Others”—and a customized course for this is being developed by a subcontractor.

    Table A1.17 Training Programs
    PersonalManaging time
    PersonalNegotiating skills
    PersonalCommunication and presentation
    PersonalProject management
    InterpersonalManaging conflict
    ManagementInnovation management
    InterpersonalCoaching, mentoring, and motivating
    InterpersonalDelegating to others
    InterpersonalRecognizing others and rewarding
    ManagementHandling pressure and stress management
    ManagementMonitoring performance

    Task: Add a number of skills directly related to the design activity to this list. Visit the Internet and see what courses or learning programs are available to give your team new skills.

    The relationship between skills and individuals on the team is illustrated in Table A1.18. The dark-shaded cells indicate courses completed and skills acquired by individuals. The light-shaded cells indicate that a course is planned.

    Table A1.18 Relationships (Individuals vs. Skills)

    Task: Add the new individuals and new skills to this table and show where relationships may exist.

    Appendix 2: Innovation Activities

    Applying innovation is a difficult task. The activities suggested here are designed to allow you to develop your own innovation plan for a fictional organization and to struggle with some of the same decisions that an innovation team encounters when managing the innovation process. You can undertake these activities on your own or in a small group. The output of this set of activities is an innovation plan for your own organization—your own case study. For the purpose of these activities, a number of tables are suggested as a means of recording information; you can add fields to these tables or create your own tables as plan requirements demand. All tables are shown at the end of this appendix.

    Activity 1

    In this activity you will create some simple pieces of information for your chosen organization. Examples of organizations include hospitals, manufacturing plants, cinemas, software design houses, and even local government agencies. The organization you establish will need to be large. Search online for a real organization that is similar to the organization you are considering developing. Make a note of its homepage address. Research this real organization's innovation effort to discover the goals it pursues, the products and services it has developed for the market, who its competitors are, and what competencies give it competitive advantage. Choose a fictitious name for your organization and decide what products or services you are providing and what markets you are serving. Next, choose a name for your innovation plan that also includes a planning period (typically 1–5 years), such as “Company X Innovation Plan (2007–2010).” Create a simple statement of 5 to 12 words that describes what the current mission of your organization is. Record this information in Table A2.1.

    Table A2.1 Create an Organization
    Activity 2

    Record the names and positions in the organizational structure of the key people engaged in innovation in your organization in Table A2.2. These people will be given various responsibilities for the development and implementation of the plan. Choose names and job titles that are credible and realistic.

    Table A2.2 Innovation Team
    Activity 3

    Create a list of real competitor organizations that operate in the same sector as your organization. Go online now and identify three to five suitable organizations that you will compete against for market share and survival. Record this information in Table A2.3. As in reality, analysis of these competitor organizations can act as a stimulus for generating ideas for new products, processes, or services or simply provide interesting insights into the way they manage innovation. You may also decide to open a research file on each competitor, to analyze their performance, and track their innovation developments relative to your organization. Now that you have made a start at defining your organization, you need to understand the external macroeconomic and microeconomic pressures acting on the organization.

    Table A2.3 Benchmarks
    Activity 4

    Undertake an environmental analysis of the organization using models such as stakeholder analysis, SWOT, PEST, and Porter's 5 Forces. Concisely define your findings in a format similar to Table A2.4.

    Table A2.4 Statements
    Core Value
    Core Value
    Group: Label of the statement (e.g., “Strengths,” “Weaknesses”)
    Title: The statement in less than 12 words
    Status: Status of the requirement (e.g., “Not Started,” “In Progress,” “Waiting,” “Completed”)
    Activity 5

    Define the various stakeholder requirements being placed on the organization (e.g., customers, corporations, government, and internal success factors). Record these requirements in Table A2.5. In addition, based on your understanding of your organization's situation in its current and future environment and the products or services it is producing, define a concise vision statement (less than 20 words) for the next 3 to 5 years. Record this in Table A2.4. This vision will guide subsequent strategies and performance metrics together with associated innovative actions that the organization will engage in over this period.

    Table A2.5 Requirements

    Now that your organization has a defined vision statement of where it wants to progress over the defined time period of your plan, you need to define the high-level strategic objectives and performance metrics that will help guide the organization's journey.

    Activity 6

    Create a list of twelve or more strategic objectives for your organization, divided into broad strategic thrusts. First, define a minimum of three strategic thrusts, based on the environmental analysis, requirements, and statements you defined in the last several activities. Once you have created appropriate strategic thrusts, define at least two strategic objectives for each. When articulating your objectives, try to keep the number of words to a minimum. Try to define strategic objectives that are general enough to remain relevant for the entire planning period (e.g., 3 years). Avoid strategic objectives that can be achieved in 6 months or less; these may more accurately be defined as projects later. Once you have defined your strategic objectives, assign responsibility for their achievement to one or more members of the organization. Record this information in Table A2.6.

    Table A2.6 Objectives
    Activity 7

    Create a list of performance indicators for your organization for the calendar year. Select these indicators as measures of the requirements and strategic objectives you have defined for your organization. Specify the origin or start value of the indicator for the start month (e.g., January = 60%) and the target value for the end month (e.g., December = 85%). Each requirement or strategic objective can have one or more indicators, and similarly any specific performance indicator can be linked to the achievement of one or more requirements or objectives. When defining the specific indicator, record the associated origin and target values for that indicator. Try to use an active verb in the title of the indicator (e.g., “Increase,” “Decrease,” “Maintain”). Also assign responsibility for its achievement to a person in the organization. Record this information in Table A2.7. You should also create one or two sample charts for the indicators you have defined.

    Table A2.7 Indicators

    By this time, your organization should have an integrated set of goals that will encourage and direct the innovative actions that the organization will engage in over the defined planning period.

    Activity 8

    Create a list of about 10 fictitious ideas or solutions to problems for your organization. These creative concepts can come from your environmental analysis, goal definition, benchmarking, or creative capabilities. Some of these ideas may be translated later into projects. Group the creative concepts according to whether they began as a problem or from new knowledge, stakeholder requirements, or other stimuli. Once you have recorded these ideas, assess the suitability of the concepts by scoring their impact and risk on a scale of 1 to 5. Based on this analysis, rank the priority of the ideas using a 1 to 5 scale. Keep the number of words to a minimum. Record this information in Tables A2.8a and A2.8b.

    Table A2.8a Problems
    Table A2.8b Ideas
    Activity 9

    Over the planning period, some of the problems and ideas investigated and developed will be approved to be implemented as projects. Make a list of ongoing projects to create change in your organization. Record relevant data for each project, such as planned start and end date, project leader, estimated cost, expected return, priority or urgency, and status at that particular time (e.g., “Draft,” “Awaiting approval,” “On schedule,” “Not started yet,” “Out of control”). Ensure that there are at least seven projects in your portfolio list. This portfolio can be recorded in Table A2.9. Examine the portfolio spread by creating a bubble diagram.

    Table A2.9 Projects
    Activity 10

    Create details for one or two of the projects in your portfolio. Focus on creating a list of workpackages and tasks for each project, together with a set of suitable milestones. In addition to choosing the project leader, define the support team that will facilitate the implementation of the particular project. Create a Gantt chart for the implementation of this project. Record the information in Table A2.10.

    Table A2.10 Project Details
    Activity 11

    Create a list of skills that the people on your organizational chart possesses that enable them to contribute to the development of innovation actions or that they should possess and record it in Table A2.11.

    Table A2.11 Skills
    Group: Label of the skill (e.g., “Technical,” “Personal,” “Interpersonal”)
    Title: The skill or course in less than 12 words
    Activity 12

    Choose one or two individuals from your innovation team and fill out a review form (Table A2.12) for their expected personal goals over the coming year.

    Table A2.12 Review Form
    Activity 13

    Create a number of relationship diagrams for your innovation plan (e.g., objectives vs. projects, indicators vs. projects, skills vs. individuals). When you have completed these diagrams, revisit each activity and check for accuracy and consistency. Use Table A2.13.

    Table A2.13 Relationship Matrix
    Activity 14

    You now have defined the central elements of your organization's innovation plan. Compile this plan into a document for the senior management team of your organization. Annotate each of the tables you have created with text that describes progress to date, suitability of the portfolio of actions relative to your desired goals, and so on. Discuss the risks in your current plan and make recommendations for any changes that the innovation team will implement. Consider what new tables you want to create. What new fields or columns would you like to create, and what new relationships would be useful to create?

    Figure A2.1 Simplified Planning Tool


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    About the Authors

    David O'Sullivan, PhD, is a senior academic and researcher at the National University of Ireland, Galway. He is also director of research; he and his team study the application of computer technology to the management of innovation in organizations. David also works with multinational and small to medium-sized enterprises on various aspects of learning and research into innovation management. Before joining NUI Galway he was a product design engineer and later a system design engineer with a number of multinational corporations. Details of his work can be found on his Web site,

    Lawrence Dooley, PhD, is a college lecturer in enterprise and innovation in the Department of Management and Marketing, University College Cork, Ireland. His research interests focus on the management of organizational innovation and related issues of interenterprise collaboration and university–industry knowledge exchange.

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