I focused on the innovation imperative in Part 1 and how digitization is driving a new pace of change.  Established organizations need to embed innovation as a core competency and they need to do it quickly.  But how do you get started?

Fostering an Innovation Culture

Before embarking on building a culture of innovation within an organization or re-energizing an existing program, it's worth paying attention to a few simple but tough questions to lay the foundations for success.

What is the leadership appetite for innovation?It's critically important that the senior leadership within any organization buys in to the need for innovation and its importance. But not just at a superficial level. It must be done in a way that avoids a mismatch between what the leadership says about innovation and what it actually does about innovation. It's about championing it in a visible way-getting involved and demonstrating commitment. Without this in place, any innovation program is unlikely to get far off the ground. Innovation culture has to be led top down within an organization.

What is the definition of innovation?It's important to have a good handle on this so that everyone understands what it means and what's expected to pull in the same direction. It helps to define the aiming points for innovation and how they align to organizational strategy. Given that innovation also spans a wide spectrum, it's useful over time to adopt a balanced innovation portfolio that provides a structure for managing current performance while maximizing opportunities for growth.

What does success look like?Knowing what needs to be achieved and what success looks like for everyone involved is important. That invariably involves laying out some Key Performance Indicators (KPI's) and measuring performance along the way. Identifying this will help frame the innovation strategy and how it will be measured. In turn, this helps shape behavior.

Building an Innovation Capability

The notion that innovation is often about game-changing ideas that emanate out of chaos from a small number of isolated geniuses is misguided. In established organizations, innovation benefits from structure and some order to ensure it doesn't become a meaningless distraction. Consider using a practical framework like the one used at Cisco to help leadership teams with the job of innovation. It's based on an approach that melds together leadership and strategy, people and culture, and process and tools.

Innovation Tools and Best Practices

There are plenty of tools and best practices out there to support the many roles and people involved in enabling the end-to-end innovation process. Some of these will be the subject of future blog posts but in summary they include ways, for example, to capture insights, generate ideas, manage incubation, train and develop, increase collaboration, reward and recognize people, use different processes and methodologies, manage communication, and facilitate change.

Innovation is Key to Survival

Remembering that there's no single way for established organizations to innovate, many ecosystems will also find room for formal R&D, mergers and acquisitions (M&A), co-creation with customers, open source development, or teams dedicated to working with the start-up community. All are important and collectively contribute to all-round innovation capability.

Underpinning everything and to make all approaches possible is the need to build a long term, everyday, everywhere culture of innovation that drives results. It's the foundation, and the ability of organizations to do this with agility will be key to their survival in this fast-moving era of digitization.

There are those that will inevitably join the ranks of Blockbuster and Kodak but then there are those that will set the agenda and lead from the front. It is these organizations that will successfully manage the job of innovating to survive in the new digital economy.

Will you disrupt or be disrupted? There can only really be one option.