Innovation audit is an essential first step for any organization that wants to adapt innovation as part of its strategy.
Innovation audits are an examination of current innovation practices. Such an understanding allows the management team to have alternative and additional measures and techniques to increase and maximize their innovation capabilities.
Many models and frameworks are available including the Innovation Diamond, the Mckinsey 7 S Model, the InnoSurvey® innovation capability measurement, as presented in innovation 360 degree framework and many others.
In this part we will provide a quick overview about the IEEE Innovation Capability Audit developed by Vittorio Chiesa (Chiesa, 1998) which focuses on whether the individual processes necessary for innovation are in place and the degree to which best practices are used and implemented effectively. It implies assessment (either self or external) of the practices used through comparison with known best practice.
Understanding the Technical Capability Innovation Audit Pillars
- Concept Generation: identification of new product concepts.
- Product Development: taking the innovation from concept, through development and transfer to manufacturing and use.
- Process Innovation: the development of innovation in manufacturing processes.
- The development and management: including technology acquisition and/or development.
- Resources: the development of human and financial resources.
- Systems and tools: the effective use of appropriate systems and tools needed for innovation.
- Leadership: providing the top management leadership and directions.
Practices adopted to manage the innovation are reviewed to assess
- The degree to which there is appropriate business process in place.
- The deployment of good practice – the breadth of its use.
- The degree to which each practice meets known best standard.
The model covers four main processes; the identification of new product concept generation, taking innovation from concept to launch product, the development of innovation in production process and the development and management of the needed technology per technology acquisition and development. Two processes to be done in parallel, process audit and performance audit.
The objective of the audit is to provide companies with an overview of their strengths and weaknesses with regards to technical innovation management, enabling companies to highlight the areas that they should examine in more depth. The model sets out the scope of what is to be audited.
A set of detailed questions around this model is to be developed to determine whether good practice is adopted and the process for its use.
The model should view innovation as a business process. The model is to address the managerial processes and organization mechanisms through which innovation is performed.
For each pillar we have a set of processes and concepts to be checked:
- Concept Generation:
- How new product concepts are identified, validated and selected.
- Product Development:
- How innovation is taken from concept, to development, transferred to productization and reaches commercialization.
- Process Innovation:
- How innovation is implemented into manufacturing process.
- Technology Acquisition:
- How technology is managed, acquired and developed.
- How human and financial resources are allocated and deployed.
- Systems and Tools:
- How systems, tools and methods are properly deployed and used.
- What is the leadership support and sponsorship.
- How leadership provides directions and support.
- Market Focus and Open Innovation:
- How you are interacting with external stakeholders in the different stages and pillar.
- For which degree you are integrating with your customers, suppliers and partners.
- How you are applying and engaging in open innovation from ideation to commercialization stages.
- How you measure the market impact generated from the innovation activities.
- What is the innovation economical impact from sales, profile and market share perspective.
- How innovation is supporting the overall organization competitive positioning.
There are many debates about the effectiveness and accuracy of enterprise technical innovation capability audits. Based on a personal practical experience. I can confirm that such type of audits are very useful for enterprises in different maturity stages to be able to understand the current status quo. By understanding the status quo through a structured framework and methods, innovation professionals are capable to strategize and implement suitable strategies and initiatives to better manager and foster the enterprise innovation capabilities.