If you are going to improve innovation then an accurate current assessment of your innovation capacity is essential.
An innovation audit looks across your organisation to see what is working well and what is holding back innovation. It starts with analytical questions such as:
- How many new products/services did you launch last year and how does this compare with your plan?
- How long does it take an idea to go from initial approval to full implementation?
- What proportion of your turnover comes from products/services launched in the last two years?
- How effective is your idea generation program? How many ideas are you generating?
- How ‘healthy’ is your new product pipeline? What is the forecast value of developments in the pipeline?
- How many ideas per employee are submitted and how many were approved?
- What resources in terms of people and money are you allocating to innovation?
In addition to these analytical questions the audit should examine softer issues. In depth interviews with a sample of people from different departments and levels will give you insights into your culture. Typical discussion points should centre around such questions as:
- To what extent are people empowered to try out new ideas?
- Do you recognise and reward risk taking?
- Do you blame people for failure when initiatives do not succeed?
- Can people challenge the decisions of the boss?
- Are you complacent or entrepreneurial?
- Do you proactively look outside for ideas?
- Do departments openly collaborate on projects?
- What is stopping you from implementing more ideas quickly?
The audit should also examine the idea approval process. How many hurdles does a proposal have to clear to get approved? How many people are involved? Flow diagrams of the theoretical and real approval processes need to be created and examined. Does the approval process work? Can small ideas progress rapidly or do they have to go through the same approvals as major initiatives? etc.
A good audit will identify key areas for improvement in both culture and the innovation processes.
