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Humans inherently connect to each other in an indigenous context, generate knowledge, and develop a product to be disseminated by way of commerce.  Traditionally, Global Innovation practice has seen assembling of people with vital capabilities and essential knowledge via co-location. 

Co-location is the gathering of Innovation specialists into a handful of Innovation centers, domestically and in prime markets.  The innovative products and/or services created by them are then dispersed to markets throughout the globe.

However, as the array of knowledge required for Global Innovation becomes extensive and diverse, co-location has become inadequate.  Today’s dynamic and shrinking world necessitates taking an expanded approach to Innovation Management.

Most of the organizations have not been able to sufficiently internationalize their Innovation Strategies to make use of the multifaceted knowledge scattered world-wide; knowledge necessary for present-day products and services.

Cause of failure is the generally accepted but perceived trade-offs listed below.  The challenge is to surmount these trade-offs, which research has shown is possible. 

  1. Approval vs. Disapproval
  2. Autonomy vs. Control
  3. Capability vs. Motivation
  4. Attraction vs. Interest
  5. Achievement vs. Potential 

 

Most companies leverage their international networks just to engage in mundane tasks, and are unable to make use of opportunities for Global Innovation to gain Competitive Advantage.

Let us go into some detail of these tradeoffs. 

Approval vs. Disapproval

When pitched generally, the idea of taking Innovation to the global level is agreed to by everyone across the organization.  When the task is directed towards a specific entity or specifics of it are assigned, Disapproval ensues.

Autonomy vs. Control

This is the trade-off between granting local autonomy vs. losing centralized control over the Innovation process.  Reason for such interpretation is the inability to consider knowledge and power separately. 

Capability vs. Motivation

A singularity exists where companies with elevated Innovation Capability exhaust their enthusiasm for Global Innovation.

Attraction vs. Interest

Taking Innovation to the global scale often necessitates partnerships.  Such partnerships typically present the predicament that the more desirable the probable partner appears, the less those feelings are reciprocated. 

Achievement vs. Potential

There is a trade-off between the over-emphasis on historical achievements vs. the potential for future achievements, as over-reliance on what has worked in the past will hinder Creativity required for a new environment.

Effective Global Innovation of products and services has the hallmark of unrestricted reciprocity of unstated knowledge between people scattered around the world.  Such an evolution can be achieved by optimizing 3 diverse aspects of Innovation, generally simultaneously.

The 3-prong approach to Global Innovation Strategy that overcomes the Global Innovation trade-off of Knowledge Complexity vs. Global Dispersion comprises of:

  1. Compact & Agile Innovation Footprint
  2. Capabilities & Structures for Communication
  3. Internal & External Collaboration

Universal principles of Global Innovation Strategy keep evolving for making each of these attributes work, based on the experience of numerous entities.

Let us delve a little deeper into the 3 principles.

Compact & Agile Innovation Footprint

This relates to the quantity of tangible sites in an Innovation network.  Only that number of physical sites should be included in an Innovation network which are able to add exclusive and discerned knowledge. 

Capabilities & Structures for Communication

This aspect has to do with overcoming the challenge of distance, time, and culture when taking Innovation to the global level.

Communication is a momentous challenge when there is distance, time, and culture difference.   Developing a culture of open knowledge-sharing is vital for taking Innovation to a global scale.

Internal & External Collaboration

This aspect looks at collaboration protocols for co-located sites versus globally dispersed collaboration.

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To be competitive and sustain growth, we need to constantly develop new products, services, processes, technologies, and business models.  In other words, we need to constantly innovate.

Ironically, the more we grow, the harder it becomes to innovate.  Large organizations tend to be far better executors than they are innovators.  To effectively manage the Innovation process, we need to master both the art and science of Innovation.  Only then can we leverage Innovation as a Competitive Advantage, instead of viewing Innovation as a potential disruptive threat.

Learn about our Innovation Management Best Practice Frameworks here.

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– Roderick Cameron, Founding Partner at SGFE Ltd

9125672052?profile=RESIZE_400xManagement is not a function nor a blend of functions.  It is a practice best understood by means of experience that are set in context.

All levels of education divide subject matter into definite categories, according to the means of creation of that knowledge, not by the manner in which it is used.  This is true for Management Education as well.

Management Education being imparted in educational institutions, although essential, is missing a tremendous chance of creative learning for practicing managers that may empower them to engage in Innovation Management, by teaching subject matter in compartmentalized form.

For effective management, knowledge is essential but wisdom is key—the capacity to combine knowledge from different sources and use it judiciously.

Art combined with science through craft is what management is all about—coping with issues in their highest complexity of living, not as arranged compendia.

An alternative approach to Management Education has been developed that:

  • Integrates Management Education with management development.
  • Employs extremely noteworthy innovations in Management Education and development.

This approach has helped leading business schools revamp the whole process of disseminating Management Education.  The approach encompasses the following 7 principles:

  1. The criteria for selection of candidates should include practicing managers with demonstrated job performance.
  2. Education and practice of management should be parallel and cohesive.
  3. Management Education must draw from life and experience.
  4. Contemplative thinking should be fundamental to learning.
  5. Organizational Development should be a corollary of management development.
  6. Management Education should be a continuous learning process.
  7. Each facet of education must enable learning.

Slide-Deck-Image-Principles-of-Management-Education.png?profile=RESIZE_710x

The application of above principles assists in simultaneous development of managers and organizations.

Let us delve a little deeper into some of the principles encompassed in this approach.

The criteria for selection of candidates should include practicing managers with demonstrated job performance. 

The practice of management can be improved in a classroom, but it did not originate from there.  Merely classroom study cannot produce good managers.  Current Management Education programs rely on the candidate presenting themselves for selection, then choosing from the pool of candidates and setting them on a path for Leadership Development.

Transforming classrooms into vibrant learning platforms requires selecting learners on the basis of managerial experience.  Intelligence is a good basis for selection but verified job-performance is a far more realistic and suitable indicator for participant selection, particularly when the aim is to groom great future leaders.

Education and practice of management should be parallel and cohesive.

It is not logical to select participants on the basis of their practice and improve their skill while keeping them removed from that practice.  Keeping managers on the job enables education and experience to be intertwined making both environments richer.

Continuing both education and practice does create tension but such tension is inherent in management practice therefore encountering it is more beneficial than sidestepping it.

Management Education must draw from life and experience.

Presently, the learning agenda is controlled almost entirely by instructors in the class room resulting in much teaching and little learning.

Formalized knowledge—ideas, concepts, research—should meet the need that the managers bring to the classroom and reverberate with the participant’s wide-ranging but tacit knowledge.

A process of infusion rather than intrusion is required to galvanize the faculty’s educational push and the participants’ learning pull.

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“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

8760904287?profile=RESIZE_400xThe concept of Return on Investment (ROI) was formed as part of the concept of Value Creation.  The origins of ROI were in the Manufacturing sector, where it’s simple to measure time and output.  Next, to adopt the concept was the Banking industry where intense competition necessitated Innovation Management and with that the need to calculate ROI.  ROI calculation is now a common feature in every industry and business function.

Employee Training is part and parcel of workforce development.  It necessitates spending a lot of effort and resources.  Deliberating if the Training Program is going to be worth all the costs is a valid concern.

Return on Training Investment (ROTI) is the comparison between financial benefits obtained from a training program and the total cost of running that training program.  The objective of ROTI analysis is to see whether the benefits outweigh the costs i.e., to establish if the investment was worthwhile.

ROTI calculation and analysis is significant when:

  • Investment in a training program is viewed as a substantial outlay.
  • Attainment of explicit strategic or operational objectives is associated with the training program.
  • Financial benefits and their amount from the training program is ambiguous.

ROTI can be calculated dependably so long as:

  • Measurement data on changes in business performance, pertinent to training, is reliable or can be rationally estimated by those who matter.
  • Financial values can be assigned to the applicable performance measures.
  • Cost related to developing, delivering, and handling the training program can be classified.

ROTI calculation involves selecting performance measures, gathering data on those measures as well as data on costs—both direct and indirect—related to training, and lastly calculating the Return On Training Investments.

Key steps in the ROTI calculation are:

  1. Choose the performance measures to use.
  2. Gather data on changes.
  3. Gather data on costs.
  4. Calculate ROTI.

There are 3 types of calculations that are relevant in ROTI analysis.

  1. ROTI as a percentage
  2. Benefit to Cost Ratio (BCR)
  3. Payback Period

Let us delve a little deeper into the calculation methods.

1. ROTI as a percentage

This calculation shows Net Training Benefits as a percentage of Training Cost.  An outcome of 100% or more denotes that the Program has a Net Benefit after accounting for all the costs connected with running the program.

2. Benefit : Cost Ratio (BCR)

This ratio divides Total Training Benefits by Total Training Costs.  When BCR is greater than 1, the benefits exceed the costs and the program is judged a success.  When BCR is less than 1, the costs surpass the benefits and signify that enhancements or alterations are needed to warrant the continuation of the program.

3. Payback Period

This calculation exhibits the time in which the Training Investment will be paid back i.e., when the costs equal the benefits.  The calculation is usually done in terms of months.

Monthly Training Benefits are calculated by dividing Total Training Benefits over 12 months.

It is pertinent to note that although ROTI analysis is important in evaluating a training program, merely a ROTI calculation will not typically be adequate to make the business case for a Training Program or influence top management to act.  Sometimes we have to consider non-monetary benefits of training, such as a change in attitude.  When monetary and non-monetary benefits are combined, these supplement Performance Management resulting in benefits such as reduced absenteeism, lower turnover rates, and more promotions from within.

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The purpose of Human Resources (HR) is to ensure our organization achieves success through our people.  Without the right people in place—at all levels of the organization—we will never be able to execute our Strategy effectively.

This begs the question: Does your organization view HR as a support function or a strategic one?  Research shows leading organizations leverage HR as a strategic function, one that both supports and drives the organization’s Strategy.  In fact, having strong HRM capabilities is a source of Competitive Advantage.

This has never been more true than right now in the Digital Age, as organizations must compete for specialized talent to drive forward their Digital Transformation Strategies.  Beyond just hiring and selection, HR also plays the critical role in retaining talent—by keeping people engaged, motivated, and happy.

Learn about our Human Resource Management (HRM) Best Practice Frameworks here.

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You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

COVID-19 is shaping a “New Normal”—a Low Touch Economy that requires a strategic response.pic 1 Strategy Development Responding to COVID 19

The world is changing. Forced isolation and social distancing restrictions have been put into place with the advent of the COVID-19 health crisis. This is not expected to end soon but is expected to have a lasting effect on the world. In fact, a new generation of consumer behaviors is already being shaped.

The new world will not be better off or worse. It will be different. During this period of influx, some businesses will thrive in this change and reach accelerated success, while others will struggle to find their footing in all of the chaos. The Low Touch Economy is here.

The New Normal

The post-COVID-19 era will have an economy shaped by new habits and regulations based on reduced close contact interaction, tighter travel, and hygiene restrictions. While managing the current health crisis is the first priority, companies must start adapting its strategic response to the mid and long-term ripple effects of COVID-19.

Businesses, to survive, must learn how to effectively respond to COVID-19 that is marked with plenty of ups and downs and economic uncertainty. There will be fundamental shifts that are here to stay and there will be industries that will be turned upside down. Until there is a vaccine or herd immunity, the base case scenario will be continuous up and down of disruptions for the coming 2 years. Strategy Development now calls for business to make the right strategic approach.

The 3-phase Approach to Strategic Planning

During turbulent times, businesses must have the agility to switch from defense to offense. Taking the 3-phase approach to Strategic Planning will prepare organizations for the Low Touch Economy.

Phase 1: Protect

The first phase is focused on acting now to protect and run the business today. It is basically responding to the crisis and protecting the business. The primary objective of Phase 1 is to ensure the continuity and stability of the business despite the ongoing crisis.
This is best undertaken when employees and customers are grappling with one basic emotion and that is fear. The organization is faced with a declining revenue with prospects of liquidity freeze. Unfortunately, time horizons at this phase also remain uncertain.

When these scenarios are happening, the organization must strive to undertake strategies that will both protect the business, as well as ensure its continuity and stability. One strategy that must be undertaken is to put the safety of employees and customers first. With the advent of COVID-19, this is considered the most urgent thing to do and the most important. Once this has been taken care of, senior leaders can set up a war room where they can tackle immediate challenges.

The war room discussions must shift from just being reactive to being proactive when it comes to crisis management. At this point, model scenarios that are developed must be more aggressive than any of the team can think of. It has to be aggressive in the sense that it is capable of protecting the business from the disruption that COVID-19 is greatly inflicting on the organization.

At this time, during this phase, this is the best time too to invest in Innovation Management and R&D. While others are stalling, the most innovative companies spend more on R&D during the recession. The other 2 phases are Recover and Grow. Phase 2, Recover is focused on accelerating through the recovery and Phase 3, Grow is focused on achieving growth in the Low Touch Economy.

In what phase is your organization now? Are you Protecting? Recovering? or Growing?

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Organizations today are spending money on the latest technologies and working hard to solve problems as they arise. Yet, sad to say, this is simply not enough.

Today, to get on top of today’s fiercely competitive business environment, organizations need to take a strategic move: Develop an Innovation Mindset. What is an Innovation Mindset? What does it take to develop an Innovation Mindset? Often, this can be mindboggling as we get confused as to understanding what is an Innovation Mindset. Developing an Innovation Mindset is never the mere act or intent of investing in technology. It goes beyond spending money on the latest technology.

Developing an Innovation Mindset is to undergo the transformation from an innovation-averse to a forward-thinking organization.

Understanding an Innovation Mindset: What It Takes to Develop One

Developing an Innovation Mindset requires scaling innovations repeatedly and making it grow as fast as others. Companies need to depart from adopting technologies as point solutions to evolving future systems. This can be achieved by cultivating the mindset and methods of the top 10%.

The top 10% are the Leaders in Innovation Management that are already enjoying a considerable head start and are not standing still. The systems they have put in place are specifically designed to not only accommodate innovations but also scale them across the enterprise.

Developing an Innovation Mindset Starts with the Right Tools

To foster than Innovation Mindset, we need to put in place 5 key principles.

These 5 principles can provide organizations the foundation on developing Innovation Mindsets.  There first 2 are defined as:

  1. Adopt technologies that make the organization fast and flexible. Consumers now demand that companies are fast and flexible. The market is getting impatient when there are delays and so structured that it ceases to be an organization with a Customer-centric Design. Principle 1 focuses on making organizations fast and flexible. Achieving this call for efficient use of decoupling data, infrastructure, and applications to achieve greater flexibility and a faster-moving IT culture.
  1. Get grounded in cloud computing. This principle is focused on catalyzing innovation. Adopting this principle will enable organizations to maximize the use of the cloud to successfully utilize other technologies, including Artificial Intelligence and analytics.

There are 3 other principles that organizations must take notice of and focus on. The other 3 principles are recognizing data as being both an asset and a liability, managing technology investments well across the enterprise, and finding creative ways to nurture talent.
Integrating these principles in the organization’s journey towards Digital Transformation will promote the development of an Innovation Mindset. When this happens, we can expect our organization to keep up with the pace and catch up.

What Does It Take to Have an Innovation Mindset

Developing an Innovation Mindset has led leaders to take command and be in-charge of market demands. Leaders are adopting DevOps, automation, and continuous integration/continuous deployment at a faster rate than Laggards. Let us take a look at a Travel Industry disruptor. The company migrated its platform to microservice as part of decoupling initiatives.

As a result of taking this initiative, rapid response to change was achieved. This also enhanced its capability to add new features as the company experiences explosive growth.

Let us take a look at a more internationally recognized company: Ant Financial (formerly known as Alipay), the Alibaba Group’s financial arm. The organization embedded cloud services and AI across multiple processes and product lines. Furthermore, AI capabilities were offered to external ecosystem partners.

Today, Ant Financial can instantly assess the credit risks of underserved people who may not have bank accounts and even target them with loan offers. The overall cost was reduced by 50% and the company experienced a 10-fold increase in daily visitors.

Developing an Innovation Mindset is key.

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Today’s C-suite is making a significant investment in new technologies.  Yet, it is failing to achieve full value. Technologies are being deployed in pockets or silos pic 1 Innovation Leadership Mindsetwithout a Strategy for scaling the Innovation from these technologies across the enterprise. Unable to scale their Innovation, organizations are not realizing the full benefits of their technology investments.

An Innovation Achievement Gap exists. What is the Innovation Achievement Gap? This is the difference between potential and realized value from technology investments. When new technology does not achieve its full value, the Innovation Achievement Gap exists.

What Companies are Facing Today

The enormous challenge of Innovation Management with legacy systems is facing companies today.  The conventional IT stack is not built or designed for the world of tomorrow. These are our software applications, data, hardware, telecommunications, facilities, and data centers.  Today’s cloud-oriented world is full of analytics.  There are sensors, mobile computing, AI, the Internet of Things (IoT), and billions of devices. Digital Transformation is changing the face ob business.

True, companies have started in the cloud. But the systems have not been adopted at the pace of technological change.  As a result, there are distinct Leaders and Laggards when it comes to the adoption and penetration of technologies. Leaders are seeing more than 2X the revenue growth of Laggards. Laggards, on the other hand, often adopt technologies as individual point solutions without a strategy for enabling systems than can achieve enterprise-wide, game-changing innovation. While they might have pockets of brilliance, Laggards cannot maximize the value achieved. To be a Leader is to have an Innovation Leadership Mindset.

Simply said, adopting technologies does not guarantee success. This requires a systematic and sequential strategy in line with Next-gen Enterprise Systems. This needs an Innovation Leadership Mindset.

Doing Things Differently: The Innovation Leadership Mindset

Leaders differ much from Laggards. Embedded within their whole being is the Innovation Leadership Mindset.

Having an Innovation Leadership Mindset is clicking the future into place. There are 4 core pillars of the Innovation Leadership Mindset.  Let’s define the first 2:

  1. Invest in innovation. Leaders invest more in innovation. Organizations with Innovation Leadership Mindset direct a greater percentage of its IT budget toward innovation.  They accelerate investment innovation over the next 5 years. Leaders are far advanced from Laggards when it comes to investing in innovations. Leaders invest 93% on innovation and are expected to increase this to 97% in the next 5 years. On the other hand, laggards invest only 64% on innovation with a planned investment of 74% in the next 5 years.
  1. Develop Innovation Systems. Leaders show a consistently higher rate of technology adoption.  Organizations with Innovation Leadership Mindset adopt new technologies earlier and develop higher levels of expertise. They prioritize and sequence implementation in optimal ways. Leaders have been found to adopt a fundamental general-purpose technology at a rate of 98%. An example of this is Artificial Intelligence. Laggards, on the other hand, have faith in a fast follower approach. They take technology haphazardly leading to patchwork across the organization.

There are 2 other core pillars that are equally important. One is Scale Technology Innovation and the other is Evolve Next-gen Enterprise Systems.  Leaders that set their sights on innovating at scale target 3 times more business processes with technologies. Leaders have also drummed up their resources towards building the Next-gen Enterprise Systems.

Next-gen Enterprise Systems are systems that are capable of repeatable and scalable innovations. It is Boundaryless, Adaptable, and Radically Human. Outpacing others calls for organizations to start envisioning their own version of Boundaryless, Adaptable, and Radically Human Next-gen Enterprise Systems.

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Over the last decade, companies have made greater strides in retooling their innovation intelligent innovation1engines. Leaner and faster, products are developed from concept and delivered to customers in record time. But even a Ferrari does not know where to drive.

There are plenty of opportunities to enhance execution. Yet, inspiration and insights are increasingly getting to be a challenge for innovation executives. Innovation executives know that a new approach is needed. To boost performance to the next level, executives need to simultaneously loosen and tighten approaches to innovation management. We must start looking outward and opening ourselves to customers, collaborators, and our own creative side. At the same time, we need to tighten it through continuous improvement by attempting to embed an innovation culture to the organization.

Intelligent Innovation is considered a comprehensive approach that can support the next phase of Innovation Performance Improvement. The practice of Intelligent Innovation must complement the strengths of the current control regime to achieve innovative excellence.

Why Intelligent Innovation

Innovation Performance Improvement has been driven by initiatives that are highly analytical, inward-looking, and focused largely on retooling the innovation engine. There are 3 Stages of Performance Improvement. First is Management Control where innovation was treated like any other process and controlled with traditional management techniques. The second is Cost Control where innovation is redesigned to minimize cost. And the third is Profit Control where innovation was managed as projects with each project needing to be profitable in its own right.

Each successive stage built on the previous one. These stages are called “control regimes.” While these have built a critical foundation for future progress, they cannot deliver the desired results on their own.

To boost performance to the next level, Intelligent Innovation must be put in place. Intelligent Innovation completes the 4 Stages of Innovation Performance Improvement.

Intelligent Innovation and its 4 Dimensions

Intelligent Innovation cuts across 4 critical dimensions. It complements the strengths of the current control regime with excellence in 4 dimensions.

1st Dimension: Customer Insight
Customer Insight is considered the most important performance improvement level. It improves customer understanding with regards the evolving needs and critical priorities of customers. It can also increase customer participation in the innovation process.

Understanding what the customers want is important to drive ideation and execution.

According to Henry Ford, “If I’d only listened to customers, I’d have developed faster horses.”

By listening to customers, the more we learn what our customers need or want. And by knowing what our customers want, our organization will be in a better position to uncover tacit priorities that will fuel the most attractive development and innovative options.

2nd Dimension: Global Network
Global Network allows intelligent innovators to leverage dispersed knowledge across the globe. Each site or external partner is integrated into a seamlessly managed innovation network.

By having a Global Innovation Network, our organization will have the impetus to grow faster than its market.

3rd Dimension: Future Foresight
A well-tuned future trends capability can be a powerful strategic and competitive weapon in today’s global environment. It can identify tomorrow’s market opportunities and risks to drive innovation. Detailed and imaginative, this envisions the future competitive environment which better prepares our organization how to approach it.

4th Dimension: Innovation Organization
A critical element of success is the way organizations foster an innovation culture. An Innovation Organization carries within its DNA the intelligent innovation principles – senior management commitment to innovation, knowledge sharing, cross-functional teaming, freedom to pursue ideas, and innovation-friendly incentives. These are all embedded in the organization.

Intelligent innovators must work hard to unlock the innovation potential within the organization and use the tools available to direct organizations to take advantage of market opportunities. With a clear destination in mind, an innovative organization can accelerate its potential to gaining the winning edge when it comes to innovation, customer excellence, and profit.

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