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How to Define Innovation Objectives and Innovation Goal
To help facilitate a strong leadership conversation about innovation objectives and innovation goals, here are some examples of why you might choose to enable an innovation engine for your organization:
- To differentiate your organization in the marketplace
- To build customer loyalty
- To identify savings potential
- To achieve revenue potential
- To accelerate exploitation of new business ideas worthy of pursuing
- To a build climate and culture of innovation as per the organization's innovation mission
- To become a leading innovation brand for products and services in the markets served and new markets you may serve
- To improve and expand current products and services
- To access new technologies
- To access new markets
- To identify market trends
- To improve product quality and associated core processes
- To improve employee attraction, engagement, and retention
- To develop new competencies
Defining the Innovation Goal
The innovation goal should be visionary and exciting. It should be something that has not seen before, measurable at least once per year (eventually more often), customer focused, and ultimately delivering value (top line, mid line and bottom line).
Following are some examples of innovation goals:
- Increase the product pipeline from x to y, to grow the top line by 5% better than your sector's GDP.
- Annually achieve 25% additional margin from new customer-driven services.
- Increase the top line every three years by 25%.
- Double the top line and bottom line every three years.
- Achieve 25% of the top line from new services created within the past 24 months.
- Develop new customer-driven products from the top ten customers that will increase net margins by 5% every year.
- Build a new S-Curve: Invent a completely new business with a new category of offerings.
- Improve customer acquisition ratio by 15% every year for the next three years.
- Achieve a customer satisfaction index (CSAT) (or some other best practices method such as net promoter score (NPS) score of 6.0 out of 7.0 (85% or better).
- Achieve 25% net profit from 3 new businesses and 25 new current product enhancements in the next five years.
- 1% profit before income tax (PBIT) above the current PBIT targets.
- Top customers rate us as most innovative in markets and categories we serve.
- 2x/3y: Grow 2x every three years, both top line and bottom line.
- 3/30/3: Within three years achieve a rate of 30% new revenue from products/services introduced in last three years.
- 20/20: 20% of new business (top line) should come from 20% of new customers every year.
- 10/20/30: Ten new offerings that yield 20% growth in revenue and 30% growth in profitability.
- 50% of all products should be engineered or should include technologies from outside the firm by 2020.
These are good examples of innovation goals to consider. Use the list to engage senior leaders in dialog, debate, and consensus. Then, define innovation goals for your company and for each business unit.
If your innovation initiative is for the entire enterprise, one goal should be directly linked to the business strategy.
If you are rolling out innovation only in your own business unit or information technology department, the goal should be aligned to the area's business or operational strategy.
Whatever you choose as your innovation goal, it should be fixed for a minimum of three years. At the end of three years, you can always enhance it or pick an alternative.
To communicate the innovation agenda to your organization you must first clearly define the innovation strategy, objectives and goals.
Over to you. Please comment below.
- How do you plan to motivate your company's employees to generate innovative ideas and products?
- What is your goal for company innovations in the next 12 months?
- What other items would you add to the above lists?
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