I came across an article in Forbes the other day — “Five Reasons Your Boss Was Right To Shut Down Your Innovation Lab”. In this article, Tendayi Viki highlights a “trend that is starting to happen more and more… Several companies are quietly shutting down their innovation labs.” Tendayi eventually elaborates that it “turns out your boss was right to shut down your lab and here are five reasons why”:

1. It Wasn’t Really An Innovation Lab
2. Lack Of Strategic Alignment
3. Lack of Focus
4. It’s Mostly Innovation Theatre
5. Show Me The Money

The article made me think about what is wrong with the term Innovation and what many people, including “Innovation Professionals,” think Innovation is.

In discussions with Innovation Officers I sometimes find that they are focused mostly on finding good ideas. Don´t get me wrong, there is nothing wrong with having an organization engaged in “looking” for good ideas.

Now, looking for ideas is not a bad thing, but looking for ideas is different than translating ideas into new products or services. Ideation does not equal innovation. Innovation management is a process that transforms ideas into a profitable portfolio of projects and services. Innovation means capturing value on the back end — that´s what makes it a business. Value is exchanged in an infinite loop that digitally connects Products, Services, and Things with Customers, Employees, and Partners — all multiplied through networks.

In the “Relationship Economy” today, companies need to deliver ongoing value, memorable experiences, on-demand fulfillment, and personalized services. New products and services need to be developed with this paradigm in mind.

And in our digitized and digitalized economy, often times there is no Innovation without IT, as technology such as Internet of Things, Big Data, and Analytics are keys to enabling technologies to develop new, profitable products and services, often even based on new business models.

Introduce a systematic translation engine

When it comes to Innovation in Business, the key is to not only ask the question — What could we do? This would just be a starting point. And indeed, there are many ideation techniques: design thinking, brainstorming, sketching, challenging assumptions, storyboarding, or prototyping. These techniques are all more or less well suited to generating a pile of potentially great ideas. New ideas and market inputs can come from hundreds of sources, from listening to the voice of customers or from the voice of products. However, for true innovation, it is important to translate these ideas into value.

To have a complete approach to Innovation and make good Innovation investment decisions an organization must decide whether a good idea is indeed a good idea for the organization.

Answering two questions: Should we do it? and Can we do it? – will mean that your business knows whether a good idea is a good idea for your business! And in order to find the answers to these questions, a systematic approach will help.

It is important that you apply a systematic approach at the right places. While you want as much creativity as possible in the ideation phase, it is important to use a systematic approach in the translation process, to add the “reality flavor” to the equation and get clarity on a project’s value and opportunities. What I mean with this is that a team should works on the requirements that a new product or service would fulfill.

Is this idea a must-have, a should-have, or a nice-to-have requirement? What is the functional concept of the new offering? Does the functional design concept fulfill the requirements? Can we re-use components of existing offerings? What about the strategic alignment of the new offering? Does it fit with our company strategy? How about our Supply Chain Fit? Do we have the right partners? Do we have the people with the right skills? Do we have the money to invest in this?  If we take on project X, can we still do project C and D?

A unified 360-degree view of all innovation projects and current status of the full Innovation Portfolio with integrated risk management and analysis will enable you to make these investment decisions. A tight coupling of Requirements Management and Functional Concept Design to Portfolio Management will allow a unified 360-degree view that decoupled portfolio tools cannot provide.

Running an Innovation Lab can be a very good element in your Innovation approach – but it is not enough when used standalone. You need to get real. There should be no more innovation theater. Instead, add a collaborative backbone for the strategic alignment to your organization, and enforce focus on value by implementing a systematic approach to translating ideas into innovation.

To learn how, get your copy of our in-depth guide to innovation management today and check out the Oracle Innovation Management Website.