Business Transformation requires a strategic shift from the existing portfolio to a new portfolio of capabilities, products and services. It requires analysis of existing and emerging Technologies, Markets, Categories, Products and Services and the clear articulation of what the future should look like.

Effective Business Transformation is the outcome of an effective Innovation Governance process which is developed to steer the business from the “As-is” to the “To-be” position.

It can be radically achieved and therefore “Transformational”, but is more often achieved judiciously over time and maybe better referred to as “Business Transition”. The key difference between the two is the speed of and therefore the risk associated with the change.

In the pulp and paper industry where markets are mature and the cost of capital is high, it is critical to have a long term strategic view of changes in markets, the emergence of new opportunities and the actions of competitors. Systematic Innovation Governance encompasses all aspects of innovation and new product development lifecycle.

It is defined through four key phases:

Phase One: Innovation Planning and Road-mapping

Since growth through innovation is a core platform of future growth, Innovation Planning is a critical component of the strategic planning process. In mature businesses “Strategic Road-Mapping” is used as a methodology to collectively review Macro environmental changes as well as changes in Markets, Products, Services, Competitors, Channels, Supply Logistics, Production processes,

Insights from the Road-mapping process inform the articulation of “Innovation Plans” which map the current and potential array of products, process and services through a multitude of planning lenses which include markets, time horizons, innovation type, risk profiles, technology maturity and strategic imperatives. The Innovation planning process is where we answer the key questions:

  • What plans do we create to achieve our strategic objectives?
  • What contribution can we achieve from our existing products and processes
  • What planning gaps do we have that we can frame as “Strategic Opportunities”?
Phase Two: Idea Campaign management – Directed ideation aligned with strategic opportunities

In response to defined strategic opportunities, directed ideation is achieved by selecting those groups which can best contribute new ideas in that area and inviting them to contribute ideas within a constrained time frame. This may include internal resources, technical or research specialists, suppliers, marketers, sales personnel and customers. To support the campaign it is essential to provide rich context through a summary of the information we have about the market, competitor products and technologies as well as insights from our roadmaps.

To ensure the effectiveness of this process it is important to define in advance:

  • How will we evaluate and prioritise new ideas as they are contributed
  • How we will assess which ideas offer the greatest potential to fulfil our defined strategy
Phase Three: Gated project execution across new products and processes

Those ideas which are selected to become projects need to follow a structured process which works through a series of phases or gates. This process is typically structured as:

IDEA > Feasibility Assessment > Business Case Development > Pilot > Production > Launch

Processes vary across companies and projects and it is essential to create lean processes which are tuned to meet the needs of the business. On one hand, processes can be too bureaucratic and delay projects through too much red tape. On the other hand, processes can be too lightweight, leaving companies destined to repeat the mistakes of the past.

Phase Four: Portfolio Management to monitor the alignment of the active project portfolio with the strategy.

As projects are progressively approved, accelerated, placed on hold, recycled or killed in the course of making judgements on individual projects, the cumulative impact and contribution of the portfolio of projects changes dynamically over time. To provide alignment between the active portfolio of innovation growth projects and the business growth strategy it is essential to conduct regular portfolio management reviews.  While these have traditionally occurred on a quarterly basis, the cadence is increasing and we are now seeing many businesses conduct these on a monthly cycle. Ideally, the portfolio should be reviewed every time a major project is added, altered or removed.

Creating visibility of this information across the enterprise for all business units, sites, product categories and markets is a complex management challenge requiring clear articulation of strategy, well-defined idea and project execution processes and effective reporting solutions.

All global business and technology trends point in the same direction: there is a need for more proactive and far-sighted management of innovation. Innovation for business reinforcement and growth – and for transformation in particular – are, of course, the prime responsibility of top management. Systematic Innovation Governance – a holistic approach to steering, promoting and sustaining innovation provides the framework by which these growth objectives can be fulfilled and is thus becoming new management imperative.

Keynote presentation by:

Gerard Ryan – Managing Director and Principal Innovation Consultant: Prodex Systems Australasia

President: Product Development and Management Association (PDMA) Australia