Managing Innovation: Fitness Test/Audit, Analysis and Explanation

This assignment presents an innovation fitness test and audit designed to assess an organization's innovation management capabilities. The self-assessment tool comprises statements evaluating various aspects of innovation, from strategic alignment and new product development processes to organizational structure, customer understanding, and competitive advantages. The assignment includes a scoring system, a profile plotting the organization's strengths and weaknesses across key dimensions like strategy, processes, organization, linkages, and learning. Furthermore, it provides detailed explanations for low scores in each area, along with actionable steps to improve the organization's innovation performance. The analysis covers topics like the importance of a clear innovation strategy, effective project management, supportive organizational culture, customer-centricity, and continuous learning. This assignment serves as a valuable resource for understanding and enhancing innovation practices within an organization.

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JOHN BESSANT
Managing Innovation
Innovation Fitness
Test / Audit
(Including
Explanation)

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Innovation Fitness Test / Audit
(Including Explanation)
This simple self-assessment tool focuses attention on some of the important areas of innovation
management. Below you will find statements which describe 'the way we do things around here' - the
pattern of behaviour which describes how the organization handles the question of innovation. For each
statement simply put a score between 1 (= not true at all) to 7 (=very true).
Around here…..
Statement Score 1= Not true
at all to 7 = Very
true
1 People have a clear idea of how innovation can help us
compete
2 We have processes in place to help us manage new
product development effectively from idea to launch
3 Our organization structure does not stifle innovation but
helps it to happen
4 We have good 'win-win' relationships with our suppliers
5 There is a strong commitment to training and
development of people
6 Our innovation strategy is clearly communicated so
everyone knows the targets for improvement
7 Our innovation projects are usually completed on time
and within budget
8 People work well together across departmental
boundaries
9 We are good at understanding the needs of our
customers/end-users
10 We take time to review our projects to improve our
performance next time

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11 People know what our distinctive competence is - what
gives us a competitive edge
12 We have effective mechanisms to make sure everyone
(not just Marketing) understands customer needs)
13 People are involved in suggesting ideas for
improvements to products or processes
14 We work well with universities and other research
centres to help us develop our knowledge
15 We learn from our mistakes
16 We look ahead in a structured way (using forecasting
tools and techniques) to try and imagine future threats
and opportunities
17 We have effective mechanisms for managing process
change from idea through to successful implementation
18 Our structure helps us to take decisions rapidly
19 We work closely with our customers in exploring and
developing new concepts
20 We systematically compare our products and processes
with other firms
21 Our top team have a shared vision of how the company
will develop through innovation
22 We systematically search for new product ideas
23 Communication is effective and works top down, bottom
up and across the organization
24 We collaborate with other firms to develop new products
or processes
25 We meet and share experiences with other firms to help
us learn
26 There is top management commitment and support for
innovation

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27 We have mechanisms in place to ensure early
involvement of all departments in developing new
products/processes
28 Our reward and recognition system supports innovation
29 We try to develop external networks of people who can
help us - for example, with specialist knowledge
30 We are good at capturing what we have learned so that
others in the organization can make use of it
31 We have processes in place to review new technological
or market developments and what they mean for our
firm's strategy
32 We have a clear system for choosing innovation projects
33 We have a supportive climate for new ideas - people
don't have to leave the organization to make them happen
34 We work closely with the local and national education
system to communicate our needs for skills
35 We are good at learning from other organisations
36 There is a clear link between the innovation projects we
carry out and the overall strategy of the business
37 There is sufficient flexibility in our system for product
development to allow small 'fast track' projects to happen
38 We work well in teams
39 We work closely with 'lead users' to develop innovative
new products and services
40 We use measurement to help identify where and when we
can improve our innovation management

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When you have finished, add the totals for the questions in the following way:
Questions Total Score (= Total
divided by 8)
1,6,11,16,21,26,31,36 Strategy =
2,7,12,17,22,27,32,37 Processes =
3,8,13,18,23,28,33,38 Organization =
4,9,14,19,24,29,34,39 Linkages =
5,10,15,20,25,30,35,40 Learning =
Now plot a profile for the five dimensions.
0
1
2
3
4
5
6
7
Strategy
Learning
LinkagesProcesses
Innovative organisation
Innovation audit
Ideal score

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Using the innovation audit
Below you will find the audit questions together with a brief explanation of what a low score might
mean – and what steps you might take to improve that situation.
Around here…..
Statement What does a low score here mean? What can I do about it?
1 People have a clear idea of
how innovation can help us
compete
Lack of a clear innovation strategy –
or failure to communicate it
effectively
In the first case the issue may be
that there is a general recognition
of its importance but no clear
understanding of how innovation
will take the business
forward. What are the targets for
change? Which projects will be
undertaken and why? What’s the
balance between simple
incremental improvements (‘do
better’ innovations), and more
radical (and higher risk) ‘do
different’ projects? Is the focus on
product, process or other kinds of
innovation? Exploring, discussing
and making explicit the underlying
strategy is strongly linked to
innovation success.
Alternatively the problem is that
there is a strategy but it is not
communicated effectively. People
don’t know where and how
innovation can help the business
move forward. They see change, if
and when it happens, as something
which happens but which they do
not contribute to (although it may
often affect them, especially if it
concerns changes to working
processes). This can have an impact
on morale – and it also misses out
on a major opportunity to mobilize
Develop a strategy – a
clear statement of where
and how innovation will
take the organization
forward.
Use policy deployment
tools to communicate
and build ‘buy-in’ to the
strategy

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the creativity and knowledge of the
staff to contribute ideas and energy
to support innovation efforts
2 We have processes in place
to help us manage new
product/service
development effectively
from idea to launch
There is a risk that projects will
overrun in cost and time, resources
may be poorly utilized and
innovation becomes something of a
gamble rather than a managed risk
These may be symptoms
of a lack of enough
discipline and structure
to the process of
innovation. To improve
this:
• Implement a
stage gate system
• Put in place ‘good
practice’ tools
and techniques
for project
management and
review
• Ensure early
involvement and
concurrent
working across
the different
groups involved
• Create cross-
functional teams
to ensure the
relevant
knowledge and
skills are available
to the project
• Use post-project
reviews to map
the innovation
process and
identify where it
could be
improved

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3 Our organization structure
does not stifle innovation
but helps it to happen
The culture – ‘the way we do things
around here – is not supportive of
innovation – people feel
constrained. May be seen as too
bureaucratic, too structured, too
rigid, etc. Is there space for
innovation? Specific time
allocated? Where do people take
innovative ideas? Is innovation
recognized and rewarded?
Organizational
development –enabling
structures, training,
facilitation, new routes
for ideas flow,
reward/recognition
linked to innovation, etc.
4 There is a strong
commitment to training and
development of people
People don’t feel they are valued
and may withhold their innovative
ideas. Or they may be limited in
what they can achieve by the lack of
skills or knowledge
Increase investment in
training, improve its
effectiveness. Develop a
training strategy. Use
frameworks to guide the
process – for example,
‘Investors in people’
5 We have good 'win-win'
relationships with our
suppliers
Overall performance weakened –
the whole is less than the sum of its
parts. Failure to capitalize on their
role as innovation sources and
failure to deploy process
improvements in their world to
upgrade overall system
effectiveness. Open innovation
opportunity missed
Introduce a supplier
development
programme to build
partnerships.
Share vision about
overall strategy and
encourage their input to
delivering this. Share or
provide resources to
help – training, ‘guest
engineers’, etc.
6 Our innovation strategy is
clearly communicated so
everyone knows the targets
for improvement
People don’t know where or how to
focus their innovative efforts –
innovation is just a slogan. The risk
is they won’t bother or else they will
innovate but in random fashion
which may not help the
organization move forward
Policy deployment of a
clear strategy
7 Our innovation projects are
usually completed on time
and within budget
Overruns on time and/or budget
usually mean there are weak or no
processes in place to manage
Stage gate and other
project management
inputs. Deploy ‘good

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projects systematically and
appropriately
practice’ tools and
techniques – early
involvement, concurrent
working, cross-functional
teams, etc.
8 People work well together
across departmental
boundaries
Silo mentality, failures of
communication – key information
not being shared or shared too late.
Conflicts between different parts of
the organization – the whole is less
than the sum of the parts
Review and change co-
ordination
arrangements. Use
secondment, cross-
functional teams, early
involvement, quality
function deployment,
etc.
Teambuilding and
training across the
innovation process
9 We take time to review our
projects to improve our
performance next time
Without some way of capturing and
holding on to learning about what
works – and what doesn’t work –
the organization risks making the
same mistakes again and again.
There is no ‘organizational memory’
and success becomes a hit and miss
affair.
Deploy post-project
reviews and other
learning capture devices.
Link to ‘standard
operating procedures’
and other ratchets to
capture and preserve
and share. Codify tacit
experiences.
10 We are good at
understanding the needs of
our customers/end-users
Products/services which people
don’t buy! Missed opportunities in
terms of their design ideas. Risk
that we offer ‘ the better
mousetrap’ that no-one wants!
Review and extend your
market research tools,
especially those aimed at
getting close to ‘the
voice of the customer’
(VOC). Explore tools and
techniques which bring
in users at the ‘fuzzy
front end’ of the
innovation process.
Use quality function
deployment (QFD) to
ensure the VOC gets

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heard throughout the
organization.
11 People know what our
distinctive competence is -
what gives us a competitive
edge
If we don’t know what we know –
and more important, what do we
know which is unique or hard to
imitate – then we don’t really
understand how we will compete.
Building an awareness of the things
we know about and can do well-
means that innovation is not a
random set of ideas but linked to
areas of strength.
Develop and share an
understanding of ‘core
competencies’ and how
we can leverage these in
products, services and
processes. What are our
distinctive strengths?
And how do we protect
and exploit our
intellectual property
(IP)?
12 We have effective
mechanisms to make sure
everyone (not just
Marketing) understands
customer needs)
Successful innovators understand
their customers needs – that’s a key
message from countless studies.
But it is important that the
understanding gets through to
everyone in the organization –
otherwise they may put their ideas
and energies into creating
products/services which no one
wants!
Deploy approaches – like
quality function
deployment (QFD) - to
ensure everyone
understands customer
needs and how their
innovation activity can
contribute to meeting
these. Engage people
from other functions –
not just Marketing – in
customer visits, market
research, etc
13 People are involved in
suggesting ideas for
improvements to
products/services or
processes
Is innovation seen as something
confined to the ‘licensed few’ – and
do you risk losing potential ideas
and input from everyone else? The
danger is also that ideas for new
processes – ways of working – may
be resisted because people weren’t
involved in their development
Develop and implement
a formalized high
involvement programme
– training, tools, process,
enablers
14 We work well with
universities and other
research centres to help us
develop our knowledge
Your knowledge net may be spread
too thinly and you could be failing
to build the rich links needed in
open innovation world. Possibly
‘reinventing wheels’ because you
aren’t aware of or using what is
Develop an ‘open
innovation’ strategy –
identify key needs and
where to find them.
Develop mechanisms to
form and manage
knowledge supply

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available in the wider knowledge
environment
relationships – for
example, through
Knowledge Transfer
Partnerships with
universities.
15 We learn from our mistakes Reinventing wheels, making the
same mistakes again
Learning and review
mechanisms – reflection
tools and aids, learning
cycle
16 We look ahead in a
structured way (using
forecasting tools and
techniques) to try and
imagine future threats and
opportunities
Being surprised by unexpected
developments not on the current
trajectory. Too little time to react
because not aware until the crisis
hits
Deploy futures tools and
techniques – forecasting,
scenarios, horizon
scanning, etc.
17 We have effective
mechanisms for managing
process change from idea
through to successful
implementation
Resistance to change, lack of buy in
or maybe direct hostile action. Lack
of user input means weaker design
and lack of ownership
Deploy change
management
approaches which
ensure buy-in –
communicate, share
visions, training, user
involvement in design,
etc.
18 Our structure helps us to
take decisions rapidly
Slow decisions which affect the
speed and flexibility of innovative
response – too late for
opportunities, overruns on time and
budget etc.
Optimize decision routes
– for example multi-track
for big and small
innovation projects.
Cross-functional teams,
concurrent working,
early involvement and
other time compression
techniques
Lean thinking applied
19 We work closely with our
customers in exploring and
developing new concepts
Loss of important ideas which can
shape a better product / service.
Missing out on smoothing the user
acceptance path through engaging
early adopters, in prototyping,
Deploy user-led
innovation tools –
crowdsourcing,
prototyping, etc. Web
2.0 approaches.
Customization toolkit.

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recommendation and viral
marketing, etc.
Lead user workshops and
methods.
20 We systematically compare
our products/services and
processes with other firms
Unawareness of where the frontier
is, or what ‘best practice’ is. You
may risk being surprised by faster,
cheaper or other performance
advantages. Or you may find that
all you have are ‘me too’
products/services or processes
which are only at – or even below –
the industry average.
Deploy approaches to
enable benchmarking of
products, process and
services
21 Our top team have a shared
vision of how the company
will develop through
innovation
No clear sense of direction or
complacent and comfortable
without a sense of stretch
Develop and share a
strategic vision
22 We systematically search
for new product or service
ideas
Innovation is a random hit and miss
activity with no product/service
strategy. No steady source of ideas
for new products/services – risk of
pipeline running dry
Product strategy linked
to portfolio analysis
Structured search
methods –
benchmarking, profiling,
reverse engineering, etc
23 Communication is effective
and works top down,
bottom up and across the
organization
Slow information flow, missing
elements, conflicts and other
‘friction – affects time and costs of
innovation
Communications review
and strategy
24 We collaborate with other
firms to develop new
products or processes
Missing key source of insights and
chance to leverage someone else’s
competencies. Costs of growing
your own and reinventing wheels.
Open innovation – ‘not all the smart
guys work for us’ – if we believe
they do we carry the costs of that
Develop an ‘open
innovation’ strategy –
careful understanding of
our competencies and
what we need from
others. Strategic
alliances and managed
relationships
25 We meet and share
experiences with other
firms to help us learn
Insulated view of the world and
belief in home grown solutions.
Risks being surprised by other
developments and misses out on
learning opportunities
Commitment to learning
networks and clubs.
Building informal and
formal networks to
enable this. Use