Cranfield School of Management
Interview: Professor Keith Goffin
Innovation Management: Strategy Implementation
Using the Pentathlon Framework.
SM
Hello, my name is Steve Macaulay from the Learning Services
Team at Cranfield School of Management. I am here today
interviewing Professor Keith Goffin, who is the joint author with Rick
Mitchell of Innovation Management: Strategy Implementation Using
the Pentathlon Framework. So first of all Keith, I would like to ask
you what prompted you to write this book in the first place?
KG
It actually goes back to the late 90s, 98/99 we conducted some
research at Cranfield School of Management looking at how
companies approach innovation management. In that research we
first of all surveyed about 200 companies and looked at some of the
issues they faced and then went in a did sixteen detailed case
studies where we got the chance to go into these companies and
over a number of days look in detail at their confidential plans for
new products and services. What came out of that research was
that managers were really struggling with the area of innovation –
they wanted to improve in that area, but they didn’t have clear
structures and approaches for addressing all of the many issues
that are involved in innovation management. Essentially what they
were saying to us in that research was innovation management is a
complex area, there are lots of different things that you need to
work on and we as managers know we need to work on these, but
actually setting priorities and seeing how these different topics
interact with each other, that is a difficult area and some of the
results of the research also lead into a particular framework, a
particular way of looking at innovation management and later on
that led us, after we had used some of these frameworks and things
working with companies, to actually then write the book. So it was
actually writing down a lot of the things that we had learnt through
originally research, but then actually applying the results for
different companies.
SM
So, the formula that you have come up, the innovation pentathlon,
that sounds a bit like you read many books saying five steps to
success – I am imagining its more than that?
KG
Well, that also goes back to this research project because one of
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the many books that we looked at in the literature is called The
Innovation Marathon and that book was published in the US in the
90s and what that said was that if managers want to get better in
their companies at developing products and services, it takes a lot
of effort and takes time and they drew the analogy to a marathon in
the title of their book. In our research we found that managers
were saying well no, there are many different aspects, so in a sense
it is not like a marathon, it's not just one sport that you have to be
particularly good at, ie, in this case running, innovation requires very
different approaches – so often which have to do with technology
and are technical in their nature, others which are very much related
to the people, the culture of innovation you have in a company has
a major impact on the products and services that come out of it.
So that is why we started well, what are some of these key areas.
It turned out that we through the research put them into five key
areas and then drew the analogy to a pentathlon and just like in the
Olympic sport you don’t get the gold medal in the pentathlon for
being good at one or two disciplines, we found that actually
companies were often when they were approaching innovation
management focusing on only one or two areas and forgetting
others and therefore weren’t actually getting to top performance.
So we are not saying there are five easy steps, we are saying that
there are five general areas that you need to focus on – they are
each related, that is the complexity, so if you actually focus on one
of these areas which is how you come up with ideas within your
organisation, you can’t take that totally alone, it has interactions on
the other areas, but if you only focus on that one area you are
forgetting four others, which are essential. So taking the name the
pentathlon was actually to try and emphasise a bit the complexity –
as a manager you need to be good at at least five different areas,
maybe more and you have got to get the balance between them
and also understand the interactions.
SM
So tell me what these five areas are.
KG
We drew very much from the idea that in any organisation if you are
going to have good products and services and improved processes,
all of the aspects of innovation that you are looking for, you have to
somewhere in the organisation have creative ideas and where
those ideas come from – they can be in your organisation, they can
be actually working with other organisations, talking with customers,
but somewhere those ideas must be created. It is the area that
most companies will focus on, most managers who want to get
better at innovation come up with lets have a suggestion scheme in
our company, but the innovation ideas on their own won’t help, we
need to actually, if we are collecting lots of ideas, we have to have a
good process of selecting the best ones.
So, if you think of a funnel of ideas coming in, hopefully choosing
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then the very best ones, we don’t want to waste our resources on the
less than good ideas and we need lots of ideas in order to come up
with a few very, very good ones. So you need lots of ideas, select
the very best ones and then move to implementation. So that
could be coming up with ideas for new products or services,
selecting the ones which we think are going to be the most
rewarding to the organisation and be the best use of resources,
then in addition … ok, so yes, we have got this funnel of ideas
coming in and we are choosing the very best ones, ie selection is
important – it is no good having lots of good ideas and not knowing
how you are going to select them because then you won’t have
thought about the resources that are necessary. Once you have
chosen the best ones, get them, implement them as products and
services as quickly and as efficiently as possible, so this is like the
middle slice of the pentathlon, this funnel of ideas coming through.
Unfortunately, if you only think of that part of it you probably won’t
have the required direction, so it really is important that companies
do have an innovation strategy – are they trying to be first to
market, for instance, if they are that requires difference resources
and different approaches compared to another company that might
say it is going to be a fast follower, learn from the competition, learn
from the things that they did well, improve on the things that they
didn’t – all of these aspects, also a key part of innovation strategy is
making sure that what you innovate in that it is not easy to copy,
otherwise you waste all that effort if you come up with a new
product or service that your competitors copy quickly. And then the
final and fifth element of the pentathlon is the culture, the people
and organisation, which should hopefully be the bedrock, really
supporting everything that you do, that you have an innovative
organisation. Lots of companies though fail to have a real culture
of innovation and actually it impedes them – there are not the
approaches to come up with creative new ideas, there are not the
approaches to understand customers, understand really what is
required in the market place.
Today lots of market research is based purely on focus groups and
surveys which are useful methods in their right place, but are
actually not very good at understanding customers’ needs and
customers’ problems. So there are lots of things like that where the
culture of the organisation will hopefully set the openness that you
require to be successful at innovation. Those are the five
elements. Obviously they are interrelated – if you haven’t got the
right culture, you are unlikely to be very good at coming up with
creative ideas, you will have the sort of organisation where people
say, no we tried that three years ago or no it won’t work because of
this or that. Similarly, even if you have got a good process for
coming up with ideas, if you haven’t got a good process for
selecting the best ones, you are likely to de-motivate your people
because it will be slow the selection. I was talking to a company
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yesterday that was coming up with a new process for ideas and
things like that and they were thinking that once a year they would
make the selection, well there is a huge risk there that the people
that have taken the time to come up with these ideas, interact with
customers and put these ideas forward, if they have got to wait a
year they are not likely to be hugely motivated to put lots and lots
more ideas in the meantime.
SM
It all sounds very comprehensive, I am just wondering how it would
apply, what sort of business challenges would it be for the average
manager – how would they pick this up and use it?
KG
Well, the way they pick it up is there is a simple diagram of it which
people tend to like because it gives them a framework when they go
back into their organisation or if they have a look at another – they
can in their minds eye think of that and OK within that element, is it
a strength or a weakness? So it gives them quite a simple way of
approaching what we sometimes call an innovation audit – that’s in
sense when you are trying to work out where your strengths and
weaknesses are and this was something which managers always
have struggled with because innovation is so complex – so if it is so
complex how can I get an easy overview of my strengths and
weaknesses? Well it allows you to see is your company one that is
particularly good at the ideas, or is it particularly good at the
implementation. Has it got a good process for selecting ideas?
What is the culture like? It allows people to put things essentially
into boxes and think strength or weakness in that area and then set
priorities for improvement because often in innovation management
the problem is not to identify things that you need to do, but actually
to put priorities on there because you are not going to be able to
address absolutely every issue straight away – so it is actually
setting the priority, it helps that way as well.
SM
So give me some examples then where the pentathlon has been
particularly useful with an organisation.
KG
We have used it with a lot of organisations over the last few years
and what it allowed organisations to do is to recognise first of all
what they have been doing in the past, how effective have they
been in coming up with new products and services? Have they
had enough new products and services to give them the competitive
advantage? The products and services that they developed, how
have they made those hard for competition to copy?
It allows them to start to realise those types of things. That is
essentially looking at the outputs ie, the things that have been
created – the outputs, the products and services. Once they have
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looked at what has actually come out of the organisation today, they
will maybe take a step back and say well that is the output, but what
are the causes of whether that output has been good or bad? And
then they can start to say, well OK, yes we have had a number of
new products on the market, they haven’t been particularly
successful because the ideas were OK, but they weren’t
differentiated from the competition. So it allows them to really start
to diagnose – the symptoms will be is an organisation innovative
enough or not? But then it will allow them to work on the root
causes.
SM
Have there been any examples where you have been disappointed
with the outcomes from using the pentathlon in an organisation and
can you identify why?
KG
Not directly disappointed, what we have always stressed is that it is
a framework, it's not a predictive model that if you do X, then Y will
automatically follow. It is a framework to allow you to start to
understand the complexity and set the priorities. The limitations are
probably what we would stress, rather than being disappointed
when it has been applied. The limitations are it's not prescriptive, it
doesn’t tell you everything about how innovation can be approached
and the interactions, if I start to change the culture, it will interact on
the other areas and that is not always easy to predict in advance,
but at least the framework does stress that OK if you make changes
here, look for the interactions and try to think in advance what they
will be.
SM
You have been using the pentathlon now for quite a few years – are
there things if you were to write the book again today that you would
want to say this is the way the market is going, these are the things
that I have learned, that maybe I would put more stress and
emphasis on?
KG
What has happened, particularly in the last couple of years since
the book has been published, is that there is starting to be more
emphasis on innovation management, so the job title innovation
manager was largely non existent in the late 90s – around 2000 it
started to emerge. Now it's not in every organisation by any
means, but it is not uncommon to find the title innovation manager,
so organisations are starting to put emphasis on it and recognise
the need that you need somebody to really push it and therefore an
innovation manager. What would we do differently with the book?
And we are starting to work on a second edition, so these are the
thoughts that we having at the moment on this – we would certainly
put more emphasis on the problem that many organisations are not
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recognising the opportunity. If they innovate there is a huge
opportunity to come up with more products and services and
increase revenues and come up with new markets and things like
that, but one of things about innovation management if I don’t
approach it this week, or next month, there is no penalty. It is a
missed opportunity and we need to, and we will, stress that more
with managers. For many managers, although each year surveys
will come and there has been a recent IBM survey came out of
about 500 CEOs in that innovation came out as one of their top
priorities. Yes, the recognition is there – that is an important thing,
but fewer companies are actually taking steps to improve their
innovation performance today. There is a real sort of lag – people
say oh yes, it is something that I should have addressed, but there
is no penalty clause if I don’t do it this week, this year, next year
type of thing. And that is something that we would stress more –
innovation is all about the opportunity that you are missing and too
many companies have not realised what they are actually missing
out on.
SM
If you were to pick out a key message or set of messages from the
book, what would you like to leave for the practising manager?
KG
First of all, the overall framework that it gives you a quick and easy
approach to understanding where your organisation has got its
strengths and weaknesses. Because it is simple as well, it is
relatively easy to communicate within an organisation and so when
you make your choice of priorities and then want to start making
improvements, a key part of innovation is that communication.
Innovation is often misunderstood, many people think of only the big
huge breakthrough like the iPod product as innovation, everything
else is not innovation – that is not true. You can have incremental
innovations, they are just as important in some as the big
breakthroughs. We don’t want to miss either the big breakthroughs
or the small innovations. We can have product innovation, service
innovation, process innovation – all of these we want to get. So,
people shouldn’t forget that and the communication in an
organisation is important because typically otherwise you will find
assumptions like, oh innovation is just the big breakthrough and its
R+D’s job if you are in a manufacturing organisation – so Research
and Development, they do the innovation. Well, if that is the
attitude, much of the organisation is not going to be contributing
sufficiently to innovation and that sort of implicit assumption by
many staff happens a lot within organisations – Axa Insurance in
Ireland we have done a lot of work with since about 2000 and one
of the key things that they have found was getting the involvement
of all of their staff in innovation was necessary and in order to
achieve that they had to be very clear in terms of communication
what innovation is within their context and they spent a lot of time
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explaining to staff that there were for them four key elements of
innovation where every person, member of staff, could contribute.
Yes, there were the new products, that was an area, but there was
also the taking non value adding steps out of their processes, the
way their current products and services were delivered was an
important part. Improving the current products and services and
then reuse of ideas from the organisation. Axa is a big
international organisation, sometimes the ideas from France or from
US could be very useful in Ireland, so those aspects as well. And it
is these types of things that we will be stressing more in the book
about the importance of addressing innovation today, moving ahead
on it fast, communicating effectively with your staff what is
innovation, what is the role of each of the people within the
organisation to contribute towards it.
SM
Keith Goffin, thank you very much.
Transcript prepared by Learning Services for the Knowledge Interchange
www.cranfield.ac.uk/som
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Produced by the Learning Services Team
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© Cranfield University 2007