Governance is one of the most easily understood elements of a well-developed innovation architecture, so we will spend little time on its description. Frankly, it is where most organizations put their first energy when trying to get a handle on being more innovative. Stage-Gate International, a vendor of pipeline process and governance methods, has almost become the Jell-O of pipeline governance. To their brand credit, the term is now generic for any pipeline throughput monitoring and governance method (as Jell-O, to the chagrin of Knox, is to all gelatin desserts).
Here’s why it is needed: As senior executives, we need to be able to predict what will happen in the market in the near- term future so that we can manage all spending – including spending on innovation. If something is happening in our overall culture that is improving or impeding our innovation flow, a well-articulated and understood pipeline will be one of the first places where we can see that happening and either potentiate or repair as needed. Consumer Package Goods (CPG) businesses and Big Pharma have spent huge amounts of treasure getting these pipelines well mapped and understood. The opportunity – often missed – is to link the metrics available, via these pipeline dashboards, to decisions about the relative cultural dynamics driving that pipeline. Any complete approach to innovation will be a complex system. You need to have some diagnostic tools to see how you are doing.
Success Tip! Assuming you have a well-articulated pipeline map in place, and sometimes see flow impediments into, through, and out of it (how could you not if it’s any good at what it is designed to do?) – ask this question and expect a clear answer: “Looking at this current pipeline flow difficulty through the lens of the 12 Strategic Action Areas described in this paper, which areas should we be attending to that would fix this current issue, and prevent it in the future?” Listen to and learn from the findings. Expend the effort needed to improve the fundamental driver. Fix it. Centacor (now Janssen Biotech) did exactly that when two promising therapeutics were not moving through development as rapidly as they should. The assessment? Skill development and facilitation were needed for the project teams and managers. Both products got on track and delivered earlier than is typically the case.
To stretch your thinking, we offer up another metric: culture. This has been shown to have a significant impact on the quality and quantity of what is available at the mouth of the product funnel, as well as how elegantly things move within it.
Theresa Amabile, now at Harvard, looked at what the key drivers of a culture of innovation might be. In other words, what kind of culture feeds and runs a product/offering pipeline best, and what kind of culture improves net asset value? The data is clear, and there is a well validated and respected tool for assessing how an organization is doing, called the KEYS Assessment. It looks at 12 leading indicators for a climate of creativity. When used well, this assessment is regularly repeated by an audit function to look for both centers of excellence within the business and units that need some extra help with their climate so that they can fully deliver their value. We see that organizations that are paying attention to this data at the governance level – and acting upon I – feed a better pipeline and are better at quality/incremental improvement.
GOVERNANCE: Real-world Example:
While business writers described the “Big Pharma” of a decade ago as having trouble filling its pipeline other than through merger and acquisition, most firms did have a very well-articulated development pipeline. One center of excellence for innovation culture at a client during that time was a group focused on strengthening project management. This group was part of a team tasked to look at the entire pipeline in their company (a 12-year long process) for efficiencies that could speed things with no negative impact on quality or ultimate patient efficacy. A consciously planned and politically creative move by one of the managers, in a governance session pertaining to proposals to improve the speed, netted the company between 30-60 million in savings for any product that was still in the funnel at the two year mark. The leadership team of was consciously driving for a climate of creativity in their business unit, informed by KEYS and a deeply felt accountability to the value of innovation. This same team refined what was then an innovation evaluation and governance tool labeled PPCO, to what we now call Praise-First POINt.