Increasing Innovation Maturity for a global bank

How we drew the roadmap

We designed a 3-step approach which combined qualitative data with quantitative objective facts. From these two data sets we developed a high-resolution picture of the performance and attributes of the company’s culture of innovation.

1. Assessing the attributes of the innovation ecosystem

We began by deploying our proprietary software to assess the attributes of the company’s innovation ecosystem through quantitative data. Our Innovation Maturity Assessment, the Assessment for Innovation Maturity (AIM), has been specifically designed to provide leaders with a critical quantitative tool for assessing the current organisational state of innovation capability and culture (innovation maturity). It also creates visibility of the specific focus areas required to increase innovation in the workplace and measure progress along the way.

We used AIM to assess the five core pillars of an innovation ecosystem – Strategy, Leadership, Management, Culture and Processes – and measure them against the four stages of innovation maturity: Novice, Apprentice, Expert and Leader. Using this framework, we were able to benchmark business units and geographies against each other as well as set an internal benchmark for the client as a whole to compare against other companies in the industry.

2. Analysing the efficiency of the innovation ecosystem

The second step was to dig deep into the client’s current innovation ecosystem, to better understand what was happening with ideas as they moved through the innovation funnel. From this, we:

• Learned how well the funnel has been converting and where most of the ideas were discontinued. This helped the client understand how many ideas would need to be initiated for a certain number to make it to production. (Average Funnel Conversion Rate or ACR).
• Learned how much it costs them to bring an idea to production by looking at the total investment in the funnel, as well as the cost of unsuccessful projects relative to the industry. This analysis looked at both the costs with the workforce (OPEX) as well as the costs associated with actual development. (Cost of Innovation or CI).
• Learned how long it took the company, on average, to bring an idea to production. (Average Time to Sustain or ATS).

We also designed an “innovation efficiency scorecard” to make it easier to compare the results from different geographies and business units and ran workshops with the client to develop this scorecard together.

3. Analysing the return and impact from innovation investments

Finally, we investigated where the client was investing in innovation and the financial impact those investments were having, to understand if innovation was a viable growth engine for the client going forward. During this stage, we:

• Used the New Product Vitality Index (NVPI) and Efficiency of Innovation Investment to see what percentage of their revenue was coming from ventures that had been implemented in the past 3 years, how those ventures had been accepted by the market and how much the client had spent to generate that revenue.
• Learned what the multiple indices of new ventures was, getting a snapshot of the operating profit margin of new ventures launched within the past 3 years.
• Investigated whether investing in new ventures was more profitable than investing in the core business by comparing the profitability index of the new ventures to the profitability of current core offerings.

As with the previous stage, we worked with key stakeholders in the organisation to develop an innovation return and impact scorecard to compare results across different geographies.

Next steps

Using the extensive analysis of the client’s innovation ecosystem, efficiency and investment returns, we produced a draft roadmap for improvement specific to each geography, centred on the innovation blockers we’d identified within each part of the business.

We also produced a Next Steps booklet – in both physical and digital form – to give every geography guidance on how to improve its innovation maturity score. This booklet took each of the innovation blockers that emerged from the AIM assessment and suggested best practices for improvement specific to each.

Where they are now

As a result of the innovation ecosystem audit, the client’s leadership team had concrete evidence to confirm observations they’d made about their innovation ecosystem and its outcomes, as well as new findings to consider. Furthermore, they got clear answers to why there was a gap between their expectations and the outcomes of their innovation ecosystem.

Off the back of the innovation ecosystem audit the company decided to redeploy various resources from one area of the innovation ecosystem to another. Specifically in some geographies the emphasis shifted from the innovation process to innovation strategy as this latter area was identified as needing more investment. In other geographies, focus was placed on improving internal communication as the elements of the ecosystem were in place but only a select group of people knew about them.