Watch the 20-second summary and then read on!
Innovation managers are outliers in a world of functional managers. An engineering manager hires and grooms talent to design safe and reliable manufacturing processes. A business manager balances administrative tasks to maintain operational efficiency, and a sales manager ensures customer visits are scheduled as continued touchpoints. Each of these roles includes measurable performance indicators: safety incidences, organizational productivity, and sales revenues.
In contrast, innovation and product development managers have no certain goals and their output is fuzzy. Innovation leaders integrate skills of the functional managers: talent management, safety, reliability, manufacturing productivity, customer interactions, and sales revenues. Yet, innovation leaders face higher levels of technical and market uncertainties.
So, which skills are absolutely critical to success in innovation?
What is Innovation?
First, let’s take a step back and define innovation. If I were to ask 25 people what innovation means, I would get 35 different definitions! For our purposes, let’s assume innovation means the creation of a new product, service, or program that brings value to the producer and to the consumer. Thus, we include sales revenues as value to the company and utility, functionality, and convenience as values to a customer.
The Four Critical Skills
Knowing that innovation is fraught with risk, innovation leaders must master four critical skills to succeed. These are:
- Business knowledge,
- Talent acquisition,
- Process capability, and
- Strategic decision-making.
Successful innovation leaders process information from a variety of internal and external sources. They must understand the business from a technical perspective and understand customers from a market perspective. Traditional business goals, like financial analysis and productivity studies, are a factor in mastering the business. Innovation managers must use this information to prepare a profitable business case for any new product or service.
Business knowledge extends to trends, fads, and emerging technologies. Innovation relies as much on learning and change as it does in building efficiency into a current model. Successful innovation leaders study adjacent markets and industries and apply world-class best practices to compete over the long-run.
Because new product development (NPD) is inherently risky, innovation project team members use different tools to work together. A successful innovation manager builds a team that balances creativity, operational expertise, and customer interactions. Persuasion, negotiation, and conflict management are capabilities of an innovation manager who recognizes diversity of functional experience to commercialize a profitable new product.
It goes without saying that any manager must be organized and efficient with his or her time. Innovation managers use NPD processes and product portfolio management (PPM) to drive product development. Choosing and adapting an appropriate process is a hallmark of a successful innovation manager.
NPD processes range from conventional phased-and-gated waterfall systems to agile methodologies with hybrid systems like WAGILE becoming more popular today. (Read more about WAGILE here.) Understanding the organizational culture, executive risk tolerance, and the business model allows an innovation manager to select an effective NPD process. Of course, the execution of a product development project within the NPD process is linked to effective collaboration of team members – a direct link to talent acquisition as a key skill for the innovation leader to master.
Finally, innovation leaders act strategically as well as tactically. We have discussed the tactical and operational skills of acting on business knowledge and deploying an appropriate NPD process already. But, knowing “how” is very different than knowing “why”.
Successful innovation managers use decisions as opportunities to increase product knowledge and to improve customer service. Strategic decisions include which markets are attractive, what technologies are appropriate, and what products ought to be developed. This focus on specific growth objectives and competitive analysis differentiates a successful innovation leader from other functional managers. Check out our new virtual Master Class on Leadership, starting 18 August here. This course is specifically geared to the challenges of innovation, product, and project managers.
Four Critical Skills that Innovation Leaders Must Master
Innovation leaders must be adaptable, flexible, knowledgeable, and expectant. All managers must know their trade and be ready to measure performance outcomes. Yet, successful innovation leaders balance risk, investment, markets, and talent in a unique stew to produce customer satisfaction. Mastering the skills in business knowledge, talent acquisition, process capability, and strategic decision-making differentiates the successful innovation leader.
I highly recommend New Product Development Professional certification for any innovation manager. You will learn how strategy, portfolio management, and NPD processes guide decisions for innovation with best practices tools and techniques in process design, market research, and team-building. Register now for the next session of the NPDP workshop here.