In a recent show, I talked about setting innovation objectives.  Listeners wrote in asking for details on how to include innovation in the objective setting process.   So, in this week’s show I share the steps to setting innovation objectives. Done well, innovation objectives can result in exponential success for your organization.

The purpose for setting objectives is to gain alignment in the organization.   Innovation success depends on getting everyone in the boat and rowing in the same direction.  When you incorporate innovation objectives into individual, team, and organizational objectives, you gain alignment.  This will be evident around the innovation focus, funnel, and strategy.

Missteps

Setting innovation objectives is hard work.  Over the years, my approach has changed. In my days leading teams at HP, objectives did not provide clear guidance leaving engineers to figure things out.  When objectives are vague, people wonder whether what they’re doing aligns with the organization.  

Other issues arise when objectives are…

• Too task-oriented leaving no room for creativity.  
• Too rigid, locked in concrete until annual performance reviews.  
• Too broad or include too many things creating a fog.   
• Measurable, hence tied to performance review and annual budget cycles.  

Getting it Right

To help with setting innovation objectives, I’ve come to believe in OKRs (Objectives and Key Results).  Andy Grove, co-founder of Intel, defined this objective setting process. Many major companies are using OKRs today.  I use a simplified version of OKRs.  Think of the objective as the vision or goal line.  It’s where you want to go. The key results are the measurable steps to get you there.   When the objectives are clear and the key results align, the outcome is inspiring. People see a successful and meaningful impact in their efforts.  

To begin, I set the objective with two to five key results.  It can be set for one year to five years. Key results are laid out in a six-month rolling process.  Every six months, a key result is met and the next key result begins.

Alignment and autonomy are the overarching goals.  Get the entire organization aligned. Give employees the goal and allow them to use their creativity to achieve it.  Provide the direction and measurement of success. Leave the ‘how’ to them.

Advice on Setting Objectives

• Take time to set objectives.  
  • I spend hundreds of hours, write and rewrite, and get feedback from others.
• Make sure there is clarity.
  • Wording is important.  
  • Clarity is key to getting alignment.
• Be transparent.  
  • Share objectives with others.
• Avoid too many objectives.  
  • Three to five objectives with two to five key results for each.

• Objectives should be adaptable.
  • Change the objective based on learning.
• Objectives should be specific.  

Good Innovation Objectives

A basic element of good innovation objectives is a framework.  I use the FIRE framework.  FIRE stands for Focus, Ideation, Ranking, Execution.  I’ve done many blogs and shows over the past fourteen years on FIRE.  It’s also laid out in my book, Beyond the Obvious.  

Below I describe the FIRE framework and give examples of using it to develop innovation objectives.

1. Focus.
   • Focusing the search for areas of innovation.
   • Three focus areas are “who”, “what”, “how”.
     • Example of “who”:  
       • What could be the focus over the next six months to learn more about who your customer is?
     • Example of “what”:
       • What focus areas should you set for your products or services.
     • Example of “how”:
       • Focus on how you operate, how you innovate your team/organization to be better than the competition.
   • The objective is to expand your search for areas of innovation.
   • The Key Result would be the steps that need to be taken to do the search.
   • Another objective could be relooking at old ideas.
2. Ideation.
   • This is the generating of ideas.  “The fuel for innovation.”
   • Hundreds of ways to generate ideas (Thinkertoys, brainstorming)
   • Determine which tools work for your organization.
   • An objective could be “experiment with different approaches to creating ideas.”
   • Another objective could be “deploy an Idea Management System” (IMS).
3. Ranking.
   • Fills your innovation funnel.
   • Score ideas and work on highest scored ideas first.
   • Examples of objectives around ranking:
     • Testing the scoring method
     • Determine if ranking approach draws out truly high-quality ideas.
     • Ensure the funnel is full of high quality ideas.
     • Re-score ideas in the IMS that are not in the funnel.
     • Search for external high-quality ideas.
4. Execution.
   • Examples of objectives:
     • How many ideas are there in each phase of execution?
       • How many in market validation, customer validation, prototype, commercial launch?
     • How many proof of concepts working on or have shown.
     • Measure the end result of innovations that shipped. What was the impact?
     • Track your kill rate. How many ideas in each phase don't make it to the next phase?

Things to Keep in Mind

• I keep a rolling 12 months of objectives and key results, broken up into 6-month increments.  Work on and complete key results in first six months, but have second set ready for the next six months.
• Look back and assess which objectives and key results worked and which ones didn’t.  Adjust accordingly.
• Test objectives after a while to see if they contribute to the long-term success and impact of the overall objective.
• Share and learn from others.  Find out how others set objectives.  A great way to share and learn from other innovators is The Innovators Community, our online Slack community.  Join to share and get coaching and advice from the community of innovators.

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Five Minutes to New Ideas is now available as a standalone show.  It’s designed for the creative mind looking for that next great idea.  Listen on Apple iTunes, Spotify or at PhilMckinney.com.