Innovation audit is designed to map out innovation challenges and risks that prevent organisations from achieving their maximum potential with innovation initiatives. The innovation audit covers all four types of innovation and its effectiveness throughout the organisation.
The aim of the innovation audit is not to decide an innovation strategy for an organisation – choosing the balance between different innovation types. Rather, the aim is to highlight the strengths and weaknesses of all areas of innovation so that the management could have a realistic overview of the organizational capacity and the opportunities as well as threats that are not immediately obvious from the internal perspective.
Each innovation audit is modified specifically for the client organisation and depending on the size, complexity and needs of the organisation, the audit can run from a few weeks to up to three months.
The audit typically consists of both quantitative as well as qualitative research through polls, surveys, interviews, observations on the field, organisational data analyses and research data analyses. The audit results with an in-depth overview of all the key elements of innovation (resources, communication, talent, organisation) in all four innovation types (incremental & radical innovation, disruptive innovation & technology) and suggestions on how the organisation could improve its innovation efforts and possible next steps to take.
Innovation Audit is best followed by Smart Innovation© Strategy Workshop for the management team to implement audit results in strategy and boost growth.
Discover your Organisational Innovation Bottlenecks
Higlighting organisational innovation capacity and strenghts
Honest third-person insights on innovation bottlenecks
Mapping structural innovation dead weight and threats
Growth scenarios based on organisational capabilities
Innovation Audit Focus Areas
Assets & Resources
Resource allocation is the key element of strategy implementation and directly influences the organisational innovation capacity. Our innovation audit analyses the effects of resource allocation on different innovation types and gives suggestions on improving the innovation output with minimum investment.
As an example, disruptive innovation efforts do not require as much investment as R&D efforts in technology improvement and so organisations that use the same framework for all types of innovation, often over-invest in disruptive innovation. Higher investment often results in higher paperwork and bureaucracy that requires more human resources that end up cutting the innovation output and speed significantly.
We also look into different types of assets and their influence on innovation initiatives – such as company brand, market knowledge, history, geography and others.
Communication and Organisational Knowledge
Innovation efforts require highly efficient communication throughout the organisation both horizontally as well as vertically. During our innovation audit, we take a deep dive to understand tacit and explicit organisational knowledge transfer between people and divisions.
For an efficient innovation to happen, it is not enough to have well-structured explicit knowledge protocols and frameworks – innovation output also requires effective tacit knowledge transfer between a number of people through internalization and socialization.
Each innovation type requires different talent and a combination of diverse talents. As the organisational talent pool can vary significantly, the innovation audit aims to highlight the strengths and weaknesses of the existing talent pool to cope with different types of innovation. The audit then highlights opportunities for potential reorganisation or training of the current talent pool for maximum output and areas to improve with external talents.
Culture & Leadership
What are the unwritten standard operating procedures, “the way thing are done in here”? How is the organisational culture and leadership holding back the innovation efforts or how could it improve the efficiency.
What are the hidden fears and aspirations of the employees and leaders – the hidden agenda that is leading innovation efforts to its own direction? Innovation audit is designed to look deeper than the obvious and go beyond the initial interview results to unlock the organisational culture and leadership patterns.
Our innovation audit uses the Tribal Leadership framework of five stages of tribal culture to benchmark the organisational culture and leadership.
Organisation & Structure
Innovative organisations with effective resources and talent pool as well as willingness to explore different areas of innovation can still encounter challenges to innovate if their organisational structure is outdated and is not able to move with the speed required from the market.
Many organisations have understood the importance of agility and have embraced its ideas, even created agile teams within the organisation. However, few agile teams within an organisation do not make the organisation agile and as a result, even these teams or departments are not able to achieve their maximum capacity and output due to the structural (organisational) restrictions.
Innovation audit aims to explore the organisational structure with opportunities to improve innovation output throughout the organisation with optimal investment and structural change.
Optional: Strategic Fitness Process
Once the initial audit results have come in, it is advised to immediately take the next steps to have an honest conversation with the workforce, to align strategic goals and have everyone on the same page. The strategic fitness process is a great way to achieve this – to understand the mindset of your employees, identify emotional blockages and company culture as well as take specific steps to transform the organisation.
While Innovation Audit is a more analytical and specific overview of the organisational innovation landscape, the strategic fitness process is a more qualitative approach to company culture and communication that also enables the first steps to organisational transformation and change.
What is Strategic Fitness Process?
The “strategic fitness process” is designed by Harvard Business School in partnership with senior executives to enhance their capacity to implement strategy quickly and effectively. It does so by fitting the organization to the strategy and increasing fitness, the capacity of the organization to learn and change. Since then, this process has been used in more than 150 businesses in the retail, hospitality, high technology, banking, and pharmaceutical industries.
The process effectively creates an honest conversation between the senior leadership team and the rest of the workforce. As a result, this can enable a broad discussion and implementation of strategic goals as well as organisational change and transformation.