DC Velocity - Digital 2018

that companies and their third-party logistics (3PL) providers can effectively deploy to manage the innovation of services and rapidly move ideas to one of two fates— implementation or rejection. The four stages (briefly summarized in Figure 1) are:

1. Governance provides a defined structure from which all stakeholders can understand the opportunities, processes, priorities, and appropriate boundaries for supply chain innovation;

2. Education involves discovering the roots of your own organization’s and/or your customer’s challenges and pain points;

3. Research is guided by innovation goals and encourages ideation across the enterprise using design thinking, open innovation, and extensive collaboration, which together drive the most efficient prioritization and initial assessment of ideas; and

4. Rapid prototyping establishes 90-day cycles using Agile methodology with clear scope limitations that allow projects to either “fail fast” and move on or, in the case of successes, to promptly transition to market implementation.

Later in this article, we will provide a few customer examples that illustrate the value of a defined and structured innovation process. First, let’s take a detailed look at each of the four process steps.

1. GOVERNANCE: Defining innovation and estab-
lishing parameters
x Set the initiative’s foundation by
establishing goals, building measurements,
and defining the structure
x Form the innovation strategy and
governance model
x Develop the “prioritization matrix”
Thorough groundwork is essential to innovation.

For example, the inventors of the laser spent years
researching and understanding the physics, existing
solutions, and properties of light waves before the
actual “Aha!” moment happened. In the four-step
innovation process, the careful groundwork occurs
during the governance stage. This is when goals are
stated and a structure is put in place, resulting in
an “innovation charter,” or formalized innovation
strategy. Key issues to be addressed for the establishment of
governance are goals, measurement, and structure:
Goals—Innovation is driven by the need to meet a clearly
identified challenge. Key questions to ask include: Why do
you need to innovate? Who will innovate, and who will
make the important decisions? How will you innovate, and
how will you sustain it? What level of risk is appropriate?
What will be the outcome of the innovation initiative?
What will drive transformational change? The answers to
these questions will define your innovation strategy.

Measurement—One old maxim still applies to the innovation process: What you can’t measure, you can’t manage. Be sure to determine how the goals you establish will be evaluated in relation to business outcomes. It is important to establish key performance indicators (KPIs) that are based on both the targeted results and the organization’s own definition of innovation. (Is it new inventions? Incremental or transformational change? Value-driven or research-driven? and so forth.) This is not necessarily done at the individual project level, but rather can be for the overall innovation initiative. These measurements