The New Rules of Managing Innovation

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Wisdom is learning from the mistakes of others. Leading innovators like P&G are wisely leading this trend. In Innovationland, wisdom always wins.

• Trend No.3: Social Media as an Innovation Tool

While many have been collecting friends on Facebook and followers on Twitter, we've been enthusiastically watching social media's rise as an effective innovation tool. Innovation is about insights, ideas, and communication. Online communities are often a perfect place to find and test insights. Online influencers are redefining the focus group. Best yet, when your online influencers help you create new products, services, or business models, they become instant ambassadors of your brand, creating the spark effect that eludes so many companies.

Here's the kicker: The emergence of social-media tracking tools give researchers and marketers alike a bevy of instant information to optimize targeting, messaging, and new product ideas. If you are a left-brained innovator, life is good. If you are not taking advantage of social media, you are missing an opportunity to create and launch better ideas faster.

• Trend No.4: War Games

CEOs are increasingly asking us for the fastest way to create revolutionary change within their companies. Typically the request is rooted in their greatest fear: "what if I am missing something that is going to put me out of business?"

The rapid pace of new technology has made leaders painfully aware that it is now possible for an upstart to change the rules of the game virtually overnight. Think Orbitz. think Dyson. think eBay (EBAY). (If you believe that Sears was worried about eBay 15 years ago, well you're forgetting that there was no such thing as EBay 15 years ago.) Think Craigslist.

Growing out of this worry of being made obsolete is a closely guarded secret and a new trend in innovation: the use of war games.

In the past, war games have been an internal exercise, usually a modification of the popular SWOT (strengths, weaknesses, opportunities, threats) analysis. But what would happen if you paid a team of really smart people who knew virtually nothing about your industry to take an objective crack at building a product, service, or business model that would rock your world? What if these people used a rigorous innovation process and had access to all research and direct contact with every department head?

We call this Innovation War Games and it is exactly what more and more CEOs are secretly doing today. Worst case scenario: They sleep better at night. Best case, they are presented with an industry-changing idea that they can launch if they choose.

In order for your organization to capitalize on these trends will require you to ground them in a deep feeling of activism, meaning that every element of the process is rooted in a body of people who have such a passion for new idea, that they will find a way to get it done.

Your job as a manager will be to serve as a catalyst and coach, keeping everyone focused on the end goal (as opposed to the greater glory of their own department) and making sure you are doing whatever it takes to overcome the powers/inertia that hold back innovation.

G. Michael Maddock is founding partner, and Raphael Louis Vitón is president, of Maddock Douglas, a company that invents, brands, and markets products "for companies driven by innovation" .

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