11/20/2012 12:02 pm ET Updated Jan 20, 2013

How to Focus Your Innovation Pipeline

Innovation is a concept that both thrills and terrifies organizations.

The word sounds great in ads and speeches. But in practice, innovation is often undisciplined, leading to erratic results and epic second-guessing. I'm reminded of Chuck Jones, Warner Brothers' famous animator, who said "Anxiety is the handmaiden of creativity."

When I help clients build futureproof brands, I take a hard look at their innovation pipeline -- their plans for what they're going to launch into market today, tomorrow, and five years from now. The first thing I analyze is how well their innovation plans answer both deep consumer insights (what folks really need today, and will need tomorrow) and the company's sense of purpose (why we exist, and what we're expert at).

Built on a foundation of insights and purpose, a carefully orchestrated innovation program can do more to build the company's brand than any ad campaign. Consider the ongoing brand power of Apple's iPod/iPhone/iPad, or Toyota's Prius.

A modest blog isn't the place to map out the construction of an entire innovation pipeline. Instead, I'd like to focus here on incremental innovation -- ideas that can help you get extended life from your existing products.

Hone What You Do Best -- The UPS Story

One company that is tweaking its existing services with great success is UPS. Peter Harris, Director of Sustainability at UPS for Europe, the Middle East and Africa, shed some light on UPS's successes and challenges in a recent conversation.

Harris, who is speaking on this subject at the upcoming Sustainable Brands conference in London, believes innovation needs to answer a financial, environmental, and business ecosystem agenda. "Clearly, innovations that aren't financially or environmentally sustainable won't work. But it's also important to consider how our new ideas will work within the structure of our existing customer and supplier relationships."

Harris points to UPS's experiment with barge shipping at the London Olympics and Paralympic Games. Instead of shipping furniture and large items overland, the organization contracted with barge companies to bring them up the river Thames.

The environmental benefit seemed clear, as did the projected cost savings. In reality, though, the underdeveloped infrastructure for commercial barging on the Thames made the venture costly and less environmentally beneficial than believed. As a legacy project it succeeded. But as an immediately attractive innovation, it didn't.

An Innovation Pipeline Built On Efficiency

Harris believes honing the efficiency of UPS's current model is critical to setting the tone for future innovation.

As he says, "You have to make your conventional business model more efficient before you start adding bells and whistles."

He believes those efficiencies can be found inside, and outside the business. At UPS, for example, making the truck fleet run more efficiently involves more than internal initiatives like regulating how many turns the drivers make. It also includes tapping biofuels from organic and landfill sources.

"If we leave this stuff to rot, it creates twenty times the greenhouse gas than it would going out a tailpipe. And on a 'wheel to wheel' basis, biomethane creates 70 percent less greenhouse gas than an energy equivalent amount of diesel" Harris says. "Our argument to government is that we need to use this fuel where it isn't currently being used -- and where it can make a big difference. In transport trucks like ours, for example."

If this expansive perspective on efficiency sounds like innovation, so be it. To Harris, the most important thing is to stay keenly focused on honing the business. As he says, sustainability is about longevity. "We've been around for a hundred years. My goal is to help us thrive for another hundred."

Focusing Your Innovation Pipeline

What can we learn from Peter Harris and UPS?

1. Understand your business -- Too often, companies building an innovation pipeline veer off into attractive ideas that distract from the core business. These become costly distractions.
2. Hone the current business -- Ensure your business is running as efficiently as possible before searching for new opportunities. Don't ignore the opportunity in your own back yard.