OE21 Guideline: 6.1d 

Innovation and Risk Management

Strategic Objective:

Pursue strategic opportunities that are intelligent risks

Strategic Objective:

Allocate financial and other resources to high priority opportunities

Quality Objective:

Approved by: (Name) Chair, Leadership Focus Team (LFT)

Approved: MM-DDD-YY

Quality Objective:


Lead: Operations Focus Team (OFT)  Support: Other focus teams


  1. Helps evaluate strategic opportunities determined to be intelligent and worthwhile risks

  2. Helps allocate financial and other resources (e.g., people, material, equipment) to prioritize and pursue strategic opportunities

  3. Provides tools for collection and analysis of categorized ideas to support innovation projects

  4. Provides for risk identification and mitigation in support of changes to products, services or programs 

  5. Provides additional tasks for Operations and Leadership Excellence Action Plans

  6. Provides suggested metrics associated with innovation and risk management projects



The organization has adopted the Baldrige Framework Item 6.1d Innovation Management, and 7.4b Strategy Implementation Results as the internal policy, including the following sub-items:


6.1d Innovation Management - The organization pursues strategic opportunities determined to be intelligent risks. The organization makes financial and other resources available to pursue these opportunities and discontinues pursuit of lower priority opportunities. 


7.4b Strategy Implementation Results - The organization tracks progress and outcomes of implementing its Strategic Action Plans. Where appropriate, the organization uses these results to build and strengthen its core competencies and to initiate new products, services or programs that may necessitate taking intelligent risks.


Standard 6.1d Flow Diagram (Figure 6.1d-1 Innovation Management)

6.1d Process Chart (Figure 6.1d-2 Innovation Management)

Inputs to 6.1d Innovation Management

  • Current list of any new opportunities, problems or solutions that would benefit from collecting useful ideas from appropriate responders 

  • Current list of organization Risks that are or could present barriers to accomplishing the organization's mission, vision, strategy and desired results

Measurement and Analysis Tools and Techniques

  • OFT_6.1d_Innovator (.xlsm) *macros - Caution: This spreadsheet file includes macros that may have require special IT security procedures. Note: This is the only OE21 tool with macros.  


Outputs from 6.1d Innovation Management


Case Study

  • Read the 6.1d Case Study

Implementation Instructions

Key Decision: The OE21 focus team responsible for this standard should begin by deciding whether or not the OE21 standard adds value (on is non-value added) when compared to any existing standard, SOP, or process the organization uses now. The decision process is:


1. The focus team studies all Tasks and tools used in the OE21 standard.

2. The focus team answers the questions:

  • NON-VALUE ADDED? Does the organization currently use a standard, SOP process that is deemed as better or essentially as good as the OE21 standard? If YES, then the focus team should document that this standard is deemed as NVA, and then the focus team should proceed ahead to the next OE21 standard.

  • VALUE-ADDED? Does the organization currently use a standard, SOP process that is deemed as better or essentially as good as the OE21 standard? If NO, then the focus team should proceed ahead to complete the following OE21 Implementation instructions.


Note: The NVA finding will be used later in the OE21 Certification Audit process.


Task 6.1d-1 - Review Organization Profile P.2 - The Leadership Focus Team (LFT) periodically leads the other focus teams in online or face-to-face "innovation sessions" aimed at identifying any new opportunities for innovation that might boost the value of the organization to its customers, stakeholders, workforce and the community. To prepare for the pursuit of opportunities for innovation, the LFT, CFT, and OFT review the current Organizational Profile P.2 (Organizational Situation), which documents the following:


a. Competitive Environment:


(1) Competitive Position - statement of the organization’s competitive position, including, relative size and growth in the industry or the markets served, and number and types of competitors.


(2) Competitiveness Changes - statement of critical changes, if any, that are affecting the competitive situation, including changes that create opportunities for innovation and collaboration, as appropriate.


(3) Comparative Data - statement of key sources of comparative and competitive data available from within the industry, including limitations, if any, affecting the ability to obtain or use these data.


b. Strategic Context - statement of key strategic challenges and advantages in the areas of business, operations, societal responsibilities, and workforce.


c. Performance Improvement System - statement of the key elements of the performance improvement system, including the processes for evaluation and improvement of key organizational projects and processes.


  • NOTE: Before, during or after periodic "innovation sessions" the Leadership Focus Team (LFT) invites and encourages all focus teams and members of the workforce to submit any improvement suggestions at any time they wish. Innovation is encouraged and rewarded as presented in OE21 Standard 5.2a Workforce Engagement and Performance (see High-Performance Rewards System).

  • PROGRESS: You have reached Milestone 1 (good work). Input the status [6%] on the organization's OE21 Intranet Main page alongside the title of this standard.


Task 6.1d-2 - Introduce New Opportunities - The Operations Focus Team (OFT) adds value to "innovation sessions" by introducing new ideas or opportunities that might improve the organization's products, services or key processes for design, production/creation, delivery and support of products, services or programs. These ideas or opportunities are presented to the Leadership Focus Team (LFT) for further analysis and decision making.


  • PROGRESS: You have reached Milestone 2 (good work). Input the status [19%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1d-3 - Apply Innovator to Evaluate Opportunities, Problems or Solutions - When necessary, the Operations Focus Team (OFT), supported by the other focus teams, will use the ACI-Innovator tool to gather ideas aimed at evaluation of innovation opportunities, including improvements to products, services or programs, or solutions to competitive environment problems and challenges. The ACI-Innovator provides a robust and rapid way to brainstorm with small or large groups of people.


Overview of the ACI-Innovator tool - The ACI-Innovator is a brainstorming tool used to collect and analyze improvement or new opportunity suggestions from subject matter experts who are familiar with the opportunity being suggested or evaluated.


  • OFT 6.1d Innovator Assessment (survey)

  • OFT_6.1d_Innovator (.xlsm) *macros


The OFT 6.1d Innovator is used to gather ideas for how to optimize key processes and to gather ideas for solving organizational problems or improving processes, products, or services. The "Innovator" process is fully documented in the ACI Innovator Instructions. To aide in learning the ACI Innovator process is explained as follows:


Step 1: Create a TARGET QUESTION for innovation responders, for example:
• What is causing our loss of hockey customers?
• What are the risks of not improving our hockey services?
• How should adult hockey services be improved?


Step 2:  EDIT INNOVATOR SESSION INSTRUCTIONS. Use the OFT 6.1d Innovator Assessment (survey) to deploy the target question to those who should respond to the target question. Login to Survey Methods (www.surveymethods.com), open the ACI-Innovator survey and edit the instructions for the session, as shown in Figure 6.1d-3 below.​


Figure 6.1d-3 ACI-Innovator Question Instructions (example)

Figure 6.1d-4 ACI-Innovator Target Question and input fields for Ideas and Category

Step 3: LAUNCH SURVEY. The OE21 Facilitator uses the Survey Methods controls to Launch the survey, using these guidelines:


  • Select Launch Method: Web URL Deployment


  • Allow Single or Multiple Responses: Allow survey to be taken multiple times from each computer


  • Skip the web greeting 


  • Redirect Respondent to surveymethods.com (default)


  • Launch - then copy the survey LINK and paste it into one of two options:

    • A web page on the organization's Intranet 

    • An email message sent to all responders

    • Notify responders that LINK is available and when their responses should be finished


Step 4: INPUT IDEAS. Input 1 to 10 ideas into the (center) column in response to the Target Question.


Each idea should be a short sentence with two to ten words. Examples:
• IDEA 1: Offer Hockey at times that customers want
• IDEA 2: Improve Restaurant food quality
• IDEA 3: Add night lights to keep the outside parking lot safe


Step 5: INPUT CATEGORIES.  Input a one or two-word CATEGORY into the (right) column. The category should communicate the main point of the IDEA. The first word of the category should be a noun (a person, place or thing).


The remaining word should be a verb (action or state of being).  Examples:


• IDEA 1: Offer Hockey at times that customers want
• CATEGORY: Hockey schedule


IDEA 2: Improve Restaurant food quality
• CATEGORY: Restaurant food


• IDEA 3: Add night lights to keep the outside parking lot safe
• CATEGORY: Parking safety

Step 6: When all ideas and categories are input, SUBMIT the survey (save it). 


Step 7: CLOSE SURVEY. Monitor the number of responses to the survey, and when sufficient responses are finished, the close the survey and export the results to an Excel file. 


Step 8: INSERT SURVEY RESULTS. Open the ACI Innovator tool and insert the Excel file from Step 6 into Cell A3 of the SM tab. Now all ideas and categories in response to the Target Question are inside the ACI Innovator spreadsheet model. While at the Cell A3 of SM tab, hit the macro keys (Ctrl C). This action sorts the ideas by their categories and places them inside the RESULTS tab. Open the RESULTS tab and view all ideas alongside their categories.


Step 9. SORT IDEAS BY CATEGORY. Sort the ideas by category. To do this go to RESULTS cell B2 and highlight all ideas and categories, then select SORT - BY CATEGORIES - A TO Z. This action sorts all ideas into their categories. The Results are now visible for further analysis as shown in Figure 6.1d below.


Figure 6.1d-4 Innovator RESULTS with sorted Ideas by Category

Step 10. RESULTS EDITING - It is unlikely that all responders will input their Category words as the instructions in Step 4 specify (e.g., a one or two-word CATEGORY should communicate the main point of the IDEA, the first word of the category should be a noun (a person, place or thing) and the second word should be a verb (action or state of being).  Examples:

• IDEA 1: Offer Hockey at times that customers want
• CATEGORY: Edit Schedules for hockey" to Hockey schedules


The Oe21 Facilitator should assist the focus teams in editing the category fields in the ACI-Innovator RESULTS tab as needed. After editing categories, repeat Step 8 "Sort-by-Category A-Z" process. 


Step 11. DRILL DOWN - Based upon the results of the first Innovator session, it is logical to select the most important ideas associated with one or more categories and create a new TARGET QUESTION for each major category. Then the previous steps are repeated, to collect a new set of ideas and categories. This discovery could lead to the discovery of the root causes of the problem and possible remedies for the problem. 


Example Target Questions for drilling down to (discovering) new opportunities for products or services to be added to the portfolio:


  • TARGET QUESTION 1 - Which of our services are causing us to lose the most customers?

(Suppose ideas and categories indicate the service causing customer loss is Adult Hockey). 


  • TARGET QUESTION 2 - What improvements should we make to our Adult Hockey services?

(Collect ideas and categories that provide suggestions for improving Adult Hockey services).


  • TARGET QUESTION 3 - How should we make major improvements to our Adult Hockey services?

(Collect ideas and categories that provide process changes that improve Adult Hockey services).


Use the ACI Innovator survey and spreadsheet tools to repeat DRILL DOWN sequences until sufficient information is available to create a Results Analysis Report. 


Step 12. RESULTS ANALYSIS REPORT - Transition from the alphabetical (A-Z) sort by category information provided into a structured Table of Contents for the RESULTS REPORT. The Results Report is the final product of the ACI Innovation process.  


Here is a suggested outline for the Results Analysis Report:


Title of Innovation Session: 
Lead Focus Team: (Either LFT, CFT, OFT, WFT)
Support Focus Team(s): (One or more focus teams)

Dates of Innovation Sessions: (Start date of the first session and completion date of the last session)


First Innovation Session (Problem orientation):
•    Target Question:
•    Responders: (who and how many)
•    Categories: list of categories that responders input in response to first Target Question


Second Innovation Session: (Solution orientation)
•    Target Question:
•    Responders: (who and how many)
•    Categories: list of categories that responders input in response to second Target Question


Third Innovation Session (Solution Process orientation)
•    Target Question:
•    Responders: (who and how many)
•    Categories: list of categories that responders input in response to third Target Question


Recommendations (who should do what and when)
•    Focus Team(s) Involved: (LFT, CFT, OFT, WFT or combination)
•    Actions Required: Base these on responses from the Innovation Sessions
•    Date to be completed: 


Who to contact about this Report: (Name, Position or Team Title, Email, Phone)

(End of OE21 Innovation Process)

  • PROGRESS: You have reached Milestone 3 (good work). Input the status [57%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1d-4 - Use ACI-Risk Manager to Evaluate Risks - In cases where the organization has alternative opportunities for innovation, the ACI-Risk Manager tool is used to rank and prioritize the risks associated with each opportunity.


  • OFT_6.1d_Risk_Manager (.xlsx)

  • ACI-Risk Manager Introduction: The Risk Manager uses impact and probability inputs to calculate risk ranking. The model also provides for input of plans for risk management or mitigation, responsibility, action plan start/finish dates, percent (%) of action plan completion and notes about "risk triggers." The example in Figure 6.1d-4 is based on an evaluation of alternative opportunities (ways) to improve an Ice Skating and Hockey Sports Center to make it better than competitors

Figure 6.1d-4 Risk Manager - left side (example)

Figure 6.1d-5 Risk Manager - right side (example)

Task 6.1d-4 (continued) - Use ACI-Risk Manager to Evaluate Risks - In Figures 6.1d-4 and 5, there are six opportunities for improving the Sports Center, and they all have associated risks. The  process is as follows:

  • OFT_6.1d_Risk_Manager (.xlsx)


Step 1: Input Risks in each row (Risk No., Responsible Team, Risk Title)


Step 2: Input estimated Time Frames associated with each risk (start to the end of the risk period evaluated)


Step 3: Input estimated Impact of each risk (1 to 5; 5 is highest)


Step 4: Input estimated probability (0 to 100%) that risk is likely to occur


Step 5: Observe Risk Ranking (formula in column I); if desired resort the risk rows by Risk Ranking (highest to lowest);  Figure 6.1d-4 shows that Risk A1 has highest ranking (4.5; colored red)


Step 6: Based on Risk Ranking and other inputs from the focus teams, the organization may decide to discontinue the pursuit of one or more of the lower-ranking risks.


Step 7: The alternative opportunities that are selected should undergo further analysis and risk elimination or mitigation plans; specifically:


  • Column J: Input Risk elimination or mitigation plans

  • Column K: Input responsibility for each plan

  • Column L and M: Input action plan start and finish dates

  • Column N: Input action plan percentage (5) of completion

  • Column O: Input essential notes

Step 8 - Implement Risk Elimination or Mitigation Plan(s)


  • PROGRESS: You have reached Milestone 4 (good work). Input the status [92%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1d-5 Update Operations Excellence Action Plan - The Operations Excellence Action Plan includes tasks aimed at improving a supplier and supply-chain performance and results. The Operations Focus Team (OFT) adds tasks, responsibilities and other information necessary to implement new initiatives as a result of this Supplier and Supply-Chain Standard.


  • OFT_6.1a_Operations_Excellence_Action_Plan (.xlsx) 


Task 6.1d-6 Input Product, Service or Program Innovation Metrics into PMS - Unless the organization has its Performance Management System, the OFT uses the Excel Workbook named:


  • OFT_7.1_PMS_Operations_Excellence_Metrics (.xlsx) 


As a minimum, the OFT selects, inputs and tracks the composite Assessment scores new innovations that drive the success of products, services or programs, including:


  • New Innovations Investments. The investment funds approved for new or improved products, services or programs, versus the target investment budgets for the year.   


  • Discontinued Products, Services or Programs. The Savings in costs of discontinued products, services or programs versus the target savings for the year.


  • Competitive Position Changes. The rankings of the organization's products, services or programs versus the top two competitors. This metric should take into account new innovations or discontinued offerings as they relate to the portfolio of products, services or programs. 


Task 6.1d-7 Input and Review Innovation and Risk-Related Metrics into PMS - Normally these measures are updated quarterly, or when changes require updates. The OFT takes timely and appropriate action to drive measures towards the goals. When performance goals are met, the OFT may raise the goals (targets) higher. See OE21 4.1 Task 4.1.5 for guidance.


Figure 6.1d-6 is an example Trend Chart for New Innovations Investments.

  • PROGRESS: You have reached Milestone 5 (congratulations). Input the status [100%] on the organization's OE21 Intranet Main page alongside the title of this standard.


Figure 6.1d-6 Example Trend Chart for 6.1d New Innovations Investment