Innovation management is a very interesting concept that can help firms get out of their comfort zone. Innovation is an omnibus of change agents. The fundamental objective of Innovation would be to introduce change into a process – a change that’s favorable, attainable, sustainable and rewarding. Innovation could be applied to most of the areas and businesses – a business unit, an idea, product, or service.
Innovation principally necessitates imaginative thinking, combined with the collection of relevant information and an initiative to acquire more significant benefits from available resources. Imagine you are the CEO of a company, and you are challenged everyday with thinking of something new. This would only be possible if you allow creativity in your business, challenging your limits every day. Innovation can mean invention, or enhancement; it all depends what is the end goal.
Exploration is the engine that drives innovation. Innovation drives economic growth. – Edith Widder
What really is the meaning of Innovation Management?
The first step is to understand what it means.
In simple words, it can be explained as the process where innovation is promoted in organizations including strategizing, planning, executing and managing it. In terms of business, it can be in line with the vision or mission of the company to gain a bigger market share, have better features or increase revenues.
Innovation management can include creation of a new idea, product, service or the enhancement of existing ideas, products or services. At the end of the day these three are aligned with the goals of the company.
Innovation management can be learnt using simple trainings, or more complicated planning and training. The most important concept in innovation management is allowing the businesses to act in a creative manner to reach the goals. There are frameworks that can help your business, but since we are living in an agile world, innovation management also is about experimentation. You might have to adjust frameworks to your industry or company.
A very simple cycle can have the following five stages:
Evaluation of Ideas
This is the first step where ideas are generated using different brain storming techniques, looking at feedback from the customers, or trying to understand the requirements. An example could be a business needs to form a new business unit. To do this, they would look at competitors, or think or new product ideas from pain points of their customers.
Validating ideas can be critical, this includes understanding the market worth, the expected return (financial or others), the investment needed, the effort, yields, and what will happen if that is not done (risk analysis). Some techniques of prioritization might be mandatory to see which one to execute first.
Execution or sometime referred to as prototyping or creation of a Proof of Concept. This can really help your business to have a first minimum viable product or even a business unit based on existing resources to see if there is a good need or demand. This can be used as an opportunity to adapt to the pain points of the business.
This is the process of letting customers use the product, or letting a business unit generate its own revenue to see how well it can perform. In addition, it can also help you understand further improvements that can be done to meet the goals.
This is the stage when it is planned to launch and scale up the product. The key here is focusing on scale-able models.
Why would a business need Innovation Management?
Imagine if your competitor with a super car, and you have a car that only can go 40 kmph and you are supposed to beat your competitor in a straight race of 200 meters. It is impossible that you would be able to win, unless the competitor does not know how to drive a car. However, if we change this scenario, and give same resources to you and the competitor, there is a higher probability of you building a better super car if you allow innovation.
It is important to understand why is innovation management important, some of the reasons could be:
- It could allow the mapping of innovation process. This could be a map, a summary or the bird’s eye view of the entire innovation process and help better management for innovating in the innovation management process. At the end of the process, it can be mapped to how it helps with the overall big picture of the business goal.
- Innovation management can also help you forecast market conditions, like how would an industry develop, what are the upcoming changes, disruptions, or be a disruptor, predict the changing client tendencies. Imagine this to be the toolkit that would help you know what can your customer expect in a month or a year.
- It encourages employee engagement, this would let employees bring the best to the table knowing that they would be given an opportunity and their ideas would come to life. This would also enhance the communication between the entire company.
- The introduction of innovation management can help with an increase in revenue and also allow your business to think of more revenue streams by mastering the process of innovation.
- This can also streamline the idea workflows, i.e. if a new idea comes, there are KPIs that can allow the measurement of what would the expected output be, and the required investment.
- There can be external factors as well including introduction of new competitors in the market, changing business environments.
- Technology has become an integral part of our daily lives, and this contributes to the requirement of innovation management processes as well.
Key Aspects of Innovation Management and Culture
There are some factors that do need to be looked into when talking about innovation management. These include:
This is the actual infrastructure of the company, of things like does the business have an innovation lab, innovation unit, a research unit, an online portal to support innovation communication and management.
Feedback can be a key aspect for innovation management process, if the feedback is understood, used, and integrated, it can help firms foster innovation.
This is the employee’s reaction to being more open to trying and experimenting new ideas, brainstorming and proposing new ideas for going to the bigger picture.
This includes the technical skill set needed, the skills needed to implement an innovation management process, or mastering innovation
Does the current hierarchy of business support innovation management? This is extremely important because if a business management does not support innovation management, they might not fuel the innovative ideas.
The business strategy also plays a good role in innovation management, innovation can help businesses be more strategic and also achieve the strategic objectives. This can also help understand where to put innovation management to work.
Why Call it Agile Innovation Management?
Innovation and experimentation are two words that go hand in hand. How exactly does innovation management become agile? Looking back at the process, building the Proof of Concept needs to be as quick as possible instead of taking years to build a first 100% running product. An MVP can save a lot of money and validate if there is a need for it or no. Using Agile methods, it would be better and easier to have a prototype faster, and allow for mistakes and rapid enhancements. Ensuring that your innovation management is agile would help you accelerate the time to market, help you deliver smaller features to customers.
Is there really a strict process for Innovation management?
Consider innovation management to be the catalyst for innovation, it would help accelerate the process and also promote innovation in the teams and engage all stakeholders. This definitely does not mean that once a process is defined, it can not be changed. Innovation management has a lot of scope to be updated to enhance it for the better. This comes from experimentation from the agile world of project management. However, having a good implementation would help you achieve better results, and the steps in the process of innovation management can always be reviewed and improved. The goal with agile innovation management is to come up with an idea, and have it evaluated and validated to see it there is a market.
Does this mean there is a need to set extremely high goals? No, innovation management does not mean that disruption is the only way to go. It means that the business is interested in creating a process that will allow creativity and enhancements in products, business units, businesses, and services.
In a conclusion, innovation management can help businesses by enhancing, inventing new services, products, business units, or even complete businesses. Consider it to be an investment for the future.