INNOVATION is viewed by most businesses as the key to their competitiveness and something they should aspire to achieve. However, innovation is also poorly understood and should be viewed as a process to be systematically managed.
‘Innovation’ has become something of a buzzword in business circles, but it is also one of the least understood and most abused words in the English language. Innovation is about the creation or invention of something new or different, but it is not just about technology.
Research into the process of managing innovation within a business suggests that at least seven things need to be considered. The first is the inputs of people, ideas, equipment, time and money that are needed get any meaningful innovation program up and running. Without a willingness to invest in innovation a business cannot expect it to happen in any meaningful way.
The second thing that must be considered in the management of innovation is the management of knowledge. Creativity is the foundation of innovation, but without discipline creative thinking is of limited commercial value. Businesses must systematically manage the process of ideas generation and the capture of good ideas and their dissemination throughout the firm into appropriate areas where they can be turned into useful actions.
The third consideration is the development of an innovation strategy, or at least the alignment of innovation activity to the firm’s broader business strategy. Great ideas will be more readily generated if there is strong and effective strategic leadership within the business that articulates the importance of innovation, defines it and energises the workforce to embrace it. Without this, strategic leadership calls for more innovation within the organisation will be little more than hot air and wishful thinking.
The fourth element is the ability to foster within the business a culture of innovation and a structure that is supportive. Innovation is best fostered in an environment where there is tolerance of calculated risk taking and failure and recognition that, without risk, there can be no innovation. The culture also needs to encourage creative thinking, but within a commercially disciplined context. It is also best to drive such discipline via a structure of project teams that have clear goals, appropriate levels of support and resources, as well as sense of ownership over the outcomes.
The fifth element is the need for the business to manage its innovation projects as a portfolio of strategic investments that have well-defined key performance measures that balance the risk and return to the time and money invested. In this way, managers can be held to appropriate deadlines and performance benchmarks, and the organisation can monitor its innovation portfolio in a strategic manner.
The sixth consideration is the need for the business to develop skills in the effective management of innovation projects. Managers and team leaders need to be trained and equipped with the necessary tools and knowledge to manage what are often risky and uncertain projects in which continuous problem solving and invention is key to success. These skills are not commonly developed within managers and employees, who are generally taught to follow strict processes and avoid making mistakes.
Finally, the seventh element is the challenge of commercialisation of the innovation. In the case of a new product or service, this will require the business to systematically address such things as the need for market research, market testing and evaluation, the development of a business case and then the planning and implementation of marketing and sales activities designed to get the innovation into the marketplace. For process innovations and those associated with administrative or marketing innovations, there is still the need for a well-considered implementation plan that will sell the idea into the organisation and ensure that it is adopted.
As you look at your own business ask the following questions.
• Do you value innovation and if so can you define it and use that definition to engage others?
• Has your business systematically addressed these seven areas of innovation management?
• What is the opportunity cost to your business of not treating innovation as a process to be managed?