Innovation management

Innovation management is a combination of the management of innovation processes, and change management. It refers both to product, business process, and organizational innovation.

Innovation management includes a set of tools that allow managers and engineers to cooperate with a common understanding of processes and goals. Innovation management allows the organization to respond to external or internal opportunities, and use its creativity to introduce new ideas, processes or products.[1] It is not relegated to R&D; it involves workers at every level in contributing creatively to a company's product development, manufacturing and marketing.

By utilizing innovation management tools, management can trigger and deploy the creative capabilities of the work force for the continuous development of a company.[2] Common tools include brainstorming, virtual prototyping, product lifecycle management, idea management, TRIZ, Phase–gate model, project management, product line planning and portfolio management. The process can be viewed as an evolutionary integration of organization, technology and market by iterating series of activities: search, select, implement and capture.[3]

Innovation processes can either be pushed or pulled through development. A pushed process is based on existing or newly invented technology, that the organization has access to, and tries to find profitable applications for.

A pulled process is based on finding areas where customers needs are not met, and then find solutions to those needs.[4] To succeed with either method, an understanding of both the market and the technical problems are needed. By creating multi-functional development teams, containing both engineers and marketers, both dimensions can be solved.[5]

The product lifecycle of products is getting shorter because of increased competition. This forces companies to reduce the time to market. Innovation managers must therefore decrease development time, without sacrificing quality or meeting the needs of the market.[4]

Innovation management

Innovation management is based on some of the ideas put forth by the Austrian economist Joseph Schumpeter, working during the 1930s, who identified innovation as a significant factor in economic growth.[6] His book “Capitalism, Socialism and Democracy” first fully developed the concept of creative destruction.

Innovation management helps an organization grasp an opportunity and use it to create and introduce new ideas, processes, or products industriously.[1] Creativity is the basis of innovation management; the end goal is a change in services or business process. Innovative ideas are the result of two consecutive steps, imitation and invention.[7]

By utilizing innovation management tools, management can trigger and deploy the creative capabilities of the work force for the continuous development of a company.[2] Common tools include brainstorming, virtual prototyping, product lifecycle management, ideation, TRIZ, Phase–gate model, project management, product line planning and portfolio management. The process can be viewed as an evolutionary integration of organization, technology, and market, by iterating series of activities: search, select, implement and capture.[3]

Innovation processes can either be pushed or pulled through development. A pushed process is based on existing or newly invented technology that the organization has access to. The goal is to find profitable applications for the already-existing technology. A pulled process, by contrast, is based on finding areas where customers' needs are not met and finding solutions to those needs.[4] To succeed with either method, an understanding of both the market and the technical problems are needed. By creating multi-functional development teams, containing both engineers and marketers, both dimensions can be solved.[8]

Innovation, although not sufficient, is a necessary prerequisite for the continued survival and development of enterprises. The most direct way of business innovation is through technological innovation, disruptive innovation or social innovation. Management of innovation, however, plays a significant role in promoting technological and institutional innovation.

The goal of innovation management within a company is to cultivate a suitable environment to encourage innovation.[9] The suitable environment would help the firms get more cooperation projects, even ‘the take-off platform for business ventures’.[9]:57 Senior management's support is crucial to successful innovation; clear direction, endorsement, and support are essential to innovation pursuits.[10]

Managing complex innovation

Innovation is often a technological change that outperforms a previous practice. To lead or sustain with innovations, managers need to concentrate heavily on the innovation network, which requires deep understanding of the complexity of innovation. Collaboration is an important source of innovation. Innovations are increasingly brought to the market by networks of firms, selected according to their comparative advantages, and operating in a coordinated manner.

When a technology goes through a major transformation phase and yields a successful innovation, it becomes a great learning experience, not only for the parent industry but other industries as well. Big innovations are generally the outcome of intra- and interdisciplinary networking among technological sectors, along with combination of implicit and explicit knowledge. Networking is required, but network integration is the key to success for complex innovation. Social economic zones, technology corridors, free trade agreements, and technology clusters are some of the ways to encourage organizational networking and cross-functional innovations.

Innovation management tools

Antonio Hidalgo and Jose Albor proposed the use of typologies as an innovation management tool.[11] The study conducted at a European level used 10 typologies for knowledge-driven Innovation Management Tools. These typologies were found by looking at 32 characteristics [12] that classify Innovation Management Tools. Hidalgo and Albors were able to narrow the list down to 8 criteria (knowledge-driven focus, strategic impact, degree of availability, level of documentation, practical usefulness, age of the IMT, required resources for implementation, measurability), that are especially relevant for IMTs in the knowledge-driven economy (knowledge economy). The advantage of using typologies is the easy integration of new methods and the availability of a broader scope of tools.

The final typologies proposed are the following:

IMT typologies methodologies and tools
Knowledge management tools knowledge audit, knowledge mapping, document management, intellectual property rights management
Market intelligence techniques technology watch / search, patent analysis, business intelligence, CRM, geo-marketing
Cooperative and networking tools groupware, teambuilding, supply chain management, industrial clustering
Human resources management techniques teleworking, corporate intranet, online recruitment, e-learning, competence management
Interface management approaches research and development - marketing interface management, concurrent engineering
Creativity development techniques brainstorming, lateral thinking, TRIZ, S.C.A.M.P.E.R method, mind mapping
Process improvement techniques benchmarking, workflow, business process re-engineering, Just-in-Time
Innovation project management techniques project management, project appraisal, project portfolio management
Design and product development management tools computer-aided design, rapid prototyping, usability approaches, quality function deployment, value analysis
Business creation tools business simulation, business plan, spin-off from research to market

Criteria for selection of tools: IMTs that were sufficiently developed and standardized, that aimed to improve the competitiveness of firms by focusing on knowledge and that were freely accessible on the market and not subject to any copyright or licensing agreement.[12]

See also

References

  1. 1 2 Kelly, P.; Kranzburg M. (1978). Technological Innovation: A Critical Review of Current Knowledge. San Francisco: San Francisco Press.
  2. 1 2 Clark, Charles H. (1980). Idea Management: How to Motivate Creativity and Innovation. New York: AMACOM.
  3. 1 2 Tidd, Joe; Bessant, John (2009). Managing Innovation: Integrating Technological, Market and Organizational Change 4e - first ed. with Keith Pavitt. Chichester: Wiley.
  4. 1 2 3 Trott, Paul (2005). Innovation Management and New Product Development. Prentice Hall. ISBN 0273686437.
  5. ↑ Boutellier, Roman; Gassmann, Oliver; von Zedtwitz, Maximilian (2000). Managing Global Innovation. Berlin: Springer. p. 30. ISBN 3-540-66832-2.
  6. ↑ Scocco, Daniel (29 July 2006). "Innovation and Schumpeter’s Theories". Retrieved 2014. Check date values in: |access-date= (help)
  7. ↑ Godin, Benoît (2008). "Innovation: the History of a Category". Project on the Intellectual History of Innovation.
  8. ↑ Boutellier, Roman; Gassmann, Oliver; von Zedtwitz, Maximilian (2000). Managing Global Innovation. Berlin: Springer. p. 30. ISBN 3-540-66832-2.
  9. 1 2 Rickne, Annika; Laestadius, Staffan; Etzkowitz, Henry (2012). Innovation Governance in an Open Economy: Shaping Regional Nodes in a Globalized World. United States and Canada: Routledge.
  10. ↑ Wong, Stanley Kam Sing (2012). "The role of management involvement in innovation". Management Decision. 51 (4): 709–729.
  11. ↑ Hidalgo A.; Albors J. (2008). "Innovation management techniques and tools: a review from theory and practice". R&D Management.
  12. 1 2 European Commission (2004). Innovation Management and the knowledge-driven economy (PDF). Luxembourg: Directorate-general for Enterprise.

Further reading

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