Introduction to Innovation Management

Introduction to Innovation Management

• Innovation management is about finding the best solution to consistently manage a process.
• It involves adapting methods to specific circumstances and is a learning process.
• It is the search for effective routines.
• It involves managing the learning process to deal with innovation challenges.

What is Innovation?

• Innovation is an idea, practice, or object perceived as new by an individual or group.
• It's the use of new knowledge to create products or services desired by customers.
• Innovation is the combination of invention and commercialization.
• It involves the discovery, development, improvement, adoption, and commercialization of new processes, products, and organizational structures/procedures.

Characteristics of Innovation

• Innovation involves changing an object, product, process, or lifestyle.
• Innovation varies in extent or magnitude.
• It's closely connected with problem-solving; implementation of ideas often faces challenges.
• Innovation's impact is a measure of its significance or range of effects.

Invention vs. Innovation

Why Innovate?

• Organizations need to innovate to survive in a turbulent and rapidly changing economy.
• Failure to innovate leads to a serious threat to survival.
• Innovation allows organizations to adapt to economic changes.

Goals of Innovation

• Improve quality
• Create new markets
• Extend the product range
• Reduce labor costs
• Improve production processes
• Reduce material use
• Reduce environmental damage
• Replace products/services
• Reduce energy consumption
• Adhere to regulations

Sources of Innovation

• Organizational Structure: Organic structures (low vertical differentiation/formalization/centralization) positively influence innovation by facilitating flexibility, adaptation, and cross-fertilization.
• Management Tenure: Long-tenured managers provide legitimacy and knowledge, aiding in accomplishing tasks and achieving desired outcomes.
• Slack Resources: Having abundant resources allows organizations to absorb failures and costs associated with implementing innovations.
• Inter-unit Communications: Innovative organizations effectively utilize committees, task forces, and cross-functional teams to encourage interaction across departments.

Types of Innovation

• Product & Process Innovation
• Open & Closed Innovation
• Incremental & Radical Innovation
• Modular and Architectural Innovation

Product & Process Innovation

• Product and process innovations are categorized as having high or low rates of major innovation at varying stages of development (fluid, transitional, specific).

Open & Closed Innovation

• Closed innovation involves internal innovation.
• Open innovation involves acquiring external technologies.

Incremental Innovation

• Incremental improvements to existing processes/inputs to achieve higher output levels.

Radical Innovation

• Radically displacing legacy technologies/processes.
• Introducing improvements for high-use cases/high-end markets.
• Gradually works its way down to low-end use cases/low-end markets.

Architectural Innovation

• A change in product structure.
• This can be seen by changing components of a car (e.g., replacing the steam engine).

Modular Innovation

• A change in component technology, such as switching between an engine.

Innovation Process

• Recognizing/scanning the environment
• Aligning the overall business strategy to innovation
• Acquiring technology externally
• Generating technologies internally
• Exploring & selecting responses to the environment
• Executing and implementing innovation
• Learning from and improving the process
• Developing the organization

Levels of Innovation

• National level: Government policies & support
• Enterprise level: Enterprise policies, support, and initiatives
• Individual level: Individual and group innovation activities

Innovation Occurs over Time

• Search-Select-Implement-Learn

Value Innovation (VI)

• A prominent approach to innovation.
• Focuses on providing superior buyer value in existing markets to create new markets.
• Differentiates from technology innovation; success depends on value for mass buyers.

Organizational Process for Innovation Management

• Setting reasonable expectations and stretching the business definition
• Building partnerships and alliances
• Effectively building business models
• Listening to customer feedback
• Designing open markets for ideas, capital, and talent
• Paying innovators well

Challenges Faced While Managing Innovation

• Questioning the need for change
• Determining what aspect to change (product/service, processes)
• Acknowledging common challenges with partial innovation understandings
• Creating a culture focused on innovation processes.

Continued Challenges

• Continuous Learning: Businesses must continually adapt routines for dealing with environmental challenges.
• High Involvement: Higher levels of participation result in competitive advantages.
• Connections: Organizations must cooperate with others rather than work in isolation.

Barriers to Innovation

• External: Market-related barriers, government policies, technical/societal/inter-organizational pressures.
• Internal: People-related issues; structural or strategy-related constraints.

Key Individuals for Effective Team Working

• Promoters, champions, and other individuals who support innovation.
• Use of teams at cross-functional and organizational levels.
• Investment in team selection and building.

Continuing and Stretching Individual Development

• Educating and training employees to improve skills and competence.

Extensive Communication and Creative Climate

• Extensive communication within and outside the organization
• Positive approach to creative ideas, supported by motivational systems
• High involvement within and outside the organization is needed
• Proactive experimentation and knowledge capture/dissemination

Conclusion

• Enterprises should emphasize planned control systems with flexibility and respect for individual initiative and personal growth.
• Accepting tolerance for mistakes allows room for innovative failures.

Continuous Innovation Loop

• Assessment of innovation management capabilities
• Problem identification processes
• Idea creation and selection
• Project/portfolio management
• Implementation roadmap

This quiz covers the key concepts of innovation management, including its processes, characteristics, and the nature of innovation itself. Participants will explore how effective routines and problem-solving are integral to managing innovation challenges. Dive into the definitions, real-world applications, and the significance of innovation in creating value.