The Why, What and How of Innovation Management

The Why, What and How of Innovation Management

Are you interested to foster innovation in your organization? Have you figured out what it takes to organize, motivate, lead and create innovative product? These are some of the essential question you should ask before partaking any effort towards innovation. If you dislike process, this would be a rude awaking.

Developing and nurturing creative ideas to realize a commercially viable product that gives competitive advantage to your organization is a structured process. It begins with ability to foster the environment for intrapreneur and manage the ideates frenzy that ensue. It’s not all fun and games. In fact, transformational innovation is a brutal "two steps forward three steps back" process that is an everyday gut check (Viki, 2017). Innovation is not about generating creative ideas rather using it to build an economically viable product that create distinct market advantage. One distinction between innovation and traditional product development approach is later brings market product fit concept to develop the product while former is about creating distinct product concept and validating it afore hand to create market disruption. Like it or not innovation is a process management that encompasses many tangents of work: innovation typology, strategy, knowledge and project, technology and product Management. In other words, innovation management is a structured approach of decision, activities and practices that move an idea to realization for the purpose of generating business values.  

Why Innovation Management Matters?

Simply put innovation management is critical to long term success of your business and essential part of sustainable business model. Dupont, 3M, GE and P&G, what makes them stands out? Product? Yes. Great people? Sure. Leaders? Perhaps. But if you dig deeper, there is something common that makes these organization outstanding: innovation management.

  • Since its inception in 1900 to till date, Dupont’s innovation management is a continuous process. For example, its expanded its product portfolio by developing new products to meet customer needs, including nylon, polyester, Teflon, Lycra and Sorona etc. Dupont able to achieve its sustainable business model through rigorous focus on innovation and managing innovation to be competitive. 200 years on and Dupont continue to thrive.
  • Similarly, 3M has a longterm tradition of innovation, established by its early leadership, allows it to continue to grow, adapt and change. The company is moving rapidly into the “new economy” by continuing to embrace principles that reinforce innovation (Coyne, 2001).
  • Despite it’s recent challenges, GE continued to be one the most successful corporations in the world. It remained in original Dow Jones Industrial Average in 1896 till June, 2018. Its survival and continued growth over 100 years speak volume. Since it’s inception in 1892, General Electric has had a focus on product innovation that has been a key component of its success. The firm’s commitment to innovation and relentless focus of managing innovation has remained remarkably consistent over time.
  • Proctor & Gamble (P&G) is 40th biggest and 84th innovative company in the world. It is touted one of the most successful company that fostered “Open Innovation” also known as “crowdsourcing” or “co-creation”. Open innovation is a way for companies to utilize the ideas and strength of the people outside their organization to make improvements in the internal processes or products. 35% of P&G’s product has elements that are generated from outside of P&G.

As these examples shows, innovation management has long lasting competitive advantage and fundamental to sustainable business growth. It is no longer the speed of business that creates challenges, it is disruption that forcing business to rethink how they operate. It is the speed of disruption that getting business to realize their current model may not be sustainable.

Tradition of Innovation at 3M

3M’s century old history has been marked by twists and turns that no one could have predicted. 3M did not foresee those changes, but the organization set up an infrastructure and tradition to allow these changes to occur. The company has welcomed change: to adapt, to transform at a steady and fairly rapid pace. In fact, it is an expectation at 3M that it will derive 40 percent of sales from products that have been introduced in the past four years. And each year, 3M also expects to derive 10 percent of sales from products introduced that year. Rather than relying on the discoveries of past, the organization created a tradition to continuous disruption with intention to live on what it has found most recently.

Because of this tradition of innovation, leaders at 3M do not have to make conscious decisions at every step in the development of a process or technology. People know in their bones what is expected of them and how they should proceed. The outcome is a swift response to challenges. When 3M came up with a new super-weak adhesive that allows for repositionable Post-it® Notes, 3M’s tradition showed helped it how to bring a new product to new market. The same tradition guided and encouraged 3M to create multilayer optical films and market this break-through product (Cyone, 2001).

So, how did 3M create such a tradition?

  • Vision: To begin, organization needs direction or vision. What are you changing into and why? You are probably trying to transform your organization into something that hasn’t been seen before; hence, you need vision compelling enough to calm fears of investors and employees who will be participating in this momentum for change.
  • Meeting Customer Needs: You are changing to disrupt market, fine; but the irony is that you are building something that need to be economically viable and meet customer expectations and demands. If you have developed something only to find out customers wants something else, it is doesn’t do any good to your initiative.
  • Empowering People: Transformation is a group process, employees should be encouraged and empowered to make their own changes to achieve the goal.  If you control the evolution cell by cell, it is not going to succeed. Around half a century ago, 3M chairman William McKnight said that growth required people with initiative and that those people would make mistakes—but their mistakes would be less costly than the mistakes that came from dictatorial managers (Cyone, 2001). Today, Mcknight’s wisdom still resonates with many at 3M and has been confirmed by their experience.
  • Recognition and Appreciation: People have psychic needs of feeling good when they believe their contribution is making difference and that they are appreciated by peers. 3M provides that recognition through various programs, e.g. peer-nominated award programs and corporate technical “hall of fame” etc.
  • Vigorous Steps to achieve goal: A good leader knows how to setup a goal and create right vigorous pace to achieve it. For example, you could set an aggressive sales targets for the newly developed product.
  • Communication and Sharing: Communication and sharing is imperative in innovation. Inventions need to be fully exploited. People may have varied idea as to how such inventions can be exploited to create different products and services. At 3M, employees know that products development and profits are assigned to the business unit. But technologies belong to everyone in the corporation. 3M researchers also know that career advancement comes faster for those who contribute to product advancements in several business units. 3M facilitate the culture of communication by bringing together employees cross functionally to get them talking about problems and obtain great results. This is how 3M discovered the optical opportunities in multilayer films and other products.

Resist the urge to control

There is a natural tendency towards controlling the situation when something does not go right or hide. Like people, organization needs to the difference between self confidence and sheer arrogance. Good Leaders should be able to question their own judgement and knowledge. Do not fall in love to yourself; there are things that you do not know, let’s be open about it. Similarly, corporation need to question its own business model and adopt to new one as needed. Secondly, leaders should also question what customers tell them. While being very attentive to customers, leaders should also know that customers may not fully understands their needs and desires. It is about finding the finer balance. You need to develop the confidence that what you are building is economically viable and able to provide you competitive edge. Even if some apparently disruptive product undertakings end-up as a misstep, you should have faith that you ‘ll lend on your feet. Be bold and donot shy away from taking risk but surely make calculated judgement.

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