Innovations are a part of the day to day process in organizations. Creating changes externally and then trying to graft them internally many times causes a disconnect between research and operation which makes innovation management essential for organizations, said John Halamaka on Straight Talk, a thought leadership platform for senior technology leaders.
Whereas Gartner defines it as a business discipline that aims to drive a sustainable and effective innovative process or culture in an enterprise. The innovation management initiatives are focused on the disruptive transformations that change the business in a significant manner. This discipline harnesses ideas and utilizes them to build a steady conduit of reliable, consistent, repeatable and profitable innovations.
Innovation management has various definition according to the requirement of the industry. However, the bottom line for enterprises is how well they can implement it in their business model. Below are some important pointers to be kept in mind before focusing on innovation management.
Classification of Innovation Management
The implementation of a new significant method that improves production or delivery methods is known as process innovation. Henry Fords assembly line innovation is a perfect example of process innovation.
Introduction of services or goods that is new and improved concerning its uses and characteristics. The Apple iPhone, wrinkle-free fabrics, wearable tech are some of the great examples of product innovation.
Implementation of new marketing strategy that requires significant changes in design, packaging, pricing or promotion of the product. IKEA’s catalogue app is a good example of marketing innovation.
Implementation of a new method in undertaking any business practice, new workplace or in external relations.
How to Efficiently Manage Innovation
To bring a substantial change that will generate good customer value, a well planned and designed framework needs to be in place. Enterprises need various innovation management processes to respond to internal and external opportunities and leverage its possibilities. Investment in innovations should be a key component in the enterprise budget.
Innovation management is not just about focusing on research and development. It helps in channelizing various inputs from employees throughout the organization. Major organizations often have multiple innovation models, which are hard to implement due to economic roadblocks. There is no single approach towards different innovative models. However, in one of its research papers Deloitte presented a flowchart for implementing a successful program in four steps:
To perfectly utilize innovation management every enterprise must have an answer to these questions
How to identify a new idea
Getting the employees to find exciting and feasible alternatives is what internal innovation is all about. It helps in reducing employee turnovers and streamlining various operations.
- Employees can come up with exciting ideas to help in better sales and improve levels of productivity, collaborations and customer experience
- External innovations in the form of mergers, acquisitions, social listening and consumer crowdsourcing can also provide value to the business
How to evaluate the idea
Assessment of ideas must be done on customer benefit, feasibility, market potential and strategy to add business value. Good ideas have a high and substantial impact; they also require low investments and little effort. One can utilize an idea evaluation matrix and apply it to the ideas rigorously for better benefits. It is also important to enrich ideas after their collection.
How to implement them
Execution of an idea in its best form is the most important step. Enterprises must design a culture that motivates their workforce and promotes innovation. Good leaders determine and remove roadblocks, reinforce the commitment, manage accountability and create an environment necessary to enhance creativity.
For the execution of ideas innovation, consultants can help in developing business plans, marketing strategies and help in analyzing competitors and customers for developing an innovative roadmap for success.
How to measure its impact
It’s important to monitor and evaluate outputs of the idea at different stages. The organization capability metrics, ROI metrics and leadership metrics can help in measuring innovation drivers.
Arthur D Little a management consultancy suggests organizations to deal with four vital components in measuring the impact of innovation. They are:
- By designing a business-oriented framework
- Measurement in relation to competitors and innovators in the industry
- Utilization of KPI dashboards
- Using KPI framework for day to day management of the organization
Vijay Govindarajan, a professor at Tuck School of Business States that, the real innovation journey lies beyond the idea. It lies in long, hard journey – from imagination to impact.
Organizations around the world now continue to struggle between experimentation and efficiency, in gaining long-term and short-term revenues. For customizing innovation enterprises should create special teams to deal with these unique tasks. Only through proper innovation management can an organization succeed in this ever-changing business world.