INNOVATION MANAGEMENT

Innovation, innovation, innovation! Nowadays you can't have a business meeting without hearing this term. Innovation has been one of the most popular topics for the past years and especially the term “innovation management” is often mentioned in this context. But what is it really all about? In this article, we will cover the essential aspects of innovation management and answer the frequently-asked question “What is innovation manage-ment?” We will also shed light on the advantages and disadvantages of innovation management.

WHAT IS INNOVATION MANAGEMENT?

The term “innovation management” is hotly debated. Some people believe that something like innovation cannot be “managed”. Others, however, believe that it is absolutely possible to implement systems and processes that can create more innovation.

What the dictionary says about innovation management: “Innovation management is the management of innovation processes - starting with idea generation and planning and ending with the implementation and completion of a new product or business idea.”

KEY ASPECTS OF INNOVATION MANAGEMENT

Since virtually any new development in a company can be considered an innovation, it is difficult to understand what innovation management really means in practice.

The easiest way to understand the subject is to break it down and look at each of the key aspects related to innovation management separately.

The 4 key aspects of innovation management are:
- Innovation capability
- Innovation structures
- Innovation corporate culture
- innovation strategy

Innovation Management Board

INNOVATION CAPABILITY

This refers to the various capabilities and resources for creating and developing innovations.

The capability aspect mainly revolves around people, as innovation depends heavily on the skills of individuals and teams.

It primarily refers to the know-how and practical skills of individuals in a company.

However, it also includes areas such as technological resources, innovation methodology knowledge, and available capital, all of which may be required to create innovation.

Experience shows that if just one of these elements is not properly developed, innovation will struggle to take place in a company.

INNOVATION STRUCTURES

In practice, this refers to a company's organizational structure, processes and infrastructure.

The right processes can act as a multiplier, allowing companies to be much more effective and create innovation. What does this mean?

Example: without the right communication channels, the right decision-making processes and the right infrastructure for implementing ideas, very few of the ideas that people come up with will actually see the light of day.

This is where tools such as the right innovation method can make all the difference. What many people forget, however: In innovation management, people always come first – in other words, even if we establish the best innovation tools and innovation processes in the company, they won't work if employees don't have the appropriate innovation mindset.

INNOVATION COMPANY CULTURE

One thing is clear: With the right kind of innovation culture, a company is much more likely to recruit and retain the right people in the organization.

A good innovation culture does not only promote innovative thinking, but also significantly increases the overall satisfaction of employees. As a rule, the effects of a good innovation culture in the company potentiate each other and generate a real upward thrust. Thus, an innovation culture can in fact be a game changer for a company's innovative force.

Here are some of the characteristics of an innovation culture:

- Encourages employees to always think about ways to be better, and to do so without immediately focusing on productivity or efficiency.

-Considers failure as essential for creating something new.

-Provides sufficient freedom and responsibility.

INNOVATION STRATEGY

Last but not least: innovation strategy.

Strategy, simply put, is a company's plan to achieve long-term success.

Linking innovation with strategy is in fact challenging. Anyway, innovation is one of the best ways to achieve strategic goals. The problem is: strategy and innovation can hardly be reconciled. However, innovation management without strategic orientation is worthless.

In practice, the company must be given enough freedom to actually innovate. However, there are also certain constraints, such as the available resources and the company's own capabilities.

What does that mean? There needs to be an innovation vision, but as soon as the first steps are taken in this direction, it also needs the openness to deviate from the goal and the ability to take new, different paths.

Let's take a family business that focuses on catering services and events: If it tries to innovate in its sector while sticking to its original strategy despite completely changed market conditions, it is unlikely to be successful. It can, however, focus on its strengths and try to open up new business areas in a comparable sector that is not yet under the influence of the new market forces. For example, it can develop a modular delivery service for co-working spaces that meets the demands of a new target group by tailoring convenience meals to individual needs (ketogenic, vegan, organic, etc.) – this service can be offered via app on a subscription basis.

This is just an example, but nevertheless, it is the management's job to direct innovation into areas where it is more likely to be successful and of greater benefit to the business.

All four of these aspects have a strong impact on the organization's ability to develop and manage innovation.

If you want to manage innovation effectively, it is important to understand both the big picture and the individual components that make it up.

RISK IN INNOVATION MANAGEMENT

Your ability to tolerate risk determines both the downside and upside potential of your investment.

Since working on innovation always involves a lot of uncertainty, the risk aspect should be given special attention.

For example, startups have very little to lose initially, which is why they are willing to invest 100% of their resources in working on a single project.

On the other hand, there are many established companies that are very risk averse. Although they may have a lot of resources, they are only willing to invest in innovations that have almost a 100% probability of being profitable.

This obviously limits their ability to grow and make more profit. However, it makes sense for companies that are primarily interested in providing a stable livelihood for owners and employees.

Both are perfectly valid approaches.

RISK OF NOT IMPROVING

That said, we are convinced that the risk of not improving basically means that if you just keep doing what you have always done, it is only a matter of time before you are out of business.

In some industries, this can take decades, but in certain fast-moving industries, it may only take a few months until you lose your competitive edge. However, with digitalization, this pace is constantly increasing.

Therefore, not taking risks at all can be considered the biggest negative risk factor of all.

WHAT DOES SUCCESSFUL INNOVATION MANAGEMENT LOOK LIKE?

Now that we have looked at the most important innovation concepts, you probably want to know what it all means in practice. What does successful innovation management actually look like?

Unfortunately, there is no right or wrong answer to this question.

The right way always depends on the individual situation of each company.

However, successful innovation management is usually the result of all four aspects of innovation management working in concert with each other.

In our experience, companies that are considered more innovative have several things in common:

- They have talented people at all levels of the organization.

- They have a clear vision and strategy that everyone understands.

- They focus on implementing ideas rather than just talking about them.

YOU WANT TO HIRE AN INNOVATION AGENCY?

Are you interested in developing new innovative products and services for your company?

The easiest way is to have a 30-minute video call as a first step so that we can get to know each other and you can tell us about your challenge.

Here is a link to our calendar where you can secure your appointment on the topic  “Innovation Management”: https://bit.ly/3bNPxAY.

We HELP OUR CUSTOMERS BECOME INNOVATION speedboatS IN THE MARKETS.

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The easiest way to find out whether there is a “match“ is a video call for getting to know each other.

Not sure whether GRANNY&SMITH is THE right PARTNER for you?

Schedule a call with our CEO Lars Behrendt to learn more about us and how we work with you.

FURTHER
INFORMATION

INNOWEEK®

The practical approach to innovation development which makes it possible to reduce the usual period of several months to a few weeks.

INNOVATORS`BOOTCAMP

By joining  our Online Bootcamp, you will learn to do your INNOWEEK® yourself in order to execute your innovation projects at maximum speed.