Innovation – such a buzzword in the business world. It stands for creativity, freshness and the unknown. Business leaders see this as an opportunity for growth and at the same time a risk that could kill their company one day.
Few people, thinking about innovation, would combine it with management. What management = organization, strategy, system, structure applies to innovation?
As it turns out, these two concepts are inseparable. Read on to find out everything you need to know about innovation management.
What is innovation management?
Innovation management can simply be understood as a complex planning process – from selecting ideas to implementing them and launching the final product/service.
It involves creating the right atmosphere in a work environment that encourages innovative initiatives and provides a clear framework on how to share them and then make them real.
It means openness and readiness to make changes that will develop your business.
Why is innovation management so important?
Innovation management is critical as it enables business leaders to increase employee productivity. It translates into increased business results and gives your company a competitive advantage in the market.
New procedures and improved processes boost your employees’ morals and increase the quality of your services.
The key aspects of innovation management
To better understand what innovation management is, we can break it down into several key areas.
The first one – capabilities. People and their individual skills are the most important source of innovation and success for any organization. Personal insights, experiences and the ability to share knowledge and cooperate with others are the key to the development of any company.
The company as a whole also needs to gather data and other resources to draw conclusions and predictions for the future. An effective way to do this is through business intelligence services which are the latest technology that can automate these tasks.
The right structure of the organization enables the full use of opportunities and increasing the effectiveness of the team.
The key elements of a well-built organizational structure are:
- clear communication channels,
- welcoming new ideas,
- an effective decision-making process,
- infrastructure for implementing innovative ideas.
As a business leader, you need to remember that the right structure does not mean being identical to everyone. Find the strengths of your employees and give them the opportunity to fully use their potential in their own unique way.
As mentioned before, people are the most valuable asset of an organization. Therefore, first, you need to recruit talented people and then make sure they want to stay.
How to attract employees and encourage them to become permanent members of the team?
By maintaining the right culture, being open to innovation, and creating a supportive and collaborative atmosphere.
Give your team opportunities to share ideas, learn new things, and experiment. At the same time, let them feel responsible for the company’s development while remaining free to express their ideas and doubts.
The final aspect of innovation management is an effective business strategy. You must have a realistic plan for how to make your business successful in the long run. One way to achieve this is through innovation.
How to combine innovative initiatives while maintaining certain limitations that will ensure business survival?
By keeping the balance. Your team must have enough freedom to implement innovative ideas, but at the same time maintain the constraints that ensure a stable position for your company.
To lead an effective innovation management, keep these four principles in mind and look at both the overall picture and the individual aspects.
What is the role of an innovation manager?
The innovation manager needs to stay open-minded and flexible while maintaining certain boundaries that keep the company going.
Below, you will find the most important tasks of a leader of innovation management:
- building an environment conducive to ideas with a clear framework for their submission,
- organizing team activities aimed at creative development,
- identification of both opportunities and threats,
- creating an implementation strategy,
- ensuring property rights and patents,
- building an innovation network in order to use external resources,
- business strategy planning, including innovative opportunities.
Types of innovation
To fully understand innovative management and its challenges, you need to be familiar with different types of innovation.
It is often simplified to say whether a company is innovative or not. The truth is not that simple. Read on to find out how the concept of innovation can differ.
Put simply: incremental innovation = improvement of existing processes.
It’s fair to say that this is the most common innovation. It is realistic and profitable. The goal is to identify which mechanisms need to be improved in order for your business to grow and become more efficient.
Once you spot them, the innovative part begins. You need to find a suitable solution using existing technology, tools, or processes.
Why is innovation management so important here?
The larger the organization, the more difficult it will be to closely observe all existing mechanisms. That is why communication between management and the rest of the team is so important.
Let your employees report their insights and suggest ideas. Make them feel that their opinion matters and create a safe environment for implementing solutions – even if they prove ineffective.
This one is for leaders who are not afraid to take significant risks.
Disruptive innovation is when you put an innovative idea over all existing mechanisms and decide to implement it, risking losing a lot of money, time, and possibly your position on the market.
Why risk it?
If the innovation turns out to be successful, your company will significantly increase its competitive advantage and income.
In this case, innovation management plays an essential role as it may determine the success or failure of innovation.
Architectural innovation is using an already proven technology in a new way or a different department of your business.
Once you notice that a particular high-tech solution is effective in some area of your organization or is being used by competitors with great results, it is only logical to apply it yourself on a larger scale.
In this case, innovation management will focus on identifying areas of your business that can benefit from this technology and preparing an effective implementation strategy. The risk, while still there, is marginal.
The winner takes it all – it could be a motto or a radical innovation. Most likely, such an innovation means introducing a completely new product or service to the market. Historical examples: first computer, first plane, first car, etc.
Being a pioneer gives you amazing business opportunities – when your innovation works well and actually attracts customers. Otherwise, all your efforts will be in vain, often leading to the bankruptcy of the company.
Radical innovation is the most challenging type if it comes to innovation management. You have to plan every aspect perfectly and make sure that everyone is following the strategy. Most of the great ideas have failed due to a lack of proper management.
Innovation management is a key element necessary to make creative ideas a reality. This is a great challenge for managers and business leaders, as well as their huge responsibility for introducing innovative management into the company’s structure.
Remember, to be successful in innovation management, you need to adopt an innovative approach to standard leadership practices.