‘What’s the new thing’ – how many times do we hear this? On a daily basis, right? We are a generation that is constantly craving for something new in the markets. We change our preferences overnight and expect technologies to emerge out of nowhere to meet them. And have we been disappointed till date? Absolutely not! It seems like before we even conjure up what we want, we have it catered to us, courtesy constantly innovating enterprises.
Today enterprises are buzzing and pulsating with incessant innovations. The brutal competition requires these enterprises to be on their toes and keep innovating new products, technologies and concepts to dazzle the markets.
However, this does not mean innovation should be undertaken on an ad hoc basis. In fact, innovations should follow a carefully crafted corporate strategy.
Innovation – A Discipline
Boston Consulting Group brought out in one of its report that innovation features in the top 3 priorities for enterprises. Even the knowledge-based markets today differentiate enterprises based on their capacity to innovate. So, what does this say about innovation as a business activity?
First and foremost, innovation is a cardinal function that needs to be undertaken on a continuous basis. In order to succeed in the long run, enterprises will need to maintain a constant flow of ideas and promote a culture of constant choices. Secondly, innovation is no longer the forte of techno geeks. It is now a natural extension of every single job role.
Simply put, we now need to change our outlook and view innovation as a discipline rather than a mere activity or process taking place behind glass doors of labs.
Innovation is not a freewheeling task for enterprises. An innovation project consumes valuable resources in terms of human talent, capital and decision-making authority. This calls for an approach to profoundly manage these projects and account for them.
Innovation management is one such systematic method of supervising and streamlining all the processes that form a part of innovation. It starts at creating an environment that fosters generation and exchange of ideas. The next step is to handpick the executable and profitable ideas and bring them to fruition. The final stage is to introduce the innovations into the market.
Innovation management creates and maintains a stable pipeline of innovations for an enterprise.
Large multifarious enterprises typically have several innovation projects underway at the same time. All of these projects would not hold the same value for the business. Here enterprises can use innovation portfolio to assess the risks involved in each project and determine the high value projects. They can identify the redundant activities and strike a balance between different projects.
Innovation portfolio also helps enterprises discover hidden synergies in one project that can be leveraged across other projects to yield better results. But more importantly, it imparts improved market visibility to enterprises. It helps them better phase out the launch of their new products. Enterprises can thus be sure that at no of point of time they overwhelm or underwhelm the markets with new introductions.
Innovation Management – An Integrated Approach
Innovation is not a timeless concept that has remained untouched by change. In fact, innovation has shrugged off its historically linear course and is no longer limited to just the product. Today, it spans across strategy, business, organization, process, technology, and marketing.
With innovations taking place at the system level it is crucial that we manage them from a systemic perspective. But the traditional piecemeal approach to managing innovations bundles them up into silos. It’s prudent that enterprises adopt an integrated approach that ties innovation to the very heart of the business.
Governance of Innovation Management
Although innovation is a very critical activity, it is not the only activity for an enterprise. We have seen cases in the past where companies focused so much on innovating that they lost track of their bigger goals. They came up with innovative products that were absolute works of genius. But they were not viable and conflicted with the business vision. This highlighted the need for governance.
Now, innovation management aligns the different processes that go into innovation. But governance aligns the goals of this management function to greater business objectives. It helps enterprises limit the scope of innovations to feasibility parameters and justify them to business vision.
After all, innovation cannot be undertaken at the risk of profitability or worse yet bankruptcy!