A beginner’s guide to innovation management

Maximilian Unger
Innovation management - all you need to know from what is it and when to start to how to ensure you have the support of your organization.
Maximilian Unger - A beginner's guide to innovation management
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“Organizations, by their very nature are designed to promote order and routine. They are inhospitable environments for innovation.”

T. Levitt

We wouldn’t go as far as Theodore Levitt, but you do have to understand the “organizational realities” in order to be successful in innovation management. Here is a short guide we put together based on our experience with corporates covering the basics of managing innovations, plus some of our best tips.

Innovation management – the what, the why and the when

What is innovation management?

Innovation management combines the overseeing of innovation processes with the so-called “change management“. The term entails everything from product and marketing to business process and organizational innovation. Simply said, innovation management is the way of shaping and developing ideas until they become reality.

Why is innovation management important?

It should go without saying, but innovation helps organizations discover new opportunities. This increases your chances to react adequately to changes in the market and society. It can also help foster competitive advantage as it allows you to build better products and services for your customers. Managing those innovation efforts is crucial for the survival, development and ultimately the success of a company.

When is the right time to start with innovation management?

It’s always tricky to estimate the right time for innovation, as being too early or too late can both cost your success. Investing in innovation management, however, should already happen during the decision-making process. This will ensure a clear contribution of the innovation activities towards the company’s strategic goals. It’s also crucial that the organization elaborates the requirements early on and clears the path for fruitful innovations. That’s why innovation managers should play an active role in making decisions on a strategy level, as soon as the topic is on the agenda.

The how

So far we established the basics of innovation management. Now let’s take a look at the most important things to consider when executing innovation.

Align the goals on a strategic level

A clear alignment with the company’s vision and strategy shows that the corporate organization is led by innovations and sees them as an integral part of its development. (Check out our blog post with tips from corporate innovation experts in ÖBB and Raiffeisen Bank International). If the objective is not in line with the company’s goals, innovation managers often have problems receiving the support they need. For example, they face struggles when it comes to the release of budgets or the elimination of structures that hinder innovation. When this occurs, the organization deprives itself of any leverage or market advantage it has through customer access and existing infrastructure. The projects then often run into a dead-end, the mother ship doesn’t accept them or just puts them into a drawer. Safe to say, none of the above promotes a culture of innovation and helps motivate the ones responsible.

Follow a framework

In an ideal world, the (innovation) strategy team works out “search fields” along the lines of the corporate vision. These can be shaped into definable fields of innovation on the basis of analyzing current megatrends recognizable in society. Based on the derived strategic innovation fields, the team defines clear business challenges and with the help of the idea development process turns them into feasible problem-solutions.

This is a high-level representation of innovation management as defined by TheVentury in our Innovation Journey and validated in numerous projects with start-ups and established organizations.

Execute the right innovations

Subsequently, there is a variety of different implementation options. Will you choose the Inside-Out approach and take innovation developed inside the organization out (spin-off, licensing out, etc.)? Or will you decide on the Outside-In approach and bring innovation, that was developed outside of the company, to the inside (joint development, venturing, licensing in)? The choice depends on the orientation of the idea. Is it close to the core of the company? Or is it something completely new, that has nothing to do with the current value creation of the organization? This should be decided on a case-by-case basis and only with a clear objective. Once the ideas have been transferred into the right vehicles, concrete innovation projects can be developed and implemented from the concepts.

Always start with the why.

Without a clear mapping to the strategy and vision of the company, the full support of your organization will fail to materialize. Especially in difficult times or conflict phases, you need this common objective to refer to again and again. So take the whole organization on a journey and help the top management understand why the future of it depends on innovation. However, you shouldn’t neglect the core business of the company. It is not an either-or, but a symbiosis of ambidextrous capabilities that pose challenges and problems of understanding. Once the mutually added value and the target perspective are in place, you will be amazed at how much more you can achieve in innovation management.

“It’s tough when markets change and your people within the company don’t.”

Harvard Business Review

Conclusion

Innovation management is crucial for every organization, that wants to have sustainable competitive advantage in the market. At the end of the day, the alignment between vision, strategy, and concrete innovation goals will help gain “buy-in”. Everyone will see the value in achieving these set objectives. In essence, it helps you eliminate conflicting priorities. This way all stakeholders can be on the same page and pull on the same rope to steer the organization towards a bright future. If you need help with your innovation management efforts, contact us for support in any phase of the innovation journey.

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