How Important Is Innovation Management For Businesses

Innovation has been one of the hottest subjects in recent decades, and while many people are wary of hearing about it all the time, the name and the notion behind it are here to stay. We've had a lot of conversations about innovation management, and if there's one thing that's become clear from the start, it's that while there are a lot of different notions and viewpoints on the subject, there's shockingly little agreement on what good innovation management is.

What is Innovation Management

Innovation has never been more prevalent than it is today; everyone is talking about it, and it is seen everywhere. But, first and foremost, what is innovation, and what does innovation management entail?

"Innovation" is derived from the Latin word "innovare," which means "to renew." In terms of economics, innovation is defined as something new that benefits an organization or society. The terms "idea" and "invention" are frequently used to describe innovation.

As a result, innovation management encompasses activities such as planning, organization, administration, and control, as well as the systematic promotion of innovations in businesses. All approaches to foster innovation in businesses and generate benefits are referred to as innovative management.

The video below will further explain innovation management.

How Can A Company Innovate?

The act of innovating is a procedure. Whether you like it or not, you won't see results right away. Depending on the complexity of the idea, it can take months or years to put it into action. All businesses value innovation but they should be prepared to to take risk and transform. Innovation is a dangerous business, and companies must carefully manage this risk in order to thrive and expand. Here are some things to take note of:

Competency

Your core competencies are the areas that your company excels at and outperforms the competitors at. However, just because you can do something well doesn't imply it's important, because your skills may not always line with the demands and needs of your target market. It's important to identify your employees' competencies from those of your company as a whole when it comes to innovation management.

Your staff may have one-off skills that are only useful in specific situations. The capacity to steer and organize these talents around a market solution, on the other hand, is your organization's core capability. As a result, you should look for the following abilities when evaluating organizational competency, collaboration with external stakeholders and partners, getting the most out of your current assets, creating concrete long and short term objectives and using strategic management to achieve goals and track progress.

It is advantageous to have someone with prior experience in innovation management within your company. You may, however, convert it into a key strength if you have the correct mindset and focus on expanding your company's proficiency in this area.

Structure

Whereas competency is primarily concerned with capability, structure refers to the organization's systems and business processes. Controlling innovation is critical, and the framework is what allows it to happen. The whole is larger than the sum of its parts under the appropriate structure.

It has the potential to help your company run more efficiently and generate more impactful ideas. Managers may be dubious and dismissive of employee ideas if they are treated as if the employees are proposing a substantial, sweeping change all at once.

Many ideas may never be heard or will be discarded without a fair hearing if this approach prevails. The fewer hurdles there are between an original idea and your key customer, the better. By definition, innovators are rule-breakers who deviate from the way things have always been done in your company.

Culture

When it comes to managing innovation, your culture will either amplify or detract from your success. A positive culture attracts and retains innovators, whereas a negative culture repels them. The first step in fostering a pro-innovation culture is to consider how you might encourage certain behaviours while discouraging others. The following are examples of behaviours and cultural elements that promote innovation:

  • The Best Idea Wins - A culture that guarantees employees that their ideas will be evaluated on a merit basis would encourage more creativity. Instead of bottlenecks and hierarchies deciding which ideas to embrace, anyone can propel the organization forward if their proposal is in line with the company's objectives.
  • Speed to Market - In today's environment, the company that takes a new idea to market first often wins because it can gain market share before the competition does. It's also possible to iterate on products and services that have a shorter lifecycle. Encourage employees to take their learning seriously by providing opportunities for them to do so on a regular basis. Teams who are always learning keep their minds sharp and can spot chances for innovation more quickly.
  • Failure as a Process - One of the most significant impediments to long-term success is the belief that a proposed solution that didn't work out was somehow "wrong." Not all ideas will be approved, which is fine; nevertheless, your staff needs to be aware of this and hear it directly from your organization's executives.

Strategy

In a nutshell, your strategy is the long-term planning you've put in place for your company to achieve its financial and other objectives. With the appropriate plan, you can confidently launch new ideas and choose the best path forward from a variety of possibilities.

You risk going in circles or pursuing concepts or initiatives that will not benefit your company in the long term if you don't have a defined strategy. Resource allocation is part of the strategy, and it should guide your innovation management approach depending on your resources. As you devote more or fewer resources to exploring new ideas, this allocation may fluctuate over time.

Why Is Innovation Management Important?

Innovation is critical since it is the only method to distinguish yourself from your competitors. Failure to recognize the importance of innovation management can result in a company remaining trapped with outdated products or even going out of business, while competitors take the lead in the sector by providing new and better value to customers. Here are some reasons why innovation management is important.

Employee Engagement Is Boosted.

“Talent wins games, but collaboration and intelligence win championships,” Michael Jordan once stated. These wise comments might just as readily be applied to the advantages of cultivating a vibrant innovation culture. You may have a talented workforce with innovative ideas.

They will, however, have little impact on your company unless they are encouraged to pool their knowledge with that of other employees and collaborate to achieve overarching innovation goals. You can build a company-wide ecosystem where people feel involved and rewarded to share their ideas by using innovation management.

  • Make it a Competition. 'Gamify' the process. This might include rewarding employees who make proposals that are adopted with rewards, or hosting innovation competitions involving departments or select teams. Participants are more likely to contribute successfully to a project that is structured like a game rather than one that feels like another usual procedure when it is structured like a game.
  • Create a Communication Strategy. Send out emails, newsletters, posters, and other materials to spread the word about your innovative initiative. Employees will be reassured that their feedback will be valued as a result of this.
  • Continue the Conversation. Create an online environment where employees may cooperate on innovation projects and upvote and comment on new ideas.

Helps in Identifying and Implementing the Best Innovation Methods

The process of capturing, refining, and executing revolutionary ideas can be systematized via innovation management. You will need a process in place to collect ideas from target audiences (workers, customers, partners, etc.) and then filter the "gold" from the "gravel" to drive innovation. The goal of innovation management is to make these processes repeatable and scalable.

Through innovation management, you will be able to find, develop and implement innovative ideas. Encourage your staff to innovate by holding brainstorming sessions and assigning co-creation assignments. Having an online "suggestion box" for random ideas may seem old-fashioned, but it could help you unearth gems in the rough. You can also capture outside sources of creativity.

Open innovation allows you to crowdsource critical insights from consumers, partners, and other external stakeholders. Unleash the competitive drive in your team by running hackathons to give innovation initiatives a competitive edge and to encourage internal and external stakeholders to offer their best ideas. Create the funnel through which ideas must pass in order to be realized, including essential approval "gateways" and the decision-makers who must monitor them.

Provides A High-Quality And Consistent Return On Investment (ROI).

When it comes to innovation, the old saying "you can't manage what you can't measure" is especially true. Although it's necessary to have processes in place to unearth outstanding ideas, it's just as important to track how these ideas proceed toward execution and evaluate their impact on your bottom line.

Part of what makes innovation management so important is that it allows businesses to ‘incubate' ideas, ensuring that they are developed with input from diverse stakeholders and are poised to deliver the best possible return on investment. Incubation could entail appointing specialists from relevant departments to evaluate an idea's viability, allowing customers to vote on a variety of new product alternatives, or just allowing staff to upvote and remark on inventive concepts.

One of the key reasons for the importance of innovation management is that it allows new ideas to be implemented in a rigorous and data-driven manner. The collection of crucial indicators like profits gained, market acceptance levels, positive comments, and so on is an important part of innovation management because it can help advise future project revisions.

As a result, the risk and uncertainty associated with the development of new products and services may be reduced, and what creative approaches regularly generate value can be shown. With this information, you may push your innovation efforts to new heights.

Examples Of Innovation Management Software

Business rivalry is based on how quickly a company can conceptualize, develop, and then implement new product ideas. To be a worthy competitor, businesses must be able to effectively tap into their employees' creativity, as well as be skilled at focusing their employees' creative juices on important business concerns; efficiently collecting and assessing ideas, and then quickly selecting those with the best chance of implementation. With the help of a management tool, such an innovation scheme can be realized.

Innovation Management Software are known as a web-based solutions that allow firms to collect perspectives and ideas from all of their employees regardless of their location and store them in a central database. Innovation management software is used in businesses to aid in the development of innovation and ideas by providing tools that improve staff collaboration. The software's purpose is to enable businesses to respond to both external and internal ideas. Users can track digital enterprise innovation using the program, which starts with idea generation and ends with the selection of ready-to-implement concepts. Here are some examples of innovation management software.

Viima

Viima is the most effective tool for gathering and developing ideas. Thousands of companies, all the way up to the 'Global Fortune 500,' have already embraced it. Viima is completely free for up to 50 users and can be set up in minutes. It is intended to make innovation management visible, simple, and painless for all parties involved. Viima can also handle multiple types of idea management and innovation processes at the same time.

Idea Drop

Idea Drop is a tool for generating and capturing fresh ideas, as well as gathering information among teams, departments, and offices throughout the world. The central innovation flow is designed to involve a diverse group of team members. When proposing an idea, users can utilize the 'cloak' option to hide their identify if they like. Participants are kept interested through the software's social component, which includes link sharing, comments, hashtags, attachments, and favorites. Users can share commercial or operational difficulties with a larger group, establish deadlines, and give rewards with the Idea Drop Program. Within an organization, the platform can create a limitless number of sub-communities.

HunchBuzz

HunchBuzz is an easy-to-use cloud-based innovation management platform that allows customers to crowd-source ideas and collective insights from their workforce. HunchBuzz has a reward store, a scoreboard, quick access, and concept management. By promoting, recording, and recognizing fresh thinking and ideas that identify obstacles and possibilities, HunchBuzz aids users in adapting and evolving existing processes, products, services, and business models. Users can utilize HunchBuzz to boost employee engagement and undertake ongoing involvement and collaboration by collecting their organization's voice and distributed intelligence in an open and transparent manner.

Innovation Into Practice

The process of managing an organization's innovation method, from the first step of ideation to the last stage of successful implementation, is referred to as innovation management. It includes all of the decisions, actions, and procedures involved in developing and implementing an innovation strategy.

Here are some instances of companies that have implemented this theory.

Uber

Uber has been able to increase its market share by taking advantage of the lack of regulation for digital rideshare services in the majority of the countries where it operates. It is in Uber's best interests to invest resources in developing and lobbying for industry regulations that benefit them.

Furthermore, smartphone ownership is increasing in emerging markets, giving them an extra advantage in market penetration in many of the countries where they operate.

WhatsApp

When two ex-Yahoo software developers, Brian Acton and Jan Koum, founded WhatsApp, they had no idea that their instant messaging programme would spell the end for our local mobile network providers' short message service (SMS) and multimedia messaging service (MMS) businesses (MNOs). WhatsApp's business model is based on simplicity. Simplicity is employed for two reasons: to keep costs down while simultaneously presenting a highly concentrated value proposition to potential customers.

These two characteristics are what help a disruptive innovation establish a great brand. To make money, WhatsApp employs two ways. For starters, it gets money from the millions of iPhone users who download the WhatsApp software for 99 cents from the Apple online app store. Second, other people can download and use the software for free for at least a year. It is envisaged that after one has experienced the cost and convenience benefits, paying US$1.99 for three years will not be a difficult task.

Airbnb

Airbnb is said to be disruptive because of its "innovative internet-based business strategy and distinctive visitor appeal." Airbnb provides peer-to-peer accommodation through the use of ratings, user profiles, and identification verification. Hosts can also use Airbnb's technological infrastructure to promote their rooms by posting photos and content.

It is less expensive for tourists than staying in a hotel and provides a more "local" experience. By staying in “non-tourist” locations, tourists can immerse themselves in the local culture. Airbnb is also disruptive because it caters to the lower end of the market by providing low-cost rentals.

Conclusion

Innovation management is a difficult and vast topic with no clear answer, so it is recommended that you start by reviewing your existing situation and then identifying the obvious obstacles in your organization's innovation efforts. Some components of the many characteristics, such as particular processes, maybe quicker to correct than others, such as culture, which will undoubtedly take longer. Once the obstacles that are stopping you are solved, It's time to start focusing on building your capabilities.

While it's critical to address any visible bottlenecks, don't devote all of your attention to addressing flaws. Being great and unique in one area leads to innovation, rather than being average in all areas. As you might imagine, this will take some time, so take it slowly.

Reference

How Can A Company Innovate

Why Is Innovation Management Important?

Examples Of Innovation Management Software

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Written by Cherylle Phua

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