Innovation Management: Known Factors and Processes

Innovation is always about doing something different. It can be a new product, service, or even a new process to support one of those. The problem with innovation is that it requires the innovator to step into the unknown. If one is to be innovative, they have to take risks and there is a chance those risks do not payoff. Being innovative requires one to take a gamble on something with hope that it will pay off. The difference between gambling and innovating is innovation management.

The process of decision-making and innovation are similar in the sense that each process should have structure and a method of selection based off of risks. However, they are overly different as it relates to how it should be done.

The process of decision-making should, for the most part, be strategically aligned with the organization’s objectives. As briefly mentioned in Managing Innovation, general decision-making process can be thought of as “a simple matter of selecting amongst clearly-defined options” (Bessant, 2016, p. 330). Depending on the culture and management structure of an organization decisions can be made by using risk assessments/analysis. Of course, if there is a project with high uncertainty decision-making gets to be more difficult. Top management or leaders can make better judgements, in a general sense, when a risk (positive or negative) exists and it flows through an already established decision-making process.

The process of innovation is much more complex. Innovation is change. Innovation is uncertainty. Therefore, building a climate and culture within an organization that is designed to adapt to those constant changes either before, during, or after compels an organization to develop the capabilities and capacities to keep up. Depending on the innovation type, whether it be ‘incremental’ or ‘radical’, organizations should develop the capability to manage both kinds of innovation (Bessant, 2016, p. 74). For example, if a decision needs to be made for a ‘do what we do better’ (incremental) project then the risk in making a decision can be easier because the information would be there as it may be a more routine situation. As opposed to a ‘do different’ (radical), hardly any information is available at the outset and comes in as the project begins and progresses. This is a totally different ‘animal’ (if you will) than just having a simple, generic decision-making process or flow chart to help managers or leaders follow when they need to make a “general” decision.

To keep the balance of managing risk while continuously innovating, innovation management should be established. It becomes critical for the process of innovation if an organization is to be successful in the long-term. One way is to build a portfolio and spread the risk. It is stated “…the question of which projects and the subsidiary one of ensuring balance between risk, reward, novelty, experience and many other elements of uncertainty” (Bessant, 2016, p. 338). So, portfolio management and project management skills, tools and techniques along with innovation management would prove to be more effective than just general management practices. Risks are something that can be calculated. Even in gambling, there are odds to just about anything. Innovation management is about calculating those risks and making wise decisions on whether to move forward with an idea or if it is time to cut ties and move on to another project.

The role of external contacts (or external networks) becomes critical for many reasons. External contacts provide an option for an organization to develop a relationship by partnership; collaboration; and competitiveness. Even in business, external contacts or networks can share and compete in the same breadth. Networks can allow organizations to share the risk by sharing resources; information systems; knowledge; and expertise. If the appropriate agreements are made, they can share the benefits of their working together by means of being innovative. Outside sources of input can be a better tool than a research and development department. “In a recent IBM survey of 750 CEOs around the world 76% ranked business partners and customer collaboration as top sources for new ideas whilst internal R&D ranked only eighth” (Tidd & Bessant, 2016, pg. 277).

Going out and getting new ideas from outside of the normal operating space is going to produce better results than just sitting inside trying to think of something without outside input.

References

Bessant, J. (2016). Managing Innovation: Integrating Technological, Market, and Organizational Change. John Wiley & Sons Ltd.

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 Meet Nikia Smith, the Project Management Consultant driving success at Business and Wealth Generations. With over a decade of advisory expertise, Nikia orchestrates strategy and operations, spearheading growth and innovation. Beyond his professional endeavors, Nikia actively participates in his community, having served on the Board of Directors at the Project Management Institute Florida Suncoast Chapter in different roles for several years. Recognized for his contributions, he received the PMI Florida Suncoast Chapter Award in 2018 for significantly boosting membership and retention and was also selected to attend the 2019 PMI North America Leadership Institute Meeting in Philadelphia. Nikia holds a Bachelor's Degree in Management and Organizational Leadership with a focus on Project Management, alongside several business certificates from St. Petersburg College. He is also certified in CAPM and PMP by the prestigious Project Management Institute. For collaboration opportunities, reach out to Nikia at info@thebusinesswg.com.