The importance of a Business Innovation Management Strategy

Managing innovation through a Business Innovation Management Strategy has been recognized as one of the most powerful ways an organization can put in place a system to streamline internal processes through a comprehensive innovation plan.

25% of global executives say that a lack of coordination is one of the biggest obstacles to innovation ROI.

By adding structure and strategy to your innovation initiatives, it allows your teams to communicate more effectively and improve awareness across the company of your various innovations.

Building blocks of innovation management

• Capturing innovative ideas from employees at various levels
• Building an active and collaborative workforce
• Recognizing employees effort
• Communicating effectively with all stakeholders 
• Making more informed decisions around products/service

The value and importance of Innovation Management

Business innovation matters for one simple reason: value. In order for your business to thrive, it is crucial to be continually innovating and improving. Business innovation requires organizations to identify which of their processes, products or services could be improved to boost the company’s profitability e.g. forming new partnerships, outsourcing specific tasks or implementing new technologies.

Different types of innovation

Process Innovation

In such a fast-paced world where technology is advancing quickly and leaving many older business models behind, businesses are seeking new process innovations to ensure new products or services get to market faster.

Process is the combination of facilities, skills, and technologies used to produce, deliver, and support a product or provide a service. Process Innovation techniques are crucial in predicting a product's future results so that better decisions can be made to improve the service before launching it into the market. It allows a company to develop time-efficient and cost-efficient strategies.

Product Innovation 

Product innovation can come in three different forms:

• The development of a new product
• An improvement of the performance of the existing product
• A new feature to an existing product
  

Drivers of product innovation might be technological advancements, changes in customer requirements, or outdated product design. Product innovation is generally visible to the customer and should result in a greater demand for a product.

Innovation risk management

Innovation management isn’t intended to eliminate the perils of innovation, but instead  reduce the risk and improve the company’s ability to put time and money toward those concepts that have the best chance of succeeding.

Forward looking strategies and great ideas or innovations need to be supported with insightful metrics, particularly on the risks you are exposed to. Whitespaces you can't see in your data, such as relationships and dependencies, costs companies, money, time, effort, and reputation.

Understanding the risks, relationships, and their impacts allows you to prioritize which to mitigate first and is vital to ensuring a successful innovation strategy.

Innovation strategy

Innovation doesn't emerge from ad hoc, stand-alone efforts that compete with one another for time, money, attention, and prestige. Innovation is a journey that starts with creating ideas collaboratively, then choosing and implementing the best that add the most value.

The innovation journey 

Many businesses are great at ideas generation, but only some complete the innovation journey.

It’s no longer realistic to expect only a few individuals to come up with new ideas frequently and organically. Large organizations need more open communication and collaboration between all their different departments and levels for innovation to really work. Not only to gather and share the ideas in the first place but to enable a shared understanding of the decisions being made around those innovations going forward.

To truly innovate, businesses need to manage innovation strategically and communicate transparently with all stakeholders. C-level executives might not recognize the precise pain points of specific markets compared to mid-level managers, whose knowledge facilitates them to produce a stronger innovation strategy than a high-level executive.

Examples of Innovation Management

Blockbuster

A historic case of what a lack of Innovation Management or an Innovation Strategy can do to a business is Blockbuster's eventual bankruptcy (and, conversely, the rise of video-streaming and Netflix). In their height of expansion during the late 80's, Blockbuster were opening a new store every 24 hours. This was, ironically, due to their spear-heading of innovation in the film-rental market, offering a family-friendly image for consumers. This came to a grinding halt in the mid-late 2000's, when Blockbuster's failure to innovate and invest in new markets led to their bankruptcy.

Netflix

Netflix, on the other hand, embraced and heavily invested into emerging markets and reaped the rewards. Founded in 1997, they were widely dominated by Blockbuster in their opening years of video-rental. Their ability to form an efficient Innovation Strategy, as well as manage the innovation they were investing in, led to their skyrocket in value and popularity over the past decade.

Conclusion

This widely-known business story shows the vital importance of innovation as a whole, but more specifically, managing that innovation effectively and having a solid strategy behind it all. Check out SharpCloud's Innovation Management page to read a little more on how we support your innovation (if Blockbuster had used all those years ago, we're sure they'd still be here today!). So, in short:

• Be aware of your surroundings. Having the whole view and understanding your market is key to successful innovation and a successful business.
• Understand your risks. Fully realize the probability, impact, and relationships between the risks you inevitably take on through innovation.
• Have a strategy in place. You need a strong system that you understand and has all the information required to make the correct decisions.

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The cost of failing innovation management 

Failing to recognize the significance of innovation management may result in an organization with outdated offerings. Even if your team or company is made up of intelligent, creative individuals, unanticipated roadblocks can easily occur - furthermore, failure to assess the risks associated with any innovation investment can put your business in a difficult position when unprecedented risks come to light - sometimes you need to have the whole view.

Best practices for innovation management 

New technology

Integrating an innovation management platform can help your organization to capture ideas and serve as a discussion platform, generating solutions to business challenges or creating and managing new products, all of which can save a company time and money.

Using the right technology for surveying all the innovations being taken by your business will allow you to visualize and scrutinize a wide range of critical factors, including:

• How many new initiatives are being pursued in each department?
• Investment and resource management
• How innovations affect other project

Empowering your organization with the right technology that helps uncover, convey, and deliver insights to all areas of your business, will create clear decision points and agreed upon rules that will help establish which ideas will be moved forward. Result? Better decision making and better products or services.

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Better communication and collaboration

Involving every employee remains crucial, innovation isn’t effective in isolation. Bringing employees together, in the beginning, may stir a better chance for success.

The best way to inspire innovative thinking isn’t to force a brainstorming session, it’s to create an ongoing conversation. The quality of conversation is an important factor in determining the quality of creativity and innovation. 

Bridging the gap between ideation and action will help bring ideas and data to life and create a shared understanding between senior management and employees, ensuring alignment to strategic goals and ultimately more informed decisions.

It's essential that employees should know the buzz around the ideas shared or challenges posed by the organization. Collaboration tools can provide a space for employees where they can collaborate, communicate, engage and share the selection process updates in real time.

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How SharpCloud supports innovation

To support part of their Innovate UK funded project, Costain needed to undertake technology and innovation roadmapping in a digital environment to enable remote collaboration and collation of information.

"We required a bespoke innovation platform that enabled a process from our project team to be utilized. The format of SharpCloud enabled us to do this whilst simultaneously accessing and using other tools and features of the software such as story development, relationship mapping, resource allocating, commenting and voting for preferred data.

By gathering and communicating the information via a platform accessible to all, the process or project is fully transparent to all employees and stakeholders. We are able to create an infinite amount of information behind any 'headline' and a repository of information going forward."

Phil Pitman, former Rail Sector Innovation Manager at Costain Group PLC

8 Benefits of innovation management:

• Faster introduction of new products and higher launch success rates
• Earlier detection of non-viable ideas and better plans for implementation
• Improved deadline observation by creative teams
• Greater monetary efficiency within the creative team
• Better correlation between all departments for quicker results  and improved teamwork and relationships
• Increased customer satisfaction
• Reduced cycle time and less rework
• Smarter decision making 

An effective innovation management strategy enables your enterprise to remain ahead of the curve, and in turn, keep your clients satisfied. By creating a conversation within your business, you're enabling your employees to be inspired while maximizing the potential of the ideas that your organization wants to progress with.