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Innovation Management

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Theme 1

Innovation Management – What is it and why it matters?

Abstract

Renewal is referred to as innovation and innovation management is the systematic planning, organizing, managing and controlling of ideas and inventions in an organization. This concept is very crucial at the present age as it gives a company a competitive edge over its competitors. Innovation management can be done through various methods including incremental, breakthrough and disruptive methods.

And despite having numerous challenges such as lack of proper communication channels, lack of transparency, resources, management, absence of clear innovation strategies, lack of employee empowerment, risk aversion, inability to change the status quo, innovation management in any organization is of extreme importance, especially in this age of digital transformation. Three possible ways of innovation management include creating a completely new offering, bringing modifications in the existing one or offering it somewhere with a different context. Organizations that do not innovate often and at a quicker pace are mostly are driven out of the market (Quinn, 1985).

 

Introduction

Innovation management is basically the systematic management of new ideas, inventions or innovations. It involves proposing strategic models that help firms to change according to the continuously shifting dynamics of the market. Thus, the concept refers to managing all the activities related to launching something new in the business (Utterback, 1994).

The management of all the activities such as launching new products and services in untapped markets, introducing better and unique market offerings than the competitors, modifying the internal business procedures to better compete in the market and developing advanced business models come under the umbrella of innovation management. Innovation management is basically an analysis of external and internal environment for the identification of potential opportunities for generating new ideas (Adams, Bessant and Phelps, 2006).

Innovation management is a diverse field that encompasses many aspects of business and moves from the initial ‘ideation’ step to the final stage of implementation. It begins with future management by identifying new trends and opportunities. Then innovation strategy is established which is basically a roadmap of managing all the new ideas and innovations in an organization.

Innovation control deals with measuring and controlling innovations. The protection of these interventions is done through patents and copyrights. All of these steps are undertaken in an innovative culture and external innovation resources are constantly exploited throughout the innovation management process (Hengsberger, 2018).

Literature Review

Innovation and its types

Innovation refers to something new. Research done by Schumpeter and Kirzner suggests that innovation can be brought in an organization through six different ways i-e new products, new services, new procedures, new distribution channels, tapping into new markets and new systematization. Moreover, according to the research, there are three different methods of innovation. Incremental innovation is the one according to which minute upgradations are being brought in an organization’s current products, services, processes and methods. Such innovation aims to improvise the already existing business operations. Breakthrough innovation is the one which brings about a revolution by the introduction of something new which replaces an already existing thing. Disruptive innovation is the one which is able to radically change a certain dimension of the business by introducing a completely new one (Johannessen, 2001).

Challenges in Innovation Management

Innovation management has many challenges. A hierarchical organization with too much red tape and top-down management is unfavourable for innovations. Such an organization does not support an innovative culture and growth mindset. In addition to that ‘risk aversion’ fails to generate new ideas. Inability to mitigate the risks is an ultimate challenge faced by many organizations. Moreover, substandard resources and infrastructure also undermine an organization as it is unable to learn. Finally, a lack of vision and improper innovation strategy leads to the faulty implementation process of the inventions thus leading disaster in growth (Westerlund and Leminen, 2011).

Importance of Innovation Management

Despite these challenges, is a need of the hour. The pursuit of competitiveness is increasing in this global economy and by always inventing something new is one way of gaining competitive advantage in the market. Organizations that are able to grab an opportunity and develop something new, stay ahead of the competition.

Moreover, technology is advancing day by day and require organizations to move at the same pace. Companies constantly disrupt the market through modernization and technological upgradations. And the ones that have nothing new to offer are driven out of the competition.

The customer trends are also shifting at an accelerating pace. is vital for companies to understand the changing needs and expectations of the consumers and respond accordingly (Dankbaar, 2003).

Role of incubators in Innovation Management

Understanding the significance of innovation management, business incubators are becoming an international phenomenon day by day. For instance, in Brazil, the government is playing a very important role in the establishment of business incubator culture. These business incubators are essential for creating advanced technology-based startups, modifying the already existing ones and establishing an overall entrepreneurial culture through innovation management (Rizzi, Wescinski, Poli and Jacoski, 2017)…