We suggest that innovation is a core process concerned with renewing what the organization offers (its products and / or services) and the ways in which it generates and delivers these. Whether the organization is concerned with bricks, bread, banking or baby care, the underlying challenge is still the same. How to obtain a competitive edge through innovation – and through this survive and grow? This is as much a challenge for non profit organizations – in police work, in health care, in education the competition is still there, and the role of innovation still one of getting a better edge to dealing with problems of crime, illness or illiteracy.
At this generic level we suggest that organizations have to mange four phases making up the innovation process. They have to:
Scan and search their environments (internal and external) to pick up and process signals about potential innovation. These could be needs of various kinds, or opportunities arising from research activities somewhere or pressure to conform to legislation or the behaviors of competitors – but they represent the bundle of stimuli to which the organizations must respond.
Strategically select from this set of potential triggers for innovation – those things which the organizations will commit resources to doing. Even the best resourced organization cannot do everything so the challenge lies in selecting those things which offer the best chance of developing a competitive edge.
This might be a simple matter of buying off the shelf or exploiting the results of research already carried out or it might require extensive search to find the right resources. It is also not just about embodied knowledge but about the surrounding bundle of knowledge often in tacit form which is needed to make the technology work.
Implement the innovation growing it from an idea through various stages of development to final launch as a new product or services in the external marketplace or a new process or method within the organization.
A fifth optional phase is to reflect upon the previous phases and review experience of success and failure in order to learn about, to manage, to process better, and to capture relevant knowledge from the experience.
Of course there are countless variations on this basic theme in terms of how organizations actually carry this out. And much depends on where they start from – their particular contingencies. For example large firms may structure the process much more extensively than smaller firms who work on an informal basis. And firms in knowledge intensive sectors like pharmaceuticals will concentrate more on formal R&D often committing sizeable amounts of their income to this activity whereas others like to emphasize on closer links with their customers as a route of innovation. Non profit organizations may be more concerned with reducing costs and proving quality, whereas private sector firms may worry about market share.
Networks of firms may have to operate complex co-ordination arrangements to ensure successful completion of joint projects and to devise careful legal frameworks to ensure that intellectual property rights are respected.
But at heart of the process is the same basic sequence of activity / innovation management which is about learning to find the most appropriate solution to the problem of consistently managing this process and doing so in the ways best suited to the particular solutions to the general problem of managing this core process will be specific.
We suggest that there are three key questions in innovation management which form the basis of this article.
1) How do we structure the innovation process appropriate?
2) How do we develop effective behavioral patterns (routines) which define how it operates on a day to day basis?
3) How do we adapt or develop parallel ones to deal with the different challenges of steady state and discontinuous innovation?