Innovation as a Management Process

One of America’s most successful innovators was Thomas Alva Edison who during his life registered over 1000 patents. Products for which his organization was responsible include the light bulb, 35 mm cinema films and even the electric chair. Edison appreciated better than most that the real challenge in innovation was not invention coming up with good ideas but in making them work technically and commercially. His skills in doing this created a business empire worth, in 1920 around $21.6 bn. He put to good use an understanding of the interactive nature of innovation, realizing that both technology push (which he systematized in one of the world’s first organized R&D laboratories) an demand pull need to be mobilized.

His work on electricity provides a good example of this; Edison recognized that although the electric light bulb was a good idea it had little practical relevance in a world where there was no power point to plug it into. Consequently his team set about building up an entire electricity generation and distribution infrastructure including designing lamp stands switches and wiring. In 1882 he switched on the power from the first electric power generation plant in Manhattan and was able to light up 800 bulbs in the area. In the years that followed he built over 300 plants all over the world.

As Edison realized innovation is more than simply coming up with good ideas. It is the process of growing them into practical use. Definitions of innovation may vary in wording but they all stress the need to complete the development and exploitation aspects of new knowledge not just its invention.

If we only understand part of the innovation process, then the behaviors we use in managing it are likely to be only partially helpful – even if well intentioned and executed. For example, innovation is often confused with invention but the latter is only the first step along the process of bringing a good idea to widespread and effective use. Being a good inventor is to contradict Emerson – no guarantee of commercial success and no matter how good the better mousetrap idea the world will only beat a path to the door if attention is also paid to project management, market development, financial management , organizational behavior etc .

What is Innovation?

One of the problems in managing innovation is variation in what people understand by the term, often confusing it with invention. In its broadcast sense the term comes from the Latin – innovate –meaning to make something new. Our view shared by the following writers assumes that innovation is a process of turning opportunity into new ideas and of putting these into widely used practices.

Innovation is the successful exploitation of new ideas Innovation Unit, UK Department of Trade and Industry (2004).

Industrial innovation includes the technical design, manufacturing management and commercial activities involved in the marketing of a new or improved ) product or the first commercial use of a new (or improved) process or equipment –Chris Freeman (1982) The Economics of industrial Innovation 2nd edn, Frances Pinter London.

Innovation does not necessarily imply the commercialization of only a major advance in the technological state of the art (a radical innovation) but it includes also the utilization of even small scale changes in technological know how (an improvement or incremental innovation) – Roy Rothwell and Paul Gardiner (1985) Invention innovation, re-innovation and the role of the user Technovation, 3, 168.

Innovation is the specific tool of entrepreneurs the means by which they exploit change as an opportunity for a different business or service . It is capable of being presented as a discipline capable of being learned, capable of being practiced — Peter Drucker (1985) Innovation and Entrepreneurship Harper & Row New York.

Companies achieve competitive advantage through acts of innovation. They approach innovation in its broadcast sense, including both new technologies and new ways of doing things –Michael Porter (1990).
Excerpts from: The Competitive advantage of Nations Macmillan London.