This is not to say that firms should not move into new areas of competence indeed there has to be an element of change if there is to be any learning . But rather there needs to be balance and development strategy. This raises the third input to this phase – the fit with the overall business. At the concept stage it should be possible to relate the proposed innovation to improvements in overall business performance. Thus if a firm is considering investing in flexible manufacturing equipment because the business is moving into markets where increased customer choice is likely to be critical, it will make sense. But if it is doing so in a commodity business where everyone wants exactly the same product at the lowest price, then the proposed innovation will not underpin the strategy and will effectively be a waste of money. Getting close alignment between the overall strategy for the business and the innovation strategy is critical at this stage.
In a similar fashion many studies have shown that product innovation failure is often caused by firms trying to launch products which do not match their competence base.
This knowledge base need not be contained within the firm, it is also possible to build upon competencies held elsewhere. The requirements here is to develop the relationships needed to access the necessary complementary knowledge. Equipment resources etc,. Strategic advantage comes when a firm can mobilize a set of internal and external competencies the appropriability regime – which make it difficult for others to copy or enter the market.
Having picked up relevant trigger signals and made a strategic decision to pursue some of them, the next key phase is actually turning those potential ideas in to some kind of reality – a new product or service, a change in process, a shift in business model etc. In some ways this Implementation phase can be seen as one which gradually pulls together different pieces of knowledge and weaves them into an innovation. At the early stages there is high uncertainty — details of technological feasibility of market demand, of competitor behavior, of regulatory and other influences etc – all of these are scarce and strategic selection has to be based on a series of best guesses . But gradually over the implementation phase this uncertainty is replaced by knowledge acquired through various routes and at an increasing cost. Technological and market research helps clarify whether or not the innovation is technically possible or if there is a demand for it and if so, what are its characteristics. As the innovation develops so a continuing thread of problem finding and solving getting the bugs out of the original concept – takes place, gradually building up relevant knowledge around the innovation. Eventually it is in a form which can be launched into its intended context – internal and external market – and then further knowledge about its adoption (or otherwise) can be used to refine the innovation.
We can explore the implementation phase in a little more detail by considering three core elements – acquiring knowledge resources, executing the project and lunching and sustaining the innovation.
Acquiring Knowledge Resources:
This phase involves combining new and existing knowledge (available within and outside the organization) to offer a solution to the problem . It involves both generation of technological knowledge (via R&D carried out within and outside the organization) and technology transfer (between internal sources or from external sources).
As such it represents a first draft of a solution and is likely to change considerably in its development . The output of this stage in the process is both forward to the next stage of detailed development and back to the concept stage where it may be abandoned revised or approved.
Source: Managing Innovation