Innovation management involves the process of managing an organization's innovation procedure, starting at the initial stage of ideation, to its final stage of successful implementation. It encompasses the decisions, activities and practices of devising and implementing an innovation strategy. Show
According to Gartner, an IT research and consultancy company, innovation management is a business discipline that aims to drive a sustainable innovation process or culture within an organization. Oftentimes, these innovation management initiatives utilize a disruptive method of change to transform business. In the age of digital transformation, organizations are faced with the need to innovate more and innovate quickly. Innovation drives business growth and helps organizations stay ahead of their competitors. Innovation management helps in generating new business models and creates new products, services and technologies designed for the changing market. Proper innovation management also boosts customer satisfaction and employee engagement. Innovation management methodsBroadly speaking, innovation can be incremental, breakthrough or disruptive.
Achieving innovation management successFor innovation management process to be successful, it is essential that the company support an innovation culture and make employees feel valued. This will encourage employees to generate quality ideas in return. Organizations today are leveraging collaborative technology like social networking to get feedback, which helps in generating a steady stream of ideas from stakeholders both within and outside the company. To make innovation management a routine part of business, many organizations follow a disciplined and cyclic approach. Ideation is the first step to innovation and incentives and feedbacks help encourage a steady flow of ideas. The next step in a well-managed innovation process is to identify the most valuable and viable ideas. Companies can then move forward to create prototype products based on the shortlisted ideas and implement them to see how they work. In the final step of full implementation, it is important to evaluate the outcome to see whether the desired business goals were met once the ideas were implemented. It is also necessary to engage the C-suite in discussion about innovation management to make sure that the ideas generated are in line with business goals. Organizations are also increasingly looking for innovation managers, who are equipped with specific skills, to drive innovation and oversee the innovation management process.
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can come in three different forms. 1) The development of a new product, such as the Fitbit or Amazon’s Kindle. New product development may be considered radical innovation as it can be a game-changer in the market. 2) An improvement of the performance of the existing product, such as an increase in the digital camera resolution of the iPhone 11. 3) A new feature to an existing product, such as power windows to a car. , the less risky and most frequently seen, is the improvement of existing products. An example of this is the development of the first Walkman, a personal music player released by Sony in 1979. It combined an audio cassette player and headphones. As the story goes the Sony chairman wanted a way to listen to his opera music on a long international flight. His request was sent to a Sony designer who prototyped something by working with an existing Sony product, a bulky tape player popular with journalists. But the designer modified it to be a playback-only version that could be used with headphones. He rigged up a prototype in time for the chairman’s next flight and the Sony Walkman was born. This wasn’t a technological breakthrough, but compared to previous products it was a breakthrough in imagination in incremental product innovation. is the creation of a whole new product. This category is riskier than incremental innovation and can disrupt entire markets. One famous example is the launch of the Apple iPod. It not only served as an improvement to portable music players but also made digital music more popular and introduced access to the Apple App Store. It disrupted the music industry and created a whole new ecosystem. Today’s product managers are like mini CEOs of their products. They own the decisions about what gets built and influence aspects of how it’s launched. But the product managers aren’t the actual CEOs and they don’t have direct authority over most of the things required for product innovation. They arm themselves with the vision and influence and focus on leading teams with the company’s strategy in hand. Product leaders innovate by leveraging collaboration, bringing together the best people and ideas, and setting the stage for innovation. Why is Product Innovation Important?Product innovation aids companies in doing the following:
Where should the responsibility for innovation lie? Companies need to create an organizational structure to drive innovation; there are many variations and approaches. A product innovator must recognize the company’s innovative business structure and its inherent roadblocks and then determine how to overcome them. The most common approaches companies use for innovation include components of design thinking, rapid prototyping, lean innovation, and open innovation. Design thinking is a process that brings together what is desirable from a human point of view with what is technologically feasible, and economically viable. The design thinking process starts with a deep understanding and empathy about the customers’ needs. Then, it goes through the steps of defining the problem, ideating the solutions, prototyping the ideas, and testing the ideas. IBM developed an internal framework for innovation, naming it IBM Design Thinking. What are the Seven Stages of Product Development?New product development teams often consist of top management, specialists from sales and marketing, research and development, manufacturing, and finance. This team will conduct market research and gather customer and employee feedback to consider when formulating ideas for new products. The team will also look at the feasibility of ideas and resources available as well as risks. This group considers and plans new and improved products in seven different phases, as shown below:
The most innovative organizations rely on systems of individuals and teams working across functions in their organizations. Innovation isn’t the work of only scientists, engineers, or marketers; it’s the work of an entire business and its leadership. Watch the YouTube video below, “Product Development Process: 7 Essential Stages”, to learn more about each stage in the new product development process.[/footnote] Transcript for “Product Development Process: 7 Essential Stages” Video [PDF–New Tab]. Closed captioning is available on YouTube. What are the Success Factors for Product Development?There are different factors that influence the success of new product development. For instance, the entire team needs to be competent and committed to the success of the product. The product designer will be responsible for utility and usability, but there are a number of factors that are beyond the control of the designer. An effective new product development (NPD) function is supported by the right tools and the right business culture; it depends on teamwork underpinned by organizational knowledge and strong strategic direction from above. But it is also characterized by systems and processes that are agile, adaptable, and repeatable. Businesses should carefully consider how they can develop the precise mix of culture, people, and digital infrastructure to meet these demands in the most efficient and competitive way possible. The following eight factors will influence the success of new product development. 1. Top Management SupportThe support of top management is essential, without it the project will not get the resources and financial budget to implement the development phases. The design team must learn to convince top management to support the project, or the entire project collapses. Creating a culture that values innovation and encourages it at every level has been found in countless studies to be one of the key indicators of success in this area. The focus, resources, and respect that your organization channels towards NPD will reflect the priority it is given in the minds of those who can influence its direction the most. Steve Jobs, for example, based the leadership culture of the Apple Company on brand fanaticism and radical customer devotion and propelled the organization into a new and unprecedented era of innovation. 2. Market OrientationMarket orientation analysis should guide the team on how to meet the needs and wants of customers. Investopedia defines market orientation as follows: “Market orientation is a company philosophy focused on discovering and meeting the needs and desires of its customers through its product mix.” It seems reasonable to suggest that while a design team does not have control over company philosophy it should be in a good position to influence this. Conducting user research and where appropriate market research – two fundamentals of developing high-quality user experiences; will enable the discovery of customer/user needs and how to meet them. 3. TechnologyEnsure the technology being used to introduce the product to the market is compatible with the market. It is imperative to use a technology the market can resonate with. For instance, a multi-million dollar software or hardware requirement may make the product inaccessible to small consumers. 4. Knowledge ManagementThe company should ensure data and information are accessible to all. A digital document management system can act as a repository of information vital for the success of new product development (NPD) initiatives. It can give teams a firm grasp of project progress, deliverables, and dependencies. It can facilitate easy access to the documentation they need to complete tasks. It can allow different teams to work on and suggest changes to those documents. It can give overall governance of a project to a nominated individual, who can use its publishing and curation tools to keep projects well managed and on track. Good knowledge sharing capabilities reduce mistakes, increase the speed of delivery of goals, and build closer more aligned teams. 5. New Product Development StrategiesThe responsibility for drafting and implementing strategies is a shared goal between the development, design, and management teams. These parties should coordinate their activities to ensure there is uniformity in their decisions. Having clear processes for design and development is essential. While these may be tailored to fit specific circumstances – a methodology for working that is clearly understood and agreed to by all members of the product development team is highly likely to produce better results than those created with no formal process. Responsibility for new product development strategies is likely to be shared between design, product management, and development. This means that the design team will have some input into the strategies chosen and will be able to influence these strategies with their user research to guide the strategy to fit the needs of their users. It is probably fair to say that product management will normally have the final say on a strategic direction but designers have plenty of room to negotiate with product managers to ensure better outcomes. 6. New Product Development SpeedSpeed to market is a critical factor in success. If the new product development process takes five years but a competitor’s process takes only two years – it is likely that no matter how good the team’s designs are; they will have been eclipsed by the time they get to market. Refining the design process to maximize speed whilst protecting the user experience is a delicate balancing act. Designing for a great user experience is within the design team’s control, however, the development process speed is much less likely to be within the design team’s control and their ability to influence that speed may be minimal. 7. New Product Development ProcessHaving clear processes for design and development is essential. While these may be tailored to fit specific circumstances – a methodology for working that is clearly understood and agreed to by all members of the product development team is highly likely to produce better results than those created with no formal process. The design team will, normally, have some input into these processes and be able to negotiate modifications to processes when they fail to produce optimal results. There is little control for the design team over the way other teams execute these processes. Failure in execution, from other teams, is one of the few areas where it is reasonable to say that failure was completely outside of the design team’s control. 8. New Product Development TeamNew product development normally brings together teams of diverse people from all across an enterprise. It is strongly suggested that these diverse teams tend to be highly creative and more successful than teams of a more standardized nature. The way teams work together is a critical factor in their success and designers operating as part of such a team have their part to play in this. Professionalism and leadership can be displayed by any member of a team (including those without official leadership and management roles) and while the design team cannot bear any responsibility for the actions of others within a team – they bear complete responsibility for their own actions. As Michael Jordan, the world-famous athlete and basketball superstar says; “Talent wins games, but teamwork and intelligence wins championships.” How Can Product Innovation Be Combined with Other Innovation Types?When a company works to combine multiple types of innovations, they often produce powerful results. Top innovators (those repeatedly launching successful offerings) integrate twice as many types of innovation as the average innovators. “Almost all of the enterprises that we celebrate as leading innovators routinely use multiple types of innovation – and handily outperform the average firms that innovate more naively … Significantly, the top innovators outperform the S&P 500. Integrating more types of innovation can help deliver superior financial returns.” Many firms are trying to mix products with services in an effort to boost revenue and balance cash flows. Hybrid solutions—products and services combined into innovative offerings—can help companies attract new customers and increase demand among existing ones by providing superior value. Such offerings are commonplace—think Apple (the iPod product combined with the iTunes service) and Xerox (copiers and printers bundled with maintenance or customer support services). For these and many other companies, hybrid solutions have spurred growth or helped reverse market-share or profit decline. Developing hybrid solutions can be tricky because various combinations may have potential. A hybrid offering is most likely to yield sustainable returns if the dependence between the product and the service can be increased and if the offering is scalable.
Let’s look at how Nike combines the Ten Types of innovation to delight customers and stay ahead of the competition. “A Product Performance company at its core, Nike has made leading sportswear and equipment for decades. In 1985 they made a remarkable innovation, by signing then-rookie basketball star Michael Jordan to endorse the Nike brand. This trend of sports star endorsements continues strongly today, to help the likes of Nike and Adidas maintain market dominance. In 1990, Niketown was launched – a Channel innovation, to present ‘retail as theatre’. The flagship stores cost millions and were clearly never going to produce a return on investment by selling goods in-store. Instead, the initiative was funded by the advertising budget; the stores could do more to build Brand innovation than any ad campaign. In recent times Nike has launched Nike+, a leading Product System that is integrated into the sportswear range and allows runners and athletes to track their movements. It also integrated with Apple products in a Network innovation. These steps alone touch on half of the ten types, and as a result, Nike is consistently one of the leading brand names in the world.”
Let’s look at how Method combines the Ten Types of innovation to delight customers and stay ahead of the competition. The product Method is a non-toxic line of natural home care products. The various offerings are sold in more than 40,000 retailers worldwide, including Target, Whole Foods, and Kroger. Method’s cleaning bottles are made from 100% post-consumer recycled plastic while the company itself is a “Cradle to Cradle” endorsed company; more than 60 of its products are certified with the C2C stamp of environmentally friendly approval. Internally, Method practices what it preaches: it offsets its carbon emissions, works within a LEED-certified sustainable office, and does not test its products on animals. The company Method combined five types of innovation in the following way:
References(Note: This list of sources used is NOT in APA citation style instead the auto-footnote and media citation features of Pressbooks were utilized to cite references throughout the chapter and generate a list at the end of the chapter.) can come in three different forms. 1) The development of a new product, such as the Fitbit or Amazon’s Kindle. 2) An improvement of the performance of the existing product, such as an increase in the digital camera resolution of the iPhone 11. 3) A new feature to an existing product, such as power windows to a car. is the concept of growing or improving a company by making a succession of small-scale improvements to existing products, services, processes, and tools. is the creation of a whole new product. |