The management of innovation in firms

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Innovation management is focused on the systematic processes that organizations use to develop new and improved products, services and business processes. It involves harnessing the creative ideas of an organization's employees and utilizing it to bring a steady pipeline of profitable new innovations to the marketplace, quickly and efficiently.

For organizations like Altech, management innovation is the secret to success. But what is management innovation? Why is it so important? And how can other companies learn to become management innovators? The article from expert Gary Hamel answers those questions. A management breakthrough can deliver a strong advantage to the innovating company and produce a major shift in industry leadership. Few companies, however, have been able to come up with a formal process for fostering management innovation. The biggest challenge seems to be generating truly unique ideas. Four components can help: a big problem that demands fresh thinking, creative principles, or paradigms that can reveal new approaches; an evaluation of the conventions that constrain novel thinking; and examples and analogies that help redefine what can be done. No doubt, existing management processes in your organization exacerbate the big problems you're hoping to solve. To identify them, pose a series of questions for each one: Who owns the process? What are its objectives? What are the metrics for success? What are the decision-making criteria? How are decisions communicated, and to whom? After documenting these details, ask the people involved with the process to weigh in. This exploration may reveal opportunities to reinvent your management processes. A management innovation, the author says, creates long-lasting advantage when it meets at least one of three conditions: It is based on a novel principle that challenges the orthodoxy; it is systemic, involving a range of processes and methods; or it is part of a program of invention, where progress compounds over time.

Tactics of Management Innovation

1. Lateral Thinking - is about changes, look for what is different, makes deliberate jumps, welcomes chance intrusions and explores the least likely.

Thinking outside the box -

The notion 'thinking outside the box' is far more than just another management cliché. It is a very powerful concept worthy of deeper consideration in today's complex and rapidly changing world.

Leave Your Comfort Zone

Thinking outside the box is never easy, nor is it merely a reflection of mental brightness. To leave your psychological comfort zone and explore "solutions in the unknown world on the outside requires large measures of mental agility, boldness, and creativity and/or an inspirational leader who makes life in the old box so uncomfortable that getting out is the only option. The future rests in those willing and able to do so."

Creativity -

A "new" idea is a combination of old elements. Being able to devise new combinations depend on your ability to discern relationships between seemingly disparate items.

Creativity is the juxtaposition of ideas which were previously thought to be unrelated.' It is your ability to combine ideas in a unique way or to make useful associations among ideas.

There is virtually no problem you cannot solve, no goal you cannot achieve, no obstacle you cannot overcome if you know how to apply the creative powers of your mind, like a laser beam, to cut through every difficulty in your life and your work.

Creativity Quotes

"Happiness" is not in the mere possession of money; it lies in the joy of achievement, in the thrill of "creative effort" - Franklin Roosevelt

Cross - Functional Excellence -

Although innovation is driven by technology, required competence extends beyond technical know-how. In the new knowledge economy and knowledge - based enterprises, systemic innovative solutions, arise from complex interactions between many individuals, organizations and environmental factors. The boundaries between products and services fade rapidly too. If you wish to be a market leader today, you must be able to integrate in a balanced way different types of know-how that would transform stand-alone technologies, products and services into a seamless, value-rich solution.

Inspirational Business Plans- Successful Innovation

Innovation Management Team: "You can't do carpentry, you know if you only have a saw, or only a hammer, or you never heard of a pair of pliers. It's when you put all those tools into one kit that you invent." - Peter Drucker.

No Idea is Wasted!

Your mind can accept only those ideas that have a frame of reference with your existing knowledge. It rejects everything else. If your knowledge is functionally focused, you'll be open to new ideas related to your functional expertise only and will miss all other learning and innovation opportunities. If you develop a broad cross-functional expertise, no new idea will be wasted. It will immediately connect with the existing knowledge and will inspire you, energize you, and encourage your entrepreneurial creativity. The broader your net, the more fish you can catch

2. Leadership - is the process of directing the behavior of others towards the accomplishment of some common objectives. Leaders have vision

Leading Change - get away from old ideas

Starting Change with yourself - understanding your own strength and weaknesses in creative thinking.

Creative leadership - creativity support ( thinking techniques such as brainstorming, normal groups, Delphi)

Inspirational leadership- create an inspiring culture within their organization.

Inspiring leadership - They supply a shared vision and inspire people.

Entrepreneurial leadership - is the primary force behind successful change. Entrepreneurial leaders discover emerging business opportunities and empower employees to act on the vision.

3. Effective Motivation

Attitude motivation - attitude motivation is about how people think and feel " it is their self confidence, their belief in themselves, their attitude to life, be negative and positive.

Incentive motivations - a successful incentive program will not increase profits but can also raise morale and inspire staff loyalty. Program should include all he three greatest incentives, empowering people to do thing you enjoy doing, recognition in all its various forms and money.

Rewards systems - recognition and rewards motivate and encourage people to participate and make quality contributions.

4. Power of Entrepreneurship

Entrepreneurship creativity - select mentors, friends, and dream partners wisely. Come up with good ideas and convert them to profit.

Employee empowerment - Entrepreneurial leaders discover emerging business opportunities and empower employees to act on the vision.

5. Moving with Speed

Anticipating change - people make systems and can change system

Spotting trends -

Launching a crusade -

6. Team building and Team work

Team Culture - a supporting culture of innovation is a key success factor, amenable to the innovation programme and able to measure and reward people appropriately.

7. Knowledge Management

Idea Management - create new ideas and get things done

Creative Management - encouraged creativity and provide structure

Management Knowledge workers - make sure tools are available and policies and procedures are in place.

Question 2

Defining and discussion two approaches to Creativity and Ideation capable of explaining the difference between Creativity and Innovation


Creativity is the generation of new ideas. The innovative organization accepts that people are naturally creative and that they will channel this creativity into the organization. Creativity thinking is discontinuous and divergent. Edward de Bono ( 1970) coined the phase "lateral thinking" and this has stuck. It implies sideway leaps of the imagination ( or structured thinking process), rather than a continuous progression down a logical chain of reasoning.

Creativity is not about inventing something totally new, it is about making new - synergistic - connections. You don't have to be a special kind of a person to be creative. Everyone can do it, its not about who you are, its about what you do.

Creativity in individual

A function of Resources, motivation and Creative Thinking


Logical or analytical thinking is a step by step process. It is a continuous, one step leading to the next, until it converges to the only possible solution. De Bono refers to it as "vertical thinking" because it goes straight down the line from one state of information to another.

Differences between Vertical and Lateral Thinking

Logical Thinking Creative Thinking

Chooses Changes

Looks for what is right Look for what is different

Requires things to follow directly from another Makes deliberate jumps

Concentrates on relevance Welcomes chance intrusions

Moves in he most likely directions Explores the least likely

Creativity is a mental process involving the generation of new ideas or concepts new associations of the creative mind between existing ideas or concepts. An alternative conception of creativity is that it is simply the act of making something new. In order to start being more creative in Problem Solving and Decision Making, we need to change our thinking style (thinking out side the box) which includes.

Divergent and Convergent Thinking. Skills are very important in creativity. Some people are naturally creative because they have open mind.


Bringing ideas to life. It is the conversion of new knowledge into new products and service. Innovation is about creating value and increasing productivity, and therefore growing your business.

Success in business doesn't come from feeling comfortable. With many markets becoming more and more competitive as a results of new competitors from global or deregulated markets, those who innovate best will win in the future. You need to take risk, measure performance and embrace innovation.

Systemic Innovation

Strategic Innovation

Innovative enterprise strategy

Innovative corporate growth strategies

Venture strategies

Innovative competitive strategies

Business Innovation

New business models

New management models

New approaches to value chain management

New approaches to information, ideas and knowledge management

New forms of strategic partnership

New forms of selling and customer service

Organizational Innovation

Inspiring culture

New people partnership

Better internal climate, motivation, idea and knowledge management

New forms of employee & stakeholder participation

Better culture on innovation and innovation system

New knowledge, idea and creativity management systems

More efficient innovation metrics

Product innovation

New to the world products

New to the company and local markets products

Lines extensions

Improved products or services

Process Innovations

Innovative business process management systems (BPMS)

New processes and productions techniques

Quality and efficiency improvements

Novel lean and cleaner production methods

The process of Innovation can be broken into 3 major sections.

Ideation - generating and gathering ideas

Idea development - maturing raw ideas to a point where it can be seen whether their value is enough to pursue with implementation.

Implementation - putting the idea into action and realising the return on the idea.

Ideation Channels

Idea Bank

Strategic Conversation Concerstation






Question 3

Innovative Improvements

Launch an internal blog or a wiki dedicated to innovation

A blog is good if it allows for comments. Even better would be allowing each employee or department to start a blog internally and keep notes there. I like the idea of using a wiki on an intranet as long as all entries can be tied back to an employee. Otherwise you might end up with disgruntled employees defacing the wiki.

Reward ideas

A weekly best idea bonus, cash is always good, can go a long way. Be even better sports and don't 1099 the employees on the bonus; I hate it when companies do that. Let the employees declare it on their own.

Hold creativity or ideology sessions

I love brainstorming sessions and meetings. They really get the wheels turning. I think every department should have these at least once a quarter.

Tap into your customers

If this means involve customers in future company product improvements or enhancements, I think this is a good idea. If this means having somebody out there watching the blogosphere and engaging them one on one trying to address their concerns that is also a good idea. If it means using their information but not interacting with them then it's not a good way to tap into customers. Customers like to know their voice is being heard.

Respond to suggestions … don't let ideas fall into a dark hole

This is hugely important. Getting a suggestion is like a gift from the skies, even if the suggestion stinks. Make sure to acknowledge all suggestions by those two magic words that have the initials TY.

Celebrate success

Dignified department celebrations are a good idea. Got to be careful with company bashes. I'm reminded of Microsoft recently going hog wild over a beta 1 release that was years late in coming. Customers do not want to hear about huge company parties when projects are late. Work hard, party hard, but don't party hard before getting the work actually done and shipped to the customer.

Encourage risks … celebrate failures too

Risk taking is important to the success of any business, but don't go overboard like Sony is doing trying to over-protect their copyright. That's the type of failure nobody should be celebrating. The gist of this idea is solid though: nothing ventured, nothing gained.

Mix up work teams

Sometimes the people in the group are just wrong. Another good suggestion.

Understand driver of consumer behavior

This is something that many companies do spend a lot of time on, sometimes to their peril, IMO. Understanding consumer behavior means nothing if they don't take action to actually change their business to adapt to consumer behavior. Look again at Sony who right now should be out there disavowing their use of this rootkit software and instead is sending the message that this isn't a big deal. The RIAA and MPAA filing lawsuits against file sharers is another. They understand the behavior, sure, but instead of spending their energy and time trying to make their products more accessible legally they are sueing grandparents and kids. Yeah, that activity will definitely change consumer behavior - but in a very negative way.

Incorporate "innovation" into job descriptions

Perhaps I'm too idealistic, but I think every job should allow for some sort of innovation and creativity. If the employee is just punching a clock and feels powerless to provide any sort of creative feedback in the bigger machine then how interested can she/he be about their job?

System approach to Innovation

These are seven interwoven areas in system approach.

The organizational Models that support Innovation are:

Innovation project team

Expert networks

Shared services organization

The Innovation Charter

What innovation means for the organization

Why innovation is important

The strategic goals to which innovation will contribute

The targets of the innovation programme

How individuals can contribute to the programme and what rewards they can expect

The cultural impact the programme will have on the organization and what changes individuals can expect in their lives from their commitment to innovation (e.g innovation components in performance management and rewards systems).

The Role of the Innovation Process

It is generally agreed that Innovating activity is very important to organizations for tow reasons.

To increase profitability levels in the short term and give organizations the ability to deliver consistently the type of returns which shareholders expect.

To achieve a dominant position in the marketplace by raising market share and having the edge over competitors in terms of uniqueness or strength of products and services in those features which the customer values most.

In order to achieve the above goals, organizations consider the main key role of innovation to be in the incremental improvements of existing products and the consistent effort of introducing new ones. In this way, it is thought that orgainsation could become stronger and have the ability to corporate effectively in the long term.


Innovation is all about implementing new ideas, team work, communication and making change.