Innovation Management for the 21st century

Over the last decade many buzzwords have been tossed around in Management books. Servant Leadership, Customer-Driven transformation, Change Management, Operations Management, Entrepreneurship Management, Customer Relationship Management, Business Process management, Innovation Management, Brand Management and many more.

I believe Innovation Management is the most revolutionary idea in the management industry, as it is a way encompassing different aspects of an organization. Innovation is no longer pigeon-holed to technological advances from Research & Development team. It can come from anywhere and every part of the organization must operate in the new paradigm of looking for efficient ways of doing things.

In 1995, Clayton Christensen had introduced the term ‘disruptive innovation’ to the world. “Disruption” describes a process whereby a smaller company with fewer resources can successfully challenge established incumbent businesses [1].  In the same HBR article, ‘What is disruptive innovation’, Christensen and Co provide the example of Apple using an innovative business model. Even though iphone was a sustaining innovation in the smartphone market, it created a new market for internet access and eventually was able to challenge laptops as mainstream users’ device of choice for going online [1].

In the face of such disruption, companies need to always be on the lookout for changes in the market. Not only that, they need to develop a road map before disruption takes hold [2]. The top 10 transformational companies, on an average have new growth area with nee revenue as a % of total revenue at more than 25%. To change track from its core operations and sustain a new profitable one, a company must use innovation management for success.

Innovation is a powerful driver for creating value, competitiveness and profitable growth [3].

In 2014, referring to the confusion of who is a disruptor and who is not, Clayton Christensen pointed out, that a challenge being faced by management is lack of common terminology. ISO/TC 279 is the Innovation Management Standard. ISO 50500 addresses the following seven principles of an innovative organization [3].

Realization of Value

Future- focused leaders

Purposeful direction

Innovation Culture

Exploitable insights

Mastering Uncertainty

Adaptability. Transformation of the organization.

An initiative’s value can be realized through project management, program management or portfolio management [4]. Studies have shown that leaders make decisions in favor of short term growth to make shareholders happy. Many of the other innovations like good strategy don’t show results because of the strategy execution gap where the strategy is set by the upper management and the front-line mangers are told top down as to what needs to be done without knowing the ground realities. Change Management is a response while being proactive is a better way to be prepared for changes in advance. All these piece meal management efforts have a narrow scope while Innovation Management encompasses the whole organization’s DNA as well as its outlook.

Until now the Management theories, Management by Objectives, Zero-based budgeting, Decentralization, Total Quality Management, Supply Chain Management, Team Downsizing were all looking at inefficiencies in resource allocation, budget allocation, operations, each in its own little cloud and not looking at the organization as a whole and its long-term future. In this whole equation, you don’t hear about the customer and their needs.

In Mapping Innovation: A Playbook for Navigating a Disruptive Age, Greg Satell talks about Eric Haller from Experian DataLabs and his unique way of solving customers problems and then scaling those solutions, thereby enhancing the company’s portfolio.

With Innovation Management, companies like 3M have used Lead User Methodology to come up with breakthrough products. Customer-centric innovation is at the core of innovation Management. Shapiro adds that a customer-centric strategy demands that you think about customers’ unmet needs, and about products and services they may not even realize that they need yet [5].  “This leads to new products, new services, and new ways of delivering those products and services,” he adds. Some companies have gone a step further and involved customers in the brand management through their crowdsourcing methods. Dell’s Ideastorm, Procter & Gamble’s (P & G) Connect + Develop, My Starbucks Idea, Unilever Foundry are some of the examples of Corporate sponsored platforms where ideas are submitted to the sponsor [6]. Crowdsourcing can also be carried on through Intermediate platform providers like Spigit, Innocentive and Ideaconection, who have vibrant communities of cross-discipline inventors.

Have you seen how we moved from concepts to people? The most important part of the Innovation Management is the human pulse where ideas and the inventors count.

‘Unleashing innovation in big organizations could also be called ‘How to Not Waste Human Potential’.” – Alexander Osterwalder.

By following the ISO/TC 279 standards of Innovation Management, we will have organizations that are robust yet agile. Since everyone has a say in the innovation culture, the employees will be engaged and the vast human potential will be put to good use.

  6. Open source Leadership, Rajeev Peshawaria.

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