Challenges in Innovation Management

By

Reena Prabha
(MBA)
Freelance Writer
Hyderabad, A.P.
 

Innovation represents the core renewal process in any organization. If an organization want to survive in today's turbulent environment he should have to prepare for renewing the offerings and its delivery process to their stakeholders. Innovation gives two distressing conclusions- first, that most innovations which destroy the existing order originate from newcomers and outsiders to a particular industry, and second, that few of the original players survive such transformations. So, here the question is not to innovate but how to implement the innovation successfully. Managing innovation becomes one of the key strategic dimensions for organization of all the size and from all the sectors.

The word innovation originally comes from Latin word 'innovare' that means "to make something new". The most exhaustive definition is presented by the innovation unit of the U.K. department of trade and industry who see it simply as 'the successful exploitation of new ideas".

Every organization have to manage four different phases in the process of turning ideas into successful reality; scanning the environment, strategic selection of Key, Selecting most feasible and profitable option, implementing  the innovation to ensure success from idea generation to final launch of the product.  Innovation management is about learning to find the most appropriate solution to the problem of consistently managing this process, and doing so in the ways best suited to the particular circumstances in which the organization finds itself. There is not a single best way to do this as there are some challenges which are involved in innovation management. There will always be a need to develop new approaches to meet new and emerging challenges.

Challenge 1: why change?

As we know that we are living in the doubtful world where the only certainty is that simply sitting also carries high risk. Change is necessary for every organization if they are willing to stay in the market for long term. Agile firms constantly re-invent themselves to solve the puzzle posed by the threat and opportunities in their environment by adopting new technology and other novel way to do the things. It may involve reconfiguring products, processes or markets. And in each case it involves learning and unlearning and it requires strategic direction to focus this process.

Challenge 2: what to change?

Even if firms can recognize and accept the need for continuous innovation they may find difficulties in framing an appropriate innovation agenda. Different agenda may be in the area of product, process, market positioning and underlying business model. After selecting a feasible agenda attempt is made for continuous and radical improvement to ensure success.

Challenge3: understanding innovation

There is often considerable confusion between 'invention' and 'innovation'. Invention describes about the moment of creative insight which first opens up a new possibility as Edison is said that "it is 1% inspiration, 99% perspiration!". There are lots of examples in the history that distinguish invention from innovation. As, Spengler invented the vacuum sweeper but Hoover innovate it. Howe developed the first sewing machine but singer took from invention to widespread acceptance means he innovates the product at large. Sometime it is thought that innovation is all about science and technology creating new opportunities. Sometime it is also viewed that 'necessity is the mother of invention' may sound persuasive- but a totally marketing led approach to innovation may miss some important tricks.

Challenge4: building an innovation culture

Building an innovative culture is not a small task and it requires heavy effort from the organization. Sometime copying may simply make the problem worse. Research suggests that the task of managing innovation is all about creating firm specific routines - repeated, reinforced patterns of behavior - which define its particular approach to the problem. 'Routine' in this sense does not mean  robotic but it does mean an established pattern-'the way we do things around here' - which represents the approach a particular organization takes to dealing with the innovation challenge. Innovation routines are increasingly recognized as contributing to competitive advantage and one important feature is that such routines cannot be simply copied from one context to another; they have to be learned and practiced over a sustained period of time. Routines can begin by the chance recognition of something that worked or as the result of trying a new and different approach. But if they work repeatedly, they gradually get established and eventually formalized into structures and procedures - until finally they are part of the organization's personality.

Challenge 5: continuous learning

Continuous learning is necessary for the development of every organization and for this they have to develop some 'good practice' model. In the good practice, we know how an organization can create and deliver a stream of new products and services. There are some key features of emerging 'good practice' model- systematic process for progressing new products, early involvement of all relevant functions, overlapping/parallel working, appropriate project management structures, cross-functional team working, advanced support tools, learning and continuous improvement. If we consider about the trouble with innovation, as we have already seen, is that it is not a static problem to which we might try and find a particular solution, which fits. Instead, it is a mutating and shifting set of puzzles that shift and change over a period of time.

Challenge 6: high involvement innovation

We know that traditionally innovation has been the area of the specialist who often works apart from the mainstream of the organization's operations. Innovation is fundamentally about creative problem-solving and as environments become more turbulent and uncertain, so the requirement for this capability increases. With uncertain markets, rapidly changing technological threat and opportunities, increasing regulatory pressures, shifting customer and competitive requirements, and a host of other variables to deal with the likelihood of getting the 'right' innovation response is low. Organization need to increase their innovative capacity, and one powerful mechanism for doing so is to extend participation in the process to a much wider population. This simple point has been recognized in a number of different fields, all of which converge around the view that higher levels of participation in innovation represent a competitive advantage. Similarly, the concept of 'lean manufacturing' emerged from detailed studies of assembly plants in the car industry and has since diffused widely around the world and across the business sectors this model emphasis on team working  and participation in innovation. Studies of high performance organizations, especially those, which achieve significant productivity improvements through their workforces, place considerable emphasis on involvement in innovation. All these discussion focused on the concept of 'learning organizations'. There is nothing neither new nor difficult in this concept; indeed, it would be hard to disagree with the premises that we need as much creative problem-solving as possible and that everyone has the basic wherewithal to do it. Such high involvement innovation lies at the heart of the 'learning curve' theory which has had such a strong impact on strategic thinking; learning curves only work when there is the commitment and enabling structure for participative problem solving. The difficulty comes not in the concept but its implementation. Mobilizing high levels of participation in the innovation process is unfamiliar and, for many organizations, relatively untested and apparently risky. The challenge is thus one of building routines- establishing and reinforcing behavior patterns. To begin to build high involvement innovation some kinds of routines are considered by any organization.

Challenge7: dealing with discontinuity

Much innovation can be seen as a 'steady state' activity. Of course it is about change, but it takes place within a framework which is relatively consistent. Most change happens as incremental developments of what is already there-'doing what we do better'. For example, theories of innovation dynamics suggest that when a new product concept emerges there is an initial period of uncertainty during which there is considerable experiment around different configurations. But then a 'dominant design' or 'technological trajectory' becomes established and the emphasis shifts to incremental improvements and variations on this basic theme. The same can be said of process innovation- the introduction of radically new process is followed by a long period of refinement and improvement, stretching and developing the performance of that process, deriving out waste, eliminating bugs, etc. this pattern of innovation is sometimes called 'punctuated equilibrium', borrowing a term from the field of evolutionary biology which explores how species emerge and develop. But there are points at which the rules change. It may well be as a result of scientific progress creating new possibilities, or it may be a result of dramatic shifts in the demand side for innovation. This kind of transition poses very big management challenges. Historical evidence suggests strongly that when such discontinuous changes take place the old incumbents do not usually do well and it is at this point that new entrants become key players. In part this is because of the high level of investment committed to the older generation of technology which established players have but there is also much to suggest that organizational barriers are also a problem. Established players are not always quick to pick up on the signals about change or to make sense of them, they may react too slowly and in the wrong directions- or they may simply try to deny the importance or magnitude of the change affecting their business. The challenge here is to develop what some writers have called 'the ambidextrous organization'. That is, to manage under one roof to operate routines for 'doing what we do better' innovation and simultaneously to allow space for another set of routines for 'doing differently'- moving beyond the envelope into new and uncharted territory. The risk, if they cannot develop these two sets of routines, is that people will migrate out of the organization to set up their own operation.

Challenge8: managing connections

Inter-organizational networking is becoming an issue of considerable interest amongst researchers, policy-makers and practitioners. In part this reflects the perception of advantages of networking over traditional transactional models of organization, in which there is often a trade-off between modes of interaction and in part it acknowledges the impact of technological and market changes which have blurred the boundaries between enterprises and opened up the arena in which new forms might emerge. 'virtual enterprises', 'boundary-less organizations' and  'networked companies' are typical examples of the thinking and experimentation which is going on to try and establish different approaches to the problem of inter-organizational relationships. There are some core processes in inter-organizational networking - network creation, decision-making, conflict resolution, information processing, knowledge capture, motivation/commitment, risk/benefit sharing, and integration; that should be managed effectively. Arguably, inter-organizational networks will be more or less effective in the ways in which they handle these processes. Building and operating networks can be facilitated by a variety of enabling inputs- for example, the use of advanced information and communications technologies may have a marked impact on the effectiveness with which information processing takes place.

Conclusion:

From all the above discussion we can say that if once the firm has mastered the basic 'skills' of innovation, it needs to look at how well it can involve the full range of its staff, how well it can manage to operate in networks rather than on its own, how well it can handle continuous and discontinuous changes, etc. this makes the management task not simply one of building and sustaining routines for innovation but also-and most importantly- one of creating the underlying learning routines, which enable the organization to do so.
 

Reena Prabha
(MBA)
Freelance Writer
Hyderabad, A.P.
 

Source: E-mail April 11, 2007

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