Innovations Management

Suhas Tambe
 Managing Innovations: an overview

Innovation is the heart of the global business

competition
Shorter product life cycles, decreasing brand
loyalty
Rapid generation of new products and services are
essential to improving/ retaining market share
New technology development
Managing new technologies and innovations
requires integration abilities
New breed of managers required.
An innovation is the successful commercial use
of an invention
An invention is the solution to a problem
Is innovation something which can be only
done in a laboratory?
Ability to innovate is more ubiquitous than
thought previously.
 Nature of Innovations

External and internal

Incremental or radical
Discovery push or need pull
 Areas of innovation

Strategy innovation
Business innovation
Organizational innovation
Product innovation
Process innovation
Technology innovation
Marketing innovation
 Innovation Management: major
challenges
Despite the tremendous utility of innovations,
few companies are in a position to identify,
create and exploit innovations on a regular
basis
Innovation pose both internal and external
challenges
 Internal challenges

Two areas
technical
human
 Technical challenges

Area most directly affected by innovation

relates to technology and production
What are the new technologies?
What is the cost?
Time required for technology transfer
What is the expected skill gap?
Fundamental technology inputs are invariably very expensive
Huge investments and short product life cycles are a marketers nightmare
Ever prevailing short market cycles
Breakthrough technology may lead to great wealth and value, but it could
also prove costly, time consuming and unprofitable
Technology selection important cost, time, implementation should prove
profitable over a period of time e.g..genetic engineering, Semiconductors
which have taken years to develop but have accrued profits over a period
of time.
As an alternative, major new technology can serve as a bundle of multiple
products and related generations of prodcuts.eg., software systems
Technology roadmap giving a clear and well communicated technology
strategy linked to the overall business objectives would be the biggest
challenge. E.g.. NANO
 Human Challenge

People make any innovation a success or a failure.

People are eventually responsible for the smooth
implementation of any new idea, system, process
or technology
Effective communication of a new idea in an
organization is critical
Inertia, resistance to change

Innovation should become an organizational

function
 Human Challenge -Individual barriers

Fear of
trying
change
risk
being laughed or making mistakes
appearing stupid by proposing the impossible
Showing ignorance
Showing personal thoughts
Being copied

Jealous of colleagues
Never done before, dont know how to do
Holding to past successes
Feel indifferent and apathetic about work
 Human Challenge -Group barriers

Interdepartmental rivalry
Traditional mindset
Negative influence of peer groups-their
responsibilities, not ours
Not done here, middle management friction-
everyday affairs
Interdepartmental friction-lack of trust
Indifference of peer group
Fear of being excluded from peer group.
 How does one overcome these
barriers
Communication is the first step in channeling innovation
Everybody must have clear understanding of the business objectives
and the gains offered by innovations in regard to these objectives.
Top management must create an atmosphere conducive to creativity
and innovation -innovation should be part of the organization's
culture
Others, besides Rand D must also get involved
Create a systematic infrastructure
Funds for innovation
Skill building exercises
Technical training sessions
Specialized laboratories
Top-down communication clarity
Facilitation of lateral communication.
 External Challenges

Get an innovation right with external environment as

well as the internal environment
Identify, describe and analyze external challenges of
business
Competition, globalization, changing customer needs
and wants, demographic changes, unions, govt.
intervention, societal influences
General challenges
Political, social/cultural, economic, technological
Specific challenges
Competition, customers, vendors/suppliers
 Political
Stability vs. turbulences
Policies -if not supportive, innovating will take back-seat, since it can be
capital intensive
Companies must built in enough flexibility to accommodate political
uncertainties.
Social/Cultural
resistance from society-perceived threat to traditional values
Beneficial outcome increases acceptability
Economic Challenges
National and global economic environment
Competition and open economies
Technological challenges
Technological influences in three categories
Enabling, product, processes
Competition
Customers
Needs, desires, value for money
Globalization and customization
Customer Relationship management
Vendors/Suppliers
Important since he has an important stake in the
business
needs to be a full member of the team
 How can organizations install proper
innovation management processes?
Innovations is largely used as a core competency to create competitive
advantage
Companies must have dual focus
Adapt to environmental innovations and also bring in their own innovations
into the market
Environmental innovations competitors, technology leaders, regulatory
authorities, service providers, ongoing developments in the external
environment
Internal innovations are necessary to remain continuously competitive.
Smart enterprises continuously innovate in order to stay ahead in terms of
customer satisfaction, market share, efficient operations, reduced costs
and overall improvement in effectiveness
A company has to be good at both adapting to the external innovations and
creating some of its own on a regular basis to drive home the competitive
advantage. Internal innovations should be difficult to emulate.
 Points to consider

Should the innovation process be a general

management function with a formal step by
step execution or should it be a specialist
function?
Innovations work on ideas
Where should new ideas come from?
Innovation should be a part of the work culture
Communication is key to managing innovations