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What is Innovation Management?


Innovation “Management” as a term, doesn’t sit well w/ me. Just like Knowledge “Mgmt”. KM failed in part b/c of the inherent controls

Sameer Patel, April 22, 2009

I thought this was a good comment by Sameer, as it reflects a couple things:

  • Nascent field of technology tools that specifically facilitate and improve corporate innovation is just becoming understood
  • Concern that the unpredictable and rough-edged aspects of idea generation will be smothered by ham-handed managerial controls

Seeing what’s happening with customers at Spigit, I can safely say that the field of innovation management is much richer and collaborative than the term might connote. It’s not so much “control” management as it is “optimization” management. It’s a recognition that companies have significant margin for improvement in their innovation processes and outcomes.

With that in mind, I wanted to put forth eight elements that help describe “innovation management”. This list is by no means exhaustive, but it should give you a feel for what the field is about today.

#1: Innovation benefits from a range of perspectives

For most of our industrial history, innovation has been the province of an internal R&D team. Those smart geeky types who labored to create the next generation of products for big concerns. Fast forward to where we are today. With the rise of the Information Age, more people have a knowledge-based relationship with their employers.

Contributing what you know has become the dominant part of work in Fortune 2000 companies. Leveraging this trend into the innovation realm is a natural extension of employees’ work. And indeed, once done, it becomes apparent that so-called “line workers” have a lot of valuable knowledge, experience and ideas as well. You don’t need an advanced degree to understand a glaring customer issue or a better way to manage field operations.

Studies show that exposing ideas to a wider range of perspectives significantly improves them. In terms of management, the change for companies is elevating the importance of sourcing ideas from throughout the enterprise, as well as outside of it. One example: in this video on how it approaches innovation, Pfizer notes that “Ideas aren’t just sitting at headquarters. There are fantastic ideas all over the company.”

#2: Four of the most damaging words an employee can say: “Aww, forget about it”

What If I Fail cartoonIdeas come in various forms: disruptive, product and operational. And they hit employees at varying times as they do their work. Sure, a lot of these ideas won’t be feasible. But a lot will.

The problem for companies is that employees self-censor, either because (i) culturally they’re not encouraged to post ideas, even potentially bad ones; or (ii) there’s no way to easily capture these.

The recognition that there is valuable intellectual capital in the ideas that emerge from employees’ knowledge and activities is core to improving corporate innovation. Changing organizational focus to foster more ideas from all quarters, and providing the resources to capture these are core to what innovation management means.

#3: Create a culture of constant choices

Jim Collins spoke recently at the Front End of Innovation conference. A key theme from his speech was that great companies enable constant choices. By this, he means that external markets are constantly changing. Companies that are maintaining a good velocity of ideas are the ones that succeed long-term in industries.

This is actually a pretty significant cultural dynamic. Companies can be quite adept at execution, and throwing choices in front of everyone can disrupt that strength. So figuring out “their way” to create a culture of constant choices is really the hard work.

This is part of what is meant by innovation management.

#4: Looking at innovation as a discipline

Innovation is a Top 3 priority for companies, reports Boston Consulting Group. Indeed, BCG notes that innovation leaders generate 430 basis points more in shareholder returns than do average companies. So how does a company systematically address innovation as a discipline?

Companies apply resources and attention to a number of other disciplines: sales, customer relationship management, supply chain management, managerial accounting, etc. Looking at innovation from a similar perspective is emerging as an important strategy.

A number of large corporates have established internal innovation-focused executives. These aren’t employees who are supposed to dream up all the ideas. Their work is on establishing innovation as a discipline. Their charge is wide-ranging, including HR, executive attention, focus areas for innovation, internal communication, processes and selection of technology to facilitate. While I wasn’t around in the rise of the CRM era, presumably there was similar work by earlier generations of employees.

The work of making innovation a discipline is part of innovation management.

#5: Focus employees’ innovation priorities

Each of us knows a lot. From a variety of activities and interests. Work. Hobbies. Family. Locale. Life. I’ll bet you come up with ideas and encounter problems to be solved for a wide variety of things.

For corporations, this wealth of experience is an asset, but it does require some tuning. For ideas, you never know when someone’s personal church activities might have relevance to a product idea for the company. You want that variety of perspectives to inform and improve ideas.

At the same time, there needs to be a channeling of where employees’ ideas are focused. If executives don’t lay down directional areas for innovation, employees’ time on innovation will not be as valuable as it could be. Of course they’re going to have a range of ideas. But which ones are most pertinent to the company’s success in the market?

Channeling employees’ innovation focus is part of innovation management.

#6: Recognizing innovation as a funnel with valuable leaks

When one views innovation as not just game-changing disruptive ideas, but including incremental ideas, it becomes clear that innovation is fundamentally a funnel. Start with a large, ongoing quantity of ideas drawn from employees, customers and partners. As discussed in #2 above, you really want to get as many of these ideas as you can.

Ideas must then go through a winnowing process. Some will get stronger, and advance to projects. Some will fall away as not feasible.

And from all this intellectual activity around ideas, new ideas will emerge. It’s natural. Once employees are in the mode of generating and assessing ideas, it nwill be natural for new ones to emerge. Really, this arguably is the case for a lot activities that foster interaction among employees. But in this case, the social object around which they’re interacting is an idea. In terms of instilling a culture of constant choices, interaction around ideas promises to be a key part of achieving that.

Managing the funnel is part of innovation management.

#7: Establishing a common platform for innovation is a revolutionary step forward

Consider how employees innovate today. You have an idea, what are you going to do with it? Certainly you’ll sound it out with peers, which is illustrative of the fact that innovation is a social activity. Then what? Tell your boss. Email it. Enter it into a customer service database. Put it in a PowerPoint. Try to schdule meetings.

When you consider what employees must do today to move an idea forward, it’s really pretty daunting. Under this system, corporate innovation requires phenomenal acts of heroism to get anything done. Ad hoc, siloed applications make companies the poorer for the ideas they’re missing. Existing idea management processes don’t allow cross-enterprise visibility, which means collaboration among interested parties is limited. An unfortunate outcome is that the pace of innovation falters as ideas lose share of mind.

Creating the common community space for innovation is a dramatic leap forward in how companies foster innovation. The same mechanisms of departmental outreach and email are certainly still available. But now, ideas can get an audience of thousands, allowing them tap different reservoirs of experience and perspective. Senior executives csn see ideas that previously would languish in lower levels of the organization.

Creating this common platform is part of innovation management.

#8: Innovation must be more than  purely emergent, disorganized and viral

Innovation management today draws heavily from the themes of Enterprise 2.0. Key to the power of social computing is letting employees’ activities and knowledge apply itself naturally where it’s needed throughout an organization. For purists, this means get rid of oversight and managerial prerogatives.

To create ongoing, sustainable innovation, there needs to be a programmatic approach. Riding the pure emergent form of Enterprise 2.0, or continuing the current ad hoc, siloed approaches to idea management, is insufficient. Employees will be busy with projects and tasks they need to execute. Perhaps culturally, innovation hasn’t been a focus. There will need to be a push to raise the awareness of innovation. And some organization to channel it where it’s needed.

There will also be ideas that are valuable, but which may not resonate with a broader section of the employee base. Leaving the emergence of these ideas purely to viral dissemination means leaving some of them buried at the departmental level. Companies need ways to ensure valuable ideas are caught and surfaced systematically.

Combining bottom-up emergence with top-down priorities and organization is part of innovation management.

Wrap-Up

As I said above, innovation is a multi-faceted activity, with many moving parts and ways of approaching it. What I’ve listed here represent my way of clarifying what the field of “innovation management” is about. If you think I’m off or missed something, let me know in the comments below.

Thanks.

Under this system, corporate innovation requires phenomenal acts of heroism to get anything done
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About Hutch Carpenter
Senior Consultant for HYPE Innovation (hypeinnovation.com)

13 Responses to What is Innovation Management?

  1. Hi Hutch,

    Are you aware that a number of people see Knowledge Management and Innovation Management as the same thing?

    Reading your list of elements, I have to agree that I don’t see anything under the “Innovation Management” banner that wouldn’t sit just as comfortably under “Knowledge Management”.

    Are you simply distancing yourself from Knowledge Management because of the perception that it has “failed”, or do you think that Innovation Management is truly different and if so, how?

    • Hey Stephen – thanks for stopping by here. You pose a question that hadn’t really crossed my mind. At least in terms of today’s knowledge management movement.

      My post was in response to something Sameer said. Now if you look at his comment, you’ll see some of the legacy of earlier efforts where knowledge was generated in an orderly,controlled way. Knowledge repositories of KM 1.0 held promise, but seem to have gotten some flack in press coverage of KM.

      It’s these legacy aspects of KM’s promise vs. results that continue to burden KM in some quarters. Sameer’s comment is just one example of that.

      I’m not particularly knowledgeable about the KM field, as I didn’t participate in its rise in the 1990s and 2000s. I am aware that KM today has taken on much more of the Enterprise 2.0 philosophies, as more organic, in-the-flow ways to capture knowledge.

      We never talk about “jazz management” or “painting management” or “novel writing management”. In Sameer’s comment, I see an implicit comparison to trying to control those free-form, creative endeavors and “innovation management”. You can’t.

      My point here is to say that innovation definitely has a creative element, but it is tied to a very real purpose for companies. As I say in point #8, bottom-up, emergent, free-form ideas must be integrated with top-down support, prioritization and organization.

      If what I write works for KM today, that’s cool.

      • Hi Hutch,

        Well, I’m relatively new to the field of KM myself, but that’s a reasonable summary of how KM tended to be implemented in the past.

        These days, KM is about how we can foster grassroots activities while influencing organisational structures in a way that encourages better distributed problem solving and knowledge integration. The ultimate goal is to produce organisations that are more resilient, adaptive and innovative.

        So I see KM as operating under very similar principles to Innovation Management, but perhaps with a slightly broader focus.

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  3. Scott Anderson says:

    It seems like a lot of ideas around this topic are percolating but haven’t reached critical mass. For example, in 2001 HBR had a fascinating article on swarm intelligence, and suggested that simple rules could produce emergent and efficient behavior. Social networks are enabling these kinds of things.

    The fascinating analogies to “idea markets” (another faded buzzterm) are that good ideas draw support from others, creating a buzz that draws even more support, much as ants laying a trail to food sources lay down pheromones that in turn attract other ants, making the trail stronger.

    On the web, a similar trail is layed down to websites through clicks and links, which in turn draw more clicks and links, unless the content turns out to be useless, in which case the links evaporate and the site plummets in popularity. Which is why many SOE guidelines for websites recommend constant refreshing of content.

    Of course, good ideas are not just popular ideas. James Surowiecki in “The Wisdom of Crowds” suggests that diverse groups come up with better results if they are invested in the outcome and not too heavily influenced by other group members.

    The acid test, of course, is what gets funded and what makes money. I always wonder how Hollywood makes those decisions based on how many bad (to my taste) movies get made.

  4. Pingback: Corporate Innovation Is Both Emergent and Managed « I’m Not Actually a Geek

  5. Pingback: Social CRM: MBA-Dissertation » Blog Archive » Corporate Innovation Is Both Emergent and Managed

  6. Great thoughts and “how-tos.” A few additional thoughts, and report on some new research, at http://bit.ly/13quii

  7. Pingback: Das Management von Innovationen (Lesetipps) - linked2communication

  8. Pingback: Innovation Management: Not as Ham-Handed as it Sounds- The SiliconANGLE

  9. Pingback: Top Posts for: Innovation « I’m Not Actually a Geek

  10. Alan says:

    Thank you it is great to such great original content, I really enjoyed reading your info and will be back to view further posts.

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