Innovation management | Formal Approach

Innovations are characterized by uncertainty, risk, and complexity, so it is important to develop a formal yet flexible structure, system, and methodology for developing and implementing new innovative products.

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Organizing innovation management

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Many organizations have a centralized innovation management team that facilitates or manages the process of innovation from idea generation to implementation. However, the actual innovation is performed by subject matter and business experts under the authority of executives or managers in the organization.

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Innovation management teams, if they exist, are responsible for coordinating various formal innovation activities and processes; for example, they might host innovation fairs or ‘hackathons’. They may facilitate workshops. They coordinate team members’ schedules and activities. In some cases, they manage innovation projects and coordinate all activities until the solutions are developed and implemented.

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Some innovations are so important to the organization that subject matter experts are moved from their regular job into a rotation where they work on the innovation full-time under the direction of the innovation management team.

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These teams are closely aligned to teams responsible for defining and maintaining strategy. They usually report to a senior executive, such as the CEO or Chief Digital Officer. They are responsible for orchestrating, developing, administering, monitoring, and measuring the processes that manage innovation, as well as the innovations themselves. Innovation management teams also provide guidance to, and remove political hurdles from, the teams building the innovations.

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However, innovation should not be limited to these teams. It should be encouraged at every level, and boundaries (such as regulatory restrictions) should be clarified so that innovators feel comfortable innovating without incurring negative responses.

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There should be clear guidelines for managers or team leaders on how to encourage and coordinate innovation that improves the effectiveness of their area of responsibility, and when to engage with a more formal innovation management function. They should also understand what areas they cannot change, and how to propose ideas for innovation in those areas.

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Activities in managing innovation

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Innovation is a collective process; creating a sense of shared purpose is essential.

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Individuals turn innovative uniqueness into real competitive advantages. In organizations where the focus is on productivity and performance, novel ideas often remain tacit: difficult to transfer to others, express, codify, and assess.

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Cultivating a climate where people are openly encouraged to communicate directly, thereby enabling their perspectives, knowledge, and ideas to flow across the organization, is essential for innovation. As knowledge and perspectives are shared, innovation becomes a potent competitive force that drives financial wealth, productivity, and growth.

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Managing innovation requires a process that shepherds ideas through different stages of validation. This process must include the capture and continual evaluation of each idea, culminating in the ‘kill or progress’ decision. Moving too quickly through the stages of validation will yield suboptimal results, as the accelerated process may not account for all factors, and those involved in the process may feel that their ideas are not being treated seriously.

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