What is innovation management's biggest mistake?
Taking the value of innovation management for granted is the largest mistake innovation managers make on a daily basis. It is a common thought that following innovation is essential and always the best course of action. However, if you don't establish your goals, you will not be able to track and analyse your progress. Innovation will become a disposable investment if you cannot demonstrate the results of your work.
Budget cuts will continue to befall you if you don't communicate the value that your creative initiatives offer to your company. Because if you, as a manager, cannot articulate costs and benefits, you'll face questions about whether innovation adds value to your company in the (presumably near) future. No matter what intangible advantages innovation offers, if its financial worth isn't generally recognised, the budget for the project will be put under so much pressure that corporate innovation ends up being a drain rather than a source of inspiration.?
The importance of effective innovation management
An innovation strategy focuses on the company's fundamental value and how it can expand to satisfy increased client needs or enter a completely new market. One of the most essential things a company can do to enhance customer retention is to deliver value. Here are a few reasons why having an innovation management strategy is critical.
Clarifies Goals: developing an innovation strategy aids in the formalisation of some of the most significant corporate goals. When the goals of the organisation are articulated, it helps prioritise what is most important to the business and how your team can efficiently achieve them.?
Alignment: innovation management helps achieve alignment at all levels of the firm. Whether it is individual duties, high-level strategy, or operations management, everyone will have a common understanding of the major goals and how to achieve them.
Optimises for long-term success: rather than focusing exclusively on the immediate future, an innovation plan outlines the business's long-term strategic orientation. This adds meaning to the short-term duties while also providing the organisation with a long trajectory to follow.
Encourages teamwork: when innovation is at the heart of a firm, teamwork is essential for progress. Developing an innovation strategy promotes collaboration across individuals, teams, and departments. This creates the ideal climate for ideas to flourish.
The value of innovation
Innovation professionals have a tendency to think that innovation is always positive. We may fail to perceive the price of innovation because we are too caught up with the abundance of opportunities it offers. Let's face it, it is expensive to fund innovative endeavours, and not all ventures are successful. Why? Because finding the right partner to collaborate with can be tricky if you don’t rely on the right tool.??
Investments in innovative projects ought to pay out financially. Innovation also has worth that goes beyond monetary gains, like increasing the business reputation, client happiness, staff satisfaction, and talent retention. However, none of these ancillary advantages actually cover the costs of living. An innovation portfolio must ultimately create income in order to remain viable.?
PWCs Comparison of Innovation Spending and Revenue report was based on a survey of one thousand companies and revealed that the average investment in innovation is three to four percent of total revenue.?
Therefore, what kind of innovation should be fostered, and how many?
Assessing the value of innovation
To determine the answer to this question, you must determine whether or not your firm benefits from the portfolio of creative activities. You must create measurements and processes to monitor the effects of your innovation activities because the true worth of your invention will not be apparent unless you quantify it.
When creating KPIs and monitoring impact, innovation managers can commit mistakes on both sides of the spectrum.?
Some are just concerned with money and neglect to consider the various effects the innovation process has on their organisation. You could find it difficult to convey a motivational story if all of your attention is on the numbers. The cost of involving the entire team in the project is probably greater than the income generated by the one or two new services the project resulted in. Due to restricted scalability, it is extremely difficult to provide a favourable return on investment in service businesses. If the intention was to engage and re-energise a portion of the workforce, innovation managers often make the mistake of focusing too much on the financials and underreport the contributions innovation offers.
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Others, however, overestimate indirect advantages because they find it too challenging to monitor costs and new revenue. Because finances are the top objective, no matter how many tracking points you have (number of new projects, engagement levels, staff satisfaction, social media recognition, etc.), this approach also leads to underreporting. Senior management will view such innovation activities as a disposable expense if there is no evidence that they produce income.
Let’s talk facts - How to avoid innovation management main mistake?
You need to be clear about the expectations you have for your innovation efforts if you want to avoid making this crucial innovation management mistake.
What value does the organisation desire from its innovation activities? Raise staff satisfaction? Are additional revenue sources being sought by the company? Is the business trying to break into a new market that calls for new skills?
In order to thrive and develop in the face of fiercer global competition, businesses must constantly improve their internal capabilities as well as their product line. This means that in dynamic business environments, businesses that consistently innovate gain from a sustainable competitive advantage and profitability. As a result, businesses naturally look to create or include solutions that serve as a catalyst for innovation.
Nevertheless, accelerating innovation is a difficult endeavour because it is a concept without set guidelines that varies depending on each company's capabilities and needs. Additionally, as businesses today face problems unlike any other time in history, managing innovation effectively is easier said than done. Some of the factors include heightened market instability, swiftly shifting client needs, and increasing rivalry brought on by the quick speed of digitalization and technological advancement.
Conventionally, businesses found innovation at trade exhibitions, conferences, and within their personal and professional networks. Nowadays, it is impossible to track innovation using conventional approaches due to the incredible amount of new firms and technologies launched on a daily basis. Instead, data-driven innovation scouting is a rapid, affordable, and effective way to locate the businesses and technologies that best meet your innovation objectives.
A data-driven scouting approach acts as a catalyst for innovation. The data-driven process uses artificial intelligence and big data to quickly scan through millions of scaleups and startups worldwide. This implies that you may find relevant startups, scaleups, and high-growth organisations with the ability to help you achieve your innovation goals and to discover industry trends, new technologies, and other factors.
In comparison to conventional desk research, a data-driven approach enables businesses to identify innovations considerably more efficiently.
Speed up the process of innovation scouting
The innovation scouting approach enables you to swiftly find technology trends that best correspond with your innovation goals by evaluating billions of data points from millions of innovation sources (startup websites, patent databases, social media activity, etc.). Innovation scouting is the process of using innovation intelligence to uncover market trends, technologies, and the forces that are driving them that have the potential to advance an organisation's innovation goals. What are the main benefits of this process?
How to catalyse your innovation management process
A fantastic example of an innovation catalyst is the Novable platform, which uses big data and artificial intelligence to cover over 2 million startups and scaleups worldwide. You can use a systemic data-driven method to examine detailed information about startups and scaleups that are pursuing emerging technology trends. The platform offers a range of deliverables for your technology scouting process depending on your innovation goals and needs. A few of these are:
Thank you for reading this month’s newsletter! Share your thoughts below! Have you witnessed this mistake in action? What steps can organisations take to foster a culture of innovation?