INNOVATION MANAGEMENT

By Massawe Arkadi

Innovation management includes a set of tools that allow managers and engineers to cooperate with a common understanding of processes and goals. Innovation management allows the organization to respond to external or internal opportunities, and use its creativity to introduce new ideas, processes or products.^[1] It is not relegated to R&D; it involves workers at every level in contributing creatively to a company's product development, manufacturing and marketing.

Innovation processes can either be pushed or pulled through development. A pushed process is based on existing or newly invented technology, that the organization has access to, and tries to find profitable applications for.

A pulled process is based on finding areas where customers’ needs are not met, and then find solutions to those needs.^[4] To succeed with either method, an understanding of both the market and the technical problems are needed. By creating multi-functional development teams, containing both engineers and marketers, both dimensions can be solved.

The product lifecycle of products is getting shorter because of increased competition. This forces companies to reduce the time to market. Innovation managers must therefore decrease development time, without sacrificing quality or meeting the needs of the market.^[4]

In a survey of literature on innovation, Edison et al.^[6] found over 40 definitions. They also performed an industrial survey to capture how innovation is defined in the software industry. After analysis of the existing definitions whether these definitions comprehensively cover all the dimensions of innovation, they found the following definition to be the most complete: "Innovation is: production or adoption, assimilation, and exploitation of a value-added novelty in economic and social spheres; renewal and enlargement of products, services, and markets; development of new methods of production; and establishment of new management systems. It is both a process and an outcome.". This definition was given by

Innovation management is based on some of the ideas put forth by the Austrian economist Joseph Schumpeter, working during the 1930s, who identified innovation as a significant factor in economic growth.^[8] His book “Capitalism, Socialism and Democracy” first fully developed the concept of creative destruction.

Innovation management helps an organization grasp an opportunity and use it to create and introduce new ideas, processes, or products industriously.^[1] Creativity is the basis of innovation management; the end goal is a change in services or business process. Innovative ideas are the result of two consecutive steps, imitation and invention.^[9]

Innovation processes can either be pushed or pulled through development. A pushed process is based on existing or newly invented technology that the organization has access to. The goal is to find profitable applications for the already-existing technology. A pulled process, by contrast, is based on finding areas where customers' needs are not met and finding solutions to those needs.^[4] To succeed with either method, an understanding of both the market and the technical problems are needed. By creating multi-functional development teams, containing both engineers and marketers, both dimensions can be solved.^[10]

Innovation, although not sufficient, is a necessary prerequisite for the continued survival and development of enterprises. The most direct way of business innovation is technological innovation and institutional innovation. Management innovation, however, plays a significant role in promoting technological and institutional innovation.

The goal of innovation management within a company is to cultivate a suitable environment to encourage innovation.^[11] The suitable environment would help the firms get more cooperation projects, even ‘the take-off platform for business ventures’.^[11]:57 Senior management's support is crucial to successful innovation; clear direction, endorsement, and support are essential to innovation pursuits.^[12]

Innovation measurement

A key fundamental requirement for being able to manage innovation is to be able to measure and assess the various aspects of the process of innovation and its outcome. Henry et al.^[6] in their review of literature on innovation management found 232 metrics. They categorized these measures along five dimensions i.e. inputs to the innovation process, output from the innovation process, impact of the innovation output, measures to assess the activities in an innovation process and availability of factors that facilitate such a process.