Over the last decade many buzzwords have been tossed
around in Management books. Servant Leadership, Customer-Driven transformation,
Change Management, Operations Management, Entrepreneurship Management, Customer
Relationship Management, Business Process management, Innovation Management, Brand
Management and many more.
I believe Innovation
Management is the most revolutionary idea in the management industry, as it
is a way encompassing different aspects of an organization. Innovation is no
longer pigeon-holed to technological advances from Research & Development
team. It can come from anywhere and every part of the organization must operate
in the new paradigm of looking for efficient ways of doing things.
In 1995, Clayton Christensen had introduced the term ‘disruptive
innovation’ to the world. “Disruption” describes a process whereby a smaller
company with fewer resources can successfully challenge established incumbent
businesses [1]. In the same HBR article,
‘What is disruptive innovation’, Christensen and Co provide the example of
Apple using an innovative business model. Even though iphone was a sustaining
innovation in the smartphone market, it created a new market for internet
access and eventually was able to challenge laptops as mainstream users’ device
of choice for going online [1].
In the face of such disruption, companies need to always
be on the lookout for changes in the market. Not only that, they need to
develop a road map before disruption takes hold [2]. The top 10
transformational companies, on an average have new growth area with nee revenue
as a % of total revenue at more than 25%. To change track from its core
operations and sustain a new profitable one, a company must use innovation
management for success.
Innovation is a powerful driver for creating value,
competitiveness and profitable growth [3].
In 2014, referring to the confusion of who is a
disruptor and who is not, Clayton Christensen pointed out, that a challenge
being faced by management is lack of common terminology. ISO/TC 279 is the
Innovation Management Standard. ISO 50500 addresses the following seven
principles of an innovative organization [3].
Realization
of Value
Future-
focused leaders
Purposeful
direction
Innovation
Culture
Exploitable
insights
Mastering
Uncertainty
Adaptability.
Transformation of the organization.
An initiative’s value can be realized through project management, program management or
portfolio management [4]. Studies have shown that leaders make decisions in
favor of short term growth to make shareholders happy. Many of the other
innovations like good strategy don’t show results because of the strategy
execution gap where the strategy is set by the upper management and the front-line
mangers are told top down as to what needs to be done without knowing the
ground realities. Change Management
is a response while being proactive is a better way to be prepared for changes
in advance. All these piece meal management efforts have a narrow scope while Innovation Management encompasses the
whole organization’s DNA as well as its outlook.
Until now the Management theories, Management by
Objectives, Zero-based budgeting, Decentralization, Total Quality Management,
Supply Chain Management, Team Downsizing were all looking at inefficiencies in
resource allocation, budget allocation, operations, each in its own little
cloud and not looking at the organization as a whole and its long-term future.
In this whole equation, you don’t hear about the customer and their needs.
In Mapping
Innovation: A Playbook for Navigating a Disruptive Age, Greg Satell talks
about Eric Haller from Experian DataLabs and his unique way of solving
customers problems and then scaling those solutions, thereby enhancing the
company’s portfolio.
With Innovation Management, companies like 3M have
used Lead User Methodology to come
up with breakthrough products. Customer-centric innovation is at the core of
innovation Management. Shapiro adds that a customer-centric strategy demands
that you think about customers’ unmet needs, and about products and services
they may not even realize that they need yet [5]. “This leads to new
products, new services, and new ways of delivering those products and
services,” he adds. Some companies have gone a step further and involved
customers in the brand management through their crowdsourcing methods. Dell’s
Ideastorm, Procter & Gamble’s (P & G) Connect + Develop, My Starbucks
Idea, Unilever Foundry are some of the examples of Corporate sponsored
platforms where ideas are submitted to the sponsor [6]. Crowdsourcing can also
be carried on through Intermediate platform providers like Spigit, Innocentive
and Ideaconection, who have vibrant communities of cross-discipline inventors.
Have you seen how we moved from concepts to people?
The most important part of the Innovation Management is the human pulse where
ideas and the inventors count.
‘Unleashing
innovation in big organizations could also be called ‘How to Not Waste Human
Potential’.” – Alexander Osterwalder.
By following the ISO/TC 279 standards of Innovation
Management, we will have organizations that are robust yet agile. Since
everyone has a say in the innovation culture, the employees will be engaged and
the vast human potential will be put to good use.
6. Open
source Leadership, Rajeev Peshawaria.
