Innovation management
Innovation management is the practice of systematically organizing an organization's efforts to create new value. This encompasses processes for generating ideas, selecting promising opportunities, developing innovations, and bringing them to market. Rather than leaving innovation to chance, innovation management creates repeatable approaches for turning possibilities into impact.
Why innovation management matters
Innovation doesn't happen automatically. Without management:
Innovation management provides the structure that enables organizations to innovate deliberately and repeatedly.
The innovation management process
While specific approaches vary, most include:
Ideation - Generating ideas from internal and external sources. This might involve structured brainstorming, customer research, technology scanning, or open innovation programs.
Screening - Evaluating ideas against criteria like strategic fit, feasibility, and potential value. This filters the many ideas down to those worth developing.
Development - Transforming promising ideas into concrete innovations. This includes prototyping, testing, and iterating based on feedback.
Implementation - Launching innovations into the market or organization. This includes commercialization, change management, and scaling.
Learning - Capturing insights from both successes and failures to improve future innovation efforts.
Innovation portfolio management
Organizations typically manage multiple innovation efforts simultaneously. Portfolio management balances:
Risk levels - Some low-risk incremental improvements, some higher-risk breakthrough attempts.
Time horizons - Near-term improvements to current products, medium-term expansion into adjacent areas, long-term exploration of new possibilities.
Resource allocation - Ensuring important initiatives have adequate investment without spreading too thin.
Common frameworks include the three horizons model (core, adjacent, transformational) or 70/20/10 allocation percentages.
Innovation management roles
Different roles contribute to innovation:
Innovation leaders set direction, allocate resources, and champion innovation efforts organizationally.
Project teams develop and execute specific innovation initiatives.
Scouts monitor external trends, technologies, and competitive moves.
Coaches help teams apply innovation methods and overcome obstacles.
Sponsors provide organizational support and remove barriers for promising projects.
Some organizations create dedicated innovation functions; others distribute these responsibilities.
Innovation challenges
Culture resistance. Existing operations may resist innovation that disrupts established patterns. Cultural change often matters more than process improvement.
Resource competition. Innovation competes with urgent operational demands for people, money, and attention.
Measurement difficulty. Innovation progress is harder to measure than operational performance, making it harder to justify and manage.
Time horizons. Innovation payoffs are often delayed, creating tension with short-term pressure.
Not invented here. Organizations sometimes resist external ideas, limiting innovation sources.
Process rigidity. Attempts to manage innovation can create bureaucracy that stifles the creativity it's meant to enable.
Innovation management approaches
Stage-gate - Ideas pass through defined phases with evaluation checkpoints between stages. Provides discipline but can slow progress.
Lean startup - Build-measure-learn cycles emphasizing rapid experimentation. Works well for high-uncertainty innovations.
Design thinking - Human-centered approach emphasizing empathy, ideation, and prototyping.
Open innovation - Engaging external parties (customers, partners, startups) in innovation processes.
Corporate venture capital - Investing in external startups to access innovation.
Most organizations combine elements from multiple approaches.
Innovation metrics
Measuring innovation management effectiveness:
Input metrics - R&D spending, number of ideas generated, resources allocated to innovation.
Process metrics - Time from idea to market, percentage of ideas reaching implementation, experiment velocity.
Output metrics - New products launched, revenue from innovations, patents filed.
Impact metrics - Revenue growth attributable to innovation, market share changes, customer satisfaction with new offerings.
No single metric captures innovation health; dashboards combining multiple indicators provide better visibility.
Tools like Klero support innovation management by connecting customer feedback to idea generation. When innovation efforts are grounded in actual customer needs rather than internal assumptions, the innovations produced are more likely to create value.
