Innovation may be developed for services, products, processes, components, materials and business business models. It is the creation of new value and new satisfaction for customers and the organization. In an effort to pursue innovation, organizations often launch a number of "best practice" initiatives which create a lot of activity and unfortunately less than expected results. Often what is missing is an integrative innovation strategy. This article aims to provide a simple framework that may be used by organizations to develop such a strategy.
An integrated approach to innovation requires four key components: First is an overall organization approach to innovation, second is the innovation market positioning, third is the project portfolio and forth is the innovation management process. Each of these components are described in more detail in the rest of this article.
The first component, innovation design approach requires executive leadership to decide how innovation strategy will be designed. This can range anywhere along a continuum from a pure top down approach to a pure bottom up approach. The second component is the innovation and market positioning component. Here the focus is on deciding the role innovation will play supporting the targeted market position of the firm. For example, the organization needs to decide if its innovation efforts will be directed towards positioning the firm as the technology leader, being the first to launch new products. Alternative it may decide that being a quick follower to the leader is more suitable.
The third component is the innovation project portfolio. This will be the total list of innovation projects that the organization has in its pipeline. This portfolio will typically include a combination of projects that will be radically new, some that will provide a step change and others that provide incremental improvements to the products and services already available. This new product / innovation portfolio will need to align with the innovation strategy approach and position described under the first two components of the innovation strategy framework.
The forth component of the innovation strategy framework is the innovation management process. These are the core processes that need to be put in place to manage innovation through the organization. It will include processes such as new idea generation, customer needs anticipation, idea screening, new product development management, commercialization management and innovation performance measurement and management.
These four components combine to provide an integrated approach to the strategic management of innovation. Innovation needs to be managed like any other core business process. Leaders need to be able to evaluate progress, performance and align efforts and guide resource deployment decisions.