Innovation is key to growth – but how do you manage it efficiently and how do you go about deciding what new product or process to invest in? David Probert, head of the Centre for Technology Management at the Institute for Manufacturing, explains how companies can develop their capabilities across the three core elements of innovation and technology management: strategy, system and the organisation’s culture.
In today’s uncertain and challenging economic environment, it has never been so true that innovation is key to growth. Even large, solid companies which managed to become sector leaders in the past are not safe anymore, due to the ever-changing technology landscape as well as disruptive innovations coming onto the market, one after the other.
In order to remain competitive, firms of all types and sizes need an effective innovation and technology management plan which addresses three interrelated core elements: strategy, system and people.
It’s important to stress that these elements do not work separately: a strategy cannot be put into action if there isn’t an efficient system to support it, and even with the best strategy and system being adopted, innovation cannot happen if the company’s culture does not allow it.
The three core elements of innovation and technology management
The starting point in an organisation’s journey towards embracing innovation is defining an effective innovation and technology strategy. This will need to ensure that the company, after agreeing on a “vision” of what it is trying to achieve, focuses its R&D resources on the right markets and products – and their underpinning technologies – which support the firm’s business objectives.
Strategy development is a complex task that has to deal with many future uncertainties. However, there are tools and techniques which can help: for instance, technology intelligence gathering “scans” the environment and identifies technological trends and changes, while road-mapping techniques are able to align technology management activities with the business strategy.
Communicating the newly defined strategy to managers and stakeholder is an essential part of the process, and not doing it effectively may result in failure to implement it correctly. Well-designed visual outputs are an excellent aid in delivering this type of complex and interconnected information.
Once the strategy is in place, the organisation needs to build a system that allows putting it into practice. There are five key processes which are central to a robust technology and innovation management system which is also able to respond to the changing environment and priorities: Technology Identification, Selection, Acquisition, Exploitation and Protection (ISAEP).
The first step is to identify technologies (both internal and external) which may affect a firm’s product development and production processes, and evaluate which represent threats and which, opportunities. This will help decision-makers select which ones to focus on, and then decide how to acquire them – they may be developed in-house, bought from an external source or co-developed through an Open Innovation strategy.
Technologies then need to be exploited in an effective way, keeping in mind they could open up new opportunities, which in turn may call for changes in the business model, or even a revision of the business strategy. A key step is to decide how to protect the IP; sole ownership, shared with partners, Open IP, secrecy – there are many options.
The final element to ensure the strategy and systems lead to results is the organisation’s culture, which include the people who are part of it. The general culture, or “how we do things around here”, may create a barrier to success by not allowing innovation to happen.
For instance, there may be a hierarchical system where ideas only come from the top, while lower management and more hands-on staff who may have some fresh ideas are not involved in the innovation process. At the same time, the company needs to look at its HR and ensure that there is a combination of clear and effective leadership, and individuals with the right expertise, attitude and motivation.
To improve the people and culture element of a business, there is training available, in particular bespoke leadership training that focuses on the particular organisation’s needs and objectives, as well as workshops to stay abreast of the latest technologies and management techniques. A healthy culture for innovation does not mean simply empowering everyone to be creative – at some point in the process discipline and working to plan are the key requirements.
No one element is more important than another – effective integration of all three is the key to success. The strategy needs to clearly inform the system with what actions need to be performed and how, and both need to take into account the corporate culture and ways to create an enabling environment.
This last element can make the difference between a successful company and one which fails, as selecting and adopting the right technologies will only translate into success if there’s a culture which enables and embraces innovation.
Responding to change
With all the elements in working order, to remain successful, companies also need to have the ability to respond quickly to changes in the external environment, which in some cases may involve a major restructure in the way they do business.
For example, many manufacturers are moving to – or partly introducing – a service-based model to generate new and longer-term revenue streams. While some of their products may still be sold on a one-off basis, others may be leased through a contract which includes maintenance, with a business model focusing more on the “result” than the object.
Another way of keeping up to speed with the ever changing technology landscape is to form effective partnerships with external sources of expertise, or joining forces to share ideas and information.
If managed correctly, Open Innovation can be a great way of expanding a firm’s horizons, accessing external expertise, contributing to a wider research regarding innovation and sharing both risk and rewards with other players in the same field. But remember – this change alone presents many organisations with a serious cultural challenge.
Finally, there is no one way to win in the race towards innovation – every company is different and needs a different strategy to remain competitive, so it’s important to remain open-minded, stay informed of the latest changes and trends in the global technology landscape, and if needed, get help from experts offering a tailor-made approach and not a one-size-fits-all solution.