How to manage innovation?
You may ask yourself where did I find the title like this, and how could you manage innovation. Still, we are aware that the idea of innovation is becoming very important in modern society. In most of the corporate mission and vision statements of today, the use of word innovation has become unavoidable. Most of the leading world business theorists, (and practitioners), are telling us that the idea of innovation is becoming equally important as are marketing, positioning and brending. Fifty years ago the companies who wanted to become successful on the marketplace had to learn about marketing. In the seventies the hit was total business orientation towards the customer, in the eighties the cure was positioning, and in the nineties brending. For everybody, it has became obvious, that to survive on the global marketplace, you needed all of the above. Then, how could you differentiate yourself from the others, how could you become, (and stay), the number one? How could you make your organization competitive on the marketplace that has became super-competitive? Today, the buzz-word is innovation.
The first thing that comes to our mind when we think of innovation is that it is about something new. In our language the word innovation is synonym for novelty. What is the definition of innovation? At Wikipedia (www.wikipedia.org): Innovation is the introduction of new ideas, goods, services, and practices which are intended to be useful. Business definition is much sharper, innovation means introduction of new ideas where as the result you have increase in value (profit, quality, interpersonal-relations …). The shortest definition is: Innovation is introduction of novelties that pay off.
How do you get to novelties, to new ideas? First that comes to our mind is that new ideas couldn’t be purposefully caused, that innovation is the result of accident, like when Newton had the apple fallen on his had. Lets ask ourselves if Sir. Isaac Newton would had come to his famous discovery, of the law of gravitation, if the apple in question hadn’t fallen on his had? My deep belief is that he would have come to his discovery anyway (if not with 100%, than with very high probability). If there was no apple falling, he could have stayed under the tree all day, but the event like this could have happened later and facilitated his innovation anyway. If not apple, it could have been children throwing snow-balls, or a pear or peach falling. All the same, it’s sure that he had this problem of gravitation in his mind all the time, looking for answers. Finding the solution was only the question of time. So, his innovation was no accident.
We can take a step further in our thinking and ask ourselves is it possible to manage the innovating process, could it be stimulated, analyzed, applied or used? Could we look at all the aspects which influenced Sir. Isaac Newton to come to his innovation. First, it must have been the environment he grew up, his parents, friends, school, church, and more. Then, there was the state that established schools and school system where he was educated. Then, his fellow students and professors at the university, then the British Royal Academy of Sciences, and so on. All in all, you would agree that there was a need for very specific environmental circumstances for his ingenuity to flourish, and to be made useful.
Now imagine that Sir. Isaac Newton grew up in a very different environment. Lets say he got educated, and became university professor, not in England, but in Spain during the height of inquisition. Obviously, his discovery would have gotten him tortured and burned at the stake. Imagine now if Sir. Isaac Newton was employed in one of our state owned public enterprises. Do you believe this kind of environment would have been stimulating for his innovations? Would it have ever produced useful results?
How to become innovative organization?
Lets get back to our story on innovation management. You would certainly agree that Newton’s innovating was somehow managed. Maybe not with a coordinated purpose behind it, but very many people influenced him to get his discoveries. A lot of them supported him, or at least did not disturbed him (he did not end up on the stake). His environment must’ve been stimulating to facilitate his innovations. Imagine if somebody at that time had analyzed and researched to the smallest detail what are the environmental causes that make people innovate, and how to make there ideas useful and profitable. Imagine if that somebody established a business organization to utilize these “new found” laws of managing innovation.
Where would we get if inventors like Nikola Tesla or Tomas Edison worked in that kind of organization whose main goal would’ve been to fully stimulate their creativity, and be ready and able to get maximum profit from their innovations, for them and for the whole mankind. Today, that business organization would have been worth like ten Microsoft’s.
And lets ask ourselves why is Microsoft so big? Is their success result of first-class production process, effective business organization, successful branding, quality of human resources and how they are utilized? Probably all of the above and a lot more. Today if you asked Bill Gates what is the most important quality of his company, he would probably answer – that it is innovative. It is innovative because apart from the above mentioned qualities, it constantly works on their improvement, and finding new ways to become better and more successful. He would have to say that because most of the value of his company is contained in the innovation capabilities of its employees. You know the famous story that most of the stock market value of Microsoft is made up of human potential of its employees, that 90% of the company value walks in their offices in the morning and leaves in the afternoon. This apparent inexistent value is directly related to the ability of this company (its employees), to constantly innovate.
Innovation as part of the corporate culture
In the west, innovation management is becoming one of the most important areas of quality management in general, and much more so. We all know that marketing, positioning and brending are not only methods of sales and profit improvement, but special state of mind of all the employees. So is innovation. Not only the buzz word in corporate mission and vision statements, but required state of mind of each individual in the organization. What does it mean? Surely not that every employee must be innovator on the level of Leonardo DaVinci or Nikola Tesla. What is needed is that every employee must in every moment be fully aware how much is innovating important for the success of his/her organization, and to help innovate at his/her best. Basically, innovation is not only the road to better businesses, but to a better social relations, to wealthier businesses and wealthier society. If we remember that innovation is introduction of novelties that pay-off, applied to Serbia, it means the better life of every individual.
When we talk about innovation management, usually we see business organizations. In reality the right innovation management is necessary for every organization that desires to be the best. That applies to government institutions, non-profit organizations, even for police. There is a famous case study of New York Police Department. In only two years, (1994-1996), the police commissioner William Bratton had succeeded, with the help of top innovation management consultants, applying all encompassing novelties-changes, to greatly improve the police department and significantly lower the crime rate in the city. Application of new scientific methods in the field of innovation management, enabled the implementation of these novelties-changes, at the smallest possible costs to taxpayers, and with the maximum improvement effect. The result was much better and more peaceful life for the citizens of New York City.
I didn’t get the idea for this text by accident. By extraordinary set of circumstances currently I am a participant of the training seminar “Innovation consultants development program” organized by European Agency for Reconstruction. The training is part of the “Enterprise and Entrepreneurship Development Support Program” www.edep-serbia.net. The training is held by Dr. Dave Francis and Shaun Gannon from the “Center for research in the field of innovation management” at Brighton university, UK. Lets hope that this seminar, and other activities of this program, will help the people in our country realize importance of applying advanced achievements in the field of innovation management.
Miodrag Kostic, CMC
Director of VEZA d.o.o.
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