Business Management Blog

Innovation is one of those words that can mean different things to different people — indeed, if you ask a group of your colleagues to write a sentence or two about what they mean by the term, you should expect a lot of variety, for example:

• A new idea.
• A really great new product.
• Something different from the competition.
• Something that makes real money.
• Something that is so radically different.

Some people tend to emphasize the creativity aspect of innovation; others stress the need for commercial success; yet others highlight the importance of being radical.

Innovation as a Process

Lets first think of innovation as a process. Certainly, the heart of innovation is the creative act, that spark of inspiration (or whatever it is) that triggers that fantastic new idea. Now, if you work in a university, for example, that could well be enough -– you can think about the idea for a while, discuss it with colleagues, speak about it at conferences, write some journal articles, maybe even write a book.

But in a commercial or organizational context, having a great idea just is not enough. Something has to happen to that idea –- others have to be persuaded of its relevance; perhaps money has to be spent trying it out, maybe building some models, or testing a prototype; if the new idea is a new product, then perhaps some new manufacturing plant has to be built, and there will certainly have to be some sort of marketing campaign around the product launch. Bringing a new idea to full fruition, so that something real actually happens, requires much more work than just having the idea in the first place.

In the commercial world, innovation is a process which starts with an idea, and results in something real actually having happened, such as the launch of a new product or the implementation of a new process.

Innovation in business is a sequence of four stages:

1. Idea generation – in which the initial ideas are created.
2. Evaluation – in which a decision is taken as to which ideas to progress, and which to discard, at least for the present.
3. Development – in which an idea is made fully fit-for-purpose.
4. Implementation – in which the idea is brought to full fruition.

Domains of Application

Most people think of innovation in the context of a better mousetrap -– a new product or service that outstrips all its predecessors.

Innovation is the whole of this space: the four-stage process, plus the application domains. So, if you want to be better at innovation, and to manage innovation as an organizational competence, then all of these aspects need to be encompassed. Since the process stages underpin all the applications, let me describe each of these four stages more fully.

The application of innovation to the creation of new products and services is shown in the top right-hand segment, but, following the diagram around, innovation also applies to:

• processes – as exemplified by the best examples of business process re-engineering
• structures – in terms of new forms of organization
• relationships – for example, new forms of external relationships with customers or suppliers, or new forms of internal relationships within your own organization
• strategy – in the form of not only new innovative strategies, but also as regards the process of strategy formulation
• you! – for maybe the most fundamental form of innovation is the acceptance, within my mind – or indeed your mind – that maybe there really is a better idea out there!

Managing these is complex and difficult, but it can be done! This will give you great insights into the tools and techniques of deliberate and systematic idea generation, and into the cultural requirements for success overall, but especially in evaluation, development, and implementation. As a starting point, you might like to ask these questions of your organization.

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