Chapter contents
Organisations and innovation 118
The dilemma of innovation management 118
Innovation dilemma in low technology sectors 119
Dynamic capabilities 120
Managing uncertainty 120
Pearson’s uncertainty map 121
Applying the uncertainty map in practice 123
Managing innovation projects 124
Organisational characteristics that facilitate the innovation process 126
Growth orientation 129
Organisational heritage and innovation experience 130
Vigilance and external links 130
Commitment to technology and R&D intensity 130
Acceptance of risks 131
Cross-functional cooperation and coordination within organisational structure 131
Receptivity 131
Space for creativity 131
Strategy towards innovation 132
Diverse range of skills 132
Industrial firms are different: a classification 133
Organisational structures and innovation 135
Formalisation 136
Complexity 136
Centralisation 137
Organisational size 137
The role of the individual in the innovation process 137
IT systems and their impact on innovation 138
Management tools for innovation 141
Innovation management tools and techniques 141
Applying the tools and guidelines 144
Innovation audit 144
Case study: Gore-Tex® and W.L. Gore & Associates: an innovative company
and a contemporary culture 145
Learning objectives
When you have completed this chapter you will be able to:
● identify the factors organisations have to manage to achieve success
in innovation;
● explain the dilemma facing all organisations concerning the need for
creativity and stability;
● recognise the difficulties of managing uncertainty;
● identify the activities performed by key individuals in the management
of innovation; and
● recognise the relationship between the activities performed and the
organisational environment in promoting innovation.
But we have already seen in the previous chapter that long-term economic growth is dependent on the ability of firms to make improvements to products and manufacturing processes.
. The most obvious way forward is to separate production from research and development (R&D) but, whilst this usually is done, there are many improvements and innovations that arise out of the operations of the firm, as will be seen in the next chapter. Indeed, the operations of the firm provide enormous scope for innovation.
The literature on dynamic capabilities seems to offer the most likely solution for
firms. It has found that every firm has a zero-level or baseline set of routines, i.e.,
those that serve the purpose of producing and marketing the given products and
services currently in the portfolio (how we earn a living now).
Some firms have
dynamic capabilities (producing new products, serving new customers and markets), i.e., those routines that relate to the innovation of products and services, to the innovation of the production process, or to the search and attraction of new customers, etc. – dynamic capabilities implement the change of old routines with new ones. Chapter 7 explores this issue further.
Organisational characteristics that facilitate the innovation process 126
Innovation requires a variety of competencies at key stages in the innovation cycle. Each of
these requires its own space and time but, along with specialised skills, comes the
need for coordination and management.
Innovation Management Measurement Areas
Framework category Measurement area
Inputs People, Physical and financial resources, Tools
Knowledge management Idea generation, Knowledge repository, Information flows
Innovation strategy Strategic orientation, Strategic leadership
Organisation and culture Culture, Structure
Portfolio management Risk/return balance, Optimisation tool use
Project management Project efficiency, Tools, Communications, Collaborations
Commercialisation Market research, Market testing, Marketing and sales
Source: Adams et al. (2006).
Innovation management tools and methodologies
Innovation management typologies Methodologies and tools
Knowledge and technology management Knowledge audits, Knowledge mapping, Technology road maps, Industry foresight panels Document management, IPR management
Market intelligence Technology watch/technology search Patents analysis, Business intelligence Competitor analysis, Trend analysis. Focus groups Customer relationship management (CRM)
Cooperation and networking Groupware
Team-building
Supply chain management
Industrial clustering
Human resources management Teleworking
Corporate intranets
Online recruitment
e-Learning
Competence management
Interface management R&D – marketing interface management
Concurrent engineering
Creativity development Brainstorming
Lateral thinking
TRIZ*
Scamper method
Mind mapping
Process improvement Benchmarking
Workflow
Business process re-engineering
Just in time
Innovation project management Project management
Gannt charts
Project appraisal
Stage-gate processes
Project portfolio management
Design and product development CAD systems
Rapid prototyping
Usability approaches
Quality function deployment
Value analysis
NPD computer decision models
Business creation Business simulation
Business plan
Spin-off from research to market
.
Source: Hidalgo and Albors (2008) and Coombs et al. (1998
-----------------------------
Organisational characteristics that facilitate the innovation process
1 Growth orientation
2 Organisational heritage and innovation experience
3 Vigilance and external links
4 Commitment to technology and R&D intensity
5 Acceptance of risks
6 Cross-functional cooperation and coordination within organisational structure
7 Receptivity to External Innovations
8 Space for creativity
9 Strategy towards innovation
10 Coordination of a diverse range of skills
Organisational requirement Characterised by
1 Growth orientation A commitment to long-term growth rather than short-term profit
2 Organisational heritage and innovation experience Widespread recognition of the value of innovation
3 Vigilance and external links The ability of the organisation to be aware of its threats and opportunities
4 Commitment to technology and R&D intensity The willingness to invest in the long-term development of technology
5 Acceptance of risks The willingness to include risky opportunities in a balanced portfolio
6 Cross-functional cooperation and coordination within organisational structure Mutual respect amongst individuals and a willingness to work together across functions
7 Receptivity The ability to be aware of, to identify and to take effective advantage of, externally developed technology
8 Space for creativity An ability to manage the innovation dilemma and provide room for creativity
9 Strategy towards innovation Strategic planning and selection of products, technologies and markets
10 Coordination of a diverse range of skills Developing a marketable product requires combining a wide range of specialised knowledge
Interesting
● a shift in focus and mindset from business optimisation to business creation.
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