Business Finance - Management Assignment 1 White Paper

Student Resource

Chapter 3: Managing innovation as a core business process

Chapter 3: Managing innovation as a core business process

• In the following PowerPoint slides you will find the key headings from CHAPTER 3 together with the main illustrations, tables, etc.

• There are also slides summarizing the key messages in bullet-point fashion, and a wide range of activities which you can use to help students explore around these themes.

• Finally there are some reflection questions which can be used as the basis for discussion or assignments.

Learning Objectives

By the end of this chapter you will understand:

• Innovation as a process rather than a single flash of inspiration;

• The difficulties in managing what is an uncertain and risky process;

• The key themes in thinking about how to manage this process effectively.

Managing innovation as a core business process

Stages in the journey

Innovation is a journey, not an event

Contingency model – it all depends

Innovation life cycle

Key influences

Learning to manage innovation

Capture value

Sector

For profit/not for profit

Geography

Regulatory environment

Social innovation

Innovative organization

Pro-active linkages

Search

Select

Implement

Size

Innovation strategy

Learn and build capability

Changing innovation models

Concept of routines Dynamic capability

Problem of partial models

Core themes and material

from the book

Innovation as a journey

Key stages in the process

• Searching for trigger ideas.

• Selecting from the possibilities the one we are going to follow through.

• Developing the idea from initial ‘gleam in the eye’ to a fully-developed reality.

• Managing its diffusion and take up in our chosen market.

• Capturing value from the process.

Influences on the process

Innovation needs:

• Strategy;

• Innovative organization;

• Proactive linkages;

• Learning and improvement loop.

Key questions about how we manage innovation

• Do we search as well as we could?

• How well do we manage the selection and resource acquisition process?

• How well do we implement?

• Do we capture value? Improve our technical and market knowledge for next time? Generate and protect the gains so they are sustainable?

• Do we learn from experience? How do we capture this learning and feed it back into the next time?

Different versions of the core process model

• For a start-up entrepreneur the ‘search’ stage is often called ‘opportunity recognition’ – but once they have spotted something they think they can exploit the challenge is of making it happen. They have to acquire resources making various pitches to get backing and buy-in.

• Then they have to develop the venture and finally launch it into their chosen marketplace and capture the rewards and also the learning to allow them to do it again.

Different versions of the process model (continued)

• For a new product development team in a company it is about searching for ideas (maybe in the R&D lab, maybe via customer survey, maybe some combination of both). Then they have to secure internal resources – pitching for backing against other competing projects form different teams. Then they manage the development process, bringing the product through various stages of prototyping and simultaneously developing the market and launch plans. Finally launch and, hopefully, widespread adoption – and capturing the gains in commercial terms but also in terms of what has been learned for next time.

Different versions of the process model (continued)

• For a public service team in a hospital the search may be for more efficient ways of delivering the service under resource constraints. Once again an individual or team has to convince others and secure resources and the permission to explore, they have to develop it and then diffuse it as a new method to an internal market of people in the service who will adopt the new way. And once again they capture value, in terms of efficiency improvement but also in learning.

Different versions of the core model (continued)

• For the social entrepreneur it is about finding a trigger need, then developing and sharing a vision around how to meet that need better. Securing support and buy in is followed by development, implementation and hopefully widespread adoption – and the value is captured in social improvements as well as learning.

Variations on a theme

Variations on a theme (continued)

We can use a process model as a framework reminding ourselves the reality will vary, for example, by the sector, the size of our enterprise, or the stage in the industry life-cycle.

Different sectors, different approaches

Innovation in the humanitarian world

https://higuide.elrha.org/toolkits/get- started/innovation-process/

Size as an influence

Different models for ‘steady state’ and

discontinuous innovation

Changing models of innovation over time

The problem of partial models

The problem of partial models (continued)

Core abilities in innovation

Developing innovation capability

Innovation as a journey

Key questions in the selection phase

Key questions in the implementation phase

Dynamic capability

• Dynamic capability – need to update and change our routines in a changing world.

• Of the ways we do things round here – our routines – for innovation:

• Which should we do more of?

• Which should we do less of, or even stop?

• Which new things do we need to learn to do to add to our repertoire?

Summary

• Innovation doesn’t happen simply because we hope it will – it’s a complex process which carries risks and needs careful and systematic management

• It’s an extended process of picking up on ideas for change and turning them through into effective reality. At its heart it involves stages of searching, selecting, implementing and capturing value.

Summary

This core process doesn’t take place in a vacuum – we know it is strongly influenced by many factors. In particular innovation needs:

• Clear strategic leadership and direction, plus the commitment of resources to make this happen.

• An innovative organisation in which the structure and climate enables people to deploy their creativity and share their knowledge to bring about change.

• Pro-active links across boundaries inside the organisation and to the many external agencies who can play a part in the innovation process – suppliers, customers, sources of finance, skilled resources and of knowledge, etc.

Summary

• Do we have effective enabling mechanisms for the core process?

• Do we have strategic direction and commitment for innovation?

• Do we have an innovative organisation?

• Do we build rich pro-active links?

• Do we learn and develop our innovation capability?

Summary

• Learning to do this – building innovation management capability – involves finding behaviour patterns which work and then reinforcing and practicing them until they become ‘routines’ – ‘the way we do things around here’

• They become the structures and procedures through which we make innovation happen

• In a constantly changing environment it’s also important to check and adapt our ‘routines’, updating, adding and even letting some of them go. This process of regular review and reconfiguration is at the heart of innovation management as a ‘dynamic capability’.

Videos

• There are several videos which can help explore and present the key themes of the chapter:

• Six short films exploring key aspects of the innovation journey

• A longer film looking at the question of managing innovation as a process

Videos

• These interviews present people talking about the challenges of managing innovation in different contexts:

• Michael Bartl of Hyve, a German consultancy which specialises in innovation management. It explores the use of new approaches to ‘crowdsource’ ideas and identify user needs.

• Catherina van Delden, founder and CEO of Innosabi, discussing user involvement in innovation.

• David Simoes-Brown of 100% Open discussing some of the innovation management challenges involved in working with the new ‘open innovation’ environment.

Videos

• Helle-Vibeke Carstensen discussing some of the challenges of enabling innovation in the public sector.

• Divya and Gaurav Garg talking about platform innovation for community development

• Suzana Moreira of Mowoza.com taking about innovation in a development aid context

• Simon Tucker discussing social innovation

• Lynne Maher talking about innovation in a health care context

Videos

• Kyle Stewart of Torbay Hospital in the UK talks about how innovation is supported and stimulated

• Two doctors describe an innovation project they conducted as junior doctors looking to improve the service offered at Torbay Hospital.

• Kate , another junior doctor at Torbay Hospital, describes an innovation project she carried out to improve the process for dealing with anaphylatic shock.

Videos

• Joe Tidd explores the challenges in developing an innovation process

• John Bessant explores the need for dynamic capability

• A number of practising innovation managers talk about their experiences here

Blogs and podcasts

• There are several podcasts picking up key themes around managing innovation as a process and some of the key variables:

• Innovation models

• The innovation journey

• Preparing for the journey

• Making the innovation journey

• Success and failure in innovation

Blogs and podcasts

• Experience innovation

• Crisis-driven innovation

• Lynne Maher talking about innovation in the UK healthcare system