What is innovation management and why is it needed

Why is innovation management important in business?

‘Innovation’ isn’t a benefit in and of itself. You may hear someone suggest a particular course of action because it will make the business ‘more innovative.’ But what does that mean? How does a business being more innovative benefit its employees and stakeholders?

We need to talk about innovation as something tangible and measurable. A great example of this is process innovation. Say that your employees are tired of relying on an outdated or cumbersome process. You have an idea that maybe parts of that process can be expedited, outsourced or improved by new technology. This idea can be considered an example of process innovation as it not only involves something new, but it has several benefits such as reduced cost and improved morale.

Innovation can also be a vehicle to attract top talent that is more likely to want to work for a business successfully driving forward innovation. They then become loyal employees who value the opportunity to be a part of the innovation process. Empowering employees to be innovative is a big part of why we do what we do here at Idea Drop. Our innovation management software gives them the tools to transform ideas into reality.

The above are just a handful of benefits associated with innovation. Here are some other common examples:

1. Resolving recurring problems in the business with creative solutions
2. Increasing workplace productivity with new processes and procedures
3. Showcasing business values and highlighting your qualities
4. Standing out as an innovative business ahead of the competition
5. Boosting employee morale and improving business performance

All cracking reasons to encourage innovation in your business, but all of this potential can only be reached with effective innovation management processes in place. The importance of innovation management, therefore, is that it’s the only way you are going to transform big ideas into reality and benefit from the positive outcomes.

Understanding the different types of innovation

It’s a common misconception that a business is either innovative or not innovative. A simplistic perspective that doesn’t account for the different types of innovation that may or may not be outwardly obvious as ‘innovative’. The nuances of innovation management are very much linked to the different types of innovation. Here’s a breakdown of those types and their translation into what they actually mean in a business context, to help you navigate just how far-reaching your innovation management strategy can go:

1. Incremental innovation: improvements to existing mechanisms

This is the most common type of innovation because it is less daunting and a more realistic way of bringing about innovation. Incremental innovation is to spot opportunities for improvements within existing tools, processes, technology and markets. This is something your business may be doing already without labelling it as ‘innovation’. However, small ideas often get lost or forgotten if there’s no clear process in place on how to capture, curate and manage them. Incremental innovation is subtle but effective and still requires a level of innovation management. This helps transform ideas into action whilst creating a feedback loop back to the employee who came up with the idea in the first place.

2. Disruptive innovation: a bold move that rocks the boat

The most widely known example of this type of innovation is Apple’s iPhone, which was the first to move away from buttons, keypads and scroll wheels. Also known as stealth innovation, disruptive innovation is often expensive and considered superior to anything else in existence. It’s not just new to you, it’s new full stop. Internally, however, this could be something other businesses are already using but it’s new to you. It’s disruptive to the operation of the business and therefore holds more risk if not managed effectively.

3. Architectural innovation: using proven technology in a new way

This type of innovation is about positioning. The technology itself is already used and effective in other areas of the market or your business. One of your departments, for instance, could already be using collaborative technology that you decide to implement across the business or use to build a customer-facing community. Architectural innovation is taking something that already works and using it in a different way or with a different user base and market. The risks are lower because you know the technology works, you just need to adapt and prepare it for the needs of the alternative user base.

4. Radical innovation: the mind-blowing stuff that breaks ground

Beyond just being ‘disruptive’, radical innovation is what many consider to be true innovation. It’s where new industries are born and entire movements are created. It’s where some of the greatest entrepreneurs and innovators like to play. It’s high risk but also holds high reward for anyone able to pull it off. The first airplane, the first mobile phone, the first laptop and tablet are all examples of radical innovation. What’s often missing with radical innovation is radical innovation management. Even the most creative ideas need process and structure to pull them off in reality.

Viewing innovation under these four categories highlights the many opportunities for innovation in your business, but also how important it is to have effective innovation management in place. If you’re struggling to get started or jump-start innovation in your business, you could begin with incremental innovation and later introduce more disruptive ideas that can drive the business forward.