Welcome back to Innovation 101. In previous posts I have explored how innovation is a process that can be managed in organizations. Today I will talk about how innovations are created through such processes and how the innovation value-add is being generated. Understanding how innovation value is added will help you manage the innovation process in your own organizations.
Let me start with asking you to step back for a moment and think about your experience in getting that great new project from an idea to development to execution … ready?
Did your vision look anything like the diagram below?
figure 1 – Innovation Value Chain
(adopted from research Dervitsiotis, 2010; Hansen and Birkinshaw, 2007)
Each individual experience and organization is different, however, in most cases innovation follows a recognizable pattern of development: We source ideas from various places – colleagues, partners, tradeshows, the Internet, etc. – both internal and external to our organization. Then, most likely we socialize with colleagues and bounce ideas back and forth, perhaps including a client or a partner in this process, until an idea is clearly defined (in innovation management science, this is known as the “idea incubation” period) and finally, the idea becomes something which really has potential. This entire process in innovation management science is known as an idea generation phase.
Usually the next step is to have a more official approach, such as brainstorming or having focus group sessions through which a pool of good ideas is reduced to the ones that seem “the best” and then are selected for development. In this process it is most likely you will involve various stakeholders in your organization, with the purpose of validating and revalidating an idea and finally getting an approval to move ahead with it. In innovation management science, this particular process of selecting an idea to develop and actually committing resources to it is known as the idea selection phase.
Thereafter the resources are committed and you perhaps first develop a pilot project or a prototype in order to validate the concept, hopefully ending in a full cycle product or further service development – in innovation management science, this is known as the idea development phase. It should be noted that both idea selection and idea development make up the process of conversion – converting an idea into a product or a service.
Finally, as our point of view is innovation in corporate environments and improvement of financial performance through innovation, your brand-new product or service has to be commercialized – for which existing sales channels are used, or new ones developed. This phase in innovation management science is known as the diffusion phase.
The above process will vary, depending on the specific organization. However, for most organizations, this is how the innovation process takes place – from an idea to development and then the actual commercialization.
Think of the different phases described above as chains – hence the term in innovation management science used to describe innovation value generation in organizations known as Innovation Value Chain. It is important to note that each phase of this innovation process adds an innovation value to the next phase.
Understanding the innovation value that is generated during the innovation process will help you improve innovation performance in your organization. By focusing on increasing individual innovation value added from each of the links in the innovation value chain, we are in fact positively affecting our organization’s innovation performance. However, it is recommended to focus first at understanding the weakest link in your innovation value chain in order to improve it. This will most likely produce a significant, positive impact on your organization’s innovation performance.
Until the next time…
No comments yet.