To identify meaty problems, ask:. What tough trade-offs do we never get right? For example, does obsessive pursuit of short-term earnings undermine our willingness to invest in new ideas? Is our organization growing less agile while pursuing size and scale advantages? What is our organization bad at? Creating an inspiring work environment? What challenges will the future hold for us?
For example, what are the ramifications of escalating consumer power? Near-instant commoditization of products? Ultra low-cost rivals? Conventional wisdom often obstructs innovation. Ask your colleagues what they believe about a critical management issue.
Identify beliefs held in common. If so, consider alternative assumptions that could open the door to fresh insights. Thus they withhold their full engagement and passion—essential ingredients for continual organizational renewal. A more helpful alternative belief? Identify decidedly unconventional organizations, and look for the practices they apply that might help you solve your problem. It makes micro-loans to poor people with no collateral requirement and little paperwork.
Borrowers—which by numbered more than 4 million—use the funds to start small businesses that benefit themselves and their communities. Ask: How can we make it equally easy for our employees to get capital to fund an idea? Click here for printable worksheets to test your management innovation. Are you a management innovator? Have you discovered entirely new ways to organize, lead, coordinate, or motivate? Is your company a management pioneer? Has it invented novel approaches to management that are the envy of its competitors?
Does it matter? It sure does. Innovation in management principles and processes can create long-lasting advantage and produce dramatic shifts in competitive position. Over the past years, management innovation, more than any other kind of innovation, has allowed companies to cross new performance thresholds.
Yet strangely enough, few companies have a well-honed process for continuous management innovation. Virtually every organization on the planet has in recent years worked systematically to reinvent its business processes for the sake of speed and efficiency. How odd, then, that so few companies apply a similar degree of diligence to the kind of innovation that matters most: management innovation.
Why is management innovation so vital? What makes it different from other kinds of innovation? How can you and your company become blue-ribbon management innovators? General Electric. What makes them stand out?
Great products? Great people? Great leaders? But if you dig deeper, you will find another, more fundamental reason for their success: management innovation. As these examples show, a management breakthrough can deliver a potent advantage to the innovating company and produce a seismic shift in industry leadership. Technology and product innovation, by comparison, tend to deliver small-caliber advantages.
A management innovation creates long-lasting advantage when it meets one or more of three conditions: The innovation is based on a novel principle that challenges management orthodoxy; it is systemic, encompassing a range of processes and methods; and it is part of an ongoing program of invention, where progress compounds over time. Three brief cases illustrate the ways in which management innovation can create enduring success.
Unlike its Western rivals, Toyota has long believed that first-line employees can be more than cogs in a soulless manufacturing machine; they can be problem solvers, innovators, and change agents. While American companies relied on staff experts to come up with process improvements, Toyota gave every employee the skills, the tools, and the permission to solve problems as they arose and to head off new problems before they occurred.
The result: Year after year, Toyota has been able to get more out of its people than its competitors have been able to get out of theirs.
As this example illustrates, management orthodoxies are often so deeply ingrained in executive thinking that they are nearly invisible and are so devoutly held that they are practically unassailable. The more unconventional the principle underlying a management innovation, the longer it will take competitors to respond. In some cases, the head-scratching can go on for decades. While other grocery chains have been slashing costs to fend off Wal-Mart, Whole Foods has been rapidly evolving an extraordinary retail model—one that already delivers the highest profits per square foot in the industry.
Managers consult teams on all store-level decisions and grant them a degree of autonomy that is nearly unprecedented in retailing. Each team decides what to stock and can veto new hires. What differentiates Whole Foods is not a single management process but a distinctive management system. Confronted by management innovation this comprehensive, rivals can do little more than shake their heads in wonder.
Sometimes a company can create a sizable management advantage simply by being persistent. Not every management innovation creates competitive advantage, however. Innovation in whatever form follows a power law: For every truly radical idea that delivers a big dollop of competitive advantage, there will be dozens of other ideas that prove to be less valuable.
Innovation is always a numbers game; the more of it you do, the better your chances of reaping a fat payoff. A management innovation can be defined as a marked departure from traditional management principles, processes, and practices or a departure from customary organizational forms that significantly alters the way the work of management is performed.
Put simply, management innovation changes how managers do what they do. And what do managers do? Typically, managerial work includes. In a big organization, the only way to change how managers work is to reinvent the processes that govern that work.
Management processes such as strategic planning, capital budgeting, project management, hiring and promotion, employee assessment, executive development, internal communications, and knowledge management are the gears that turn management principles into everyday practices. They establish the recipes and rituals that govern the work of managers. In most companies, management innovation is ad hoc and incremental.
By the end, you'll have the knowledge you need to not only map out your vision for strategic innovation but also to execute on that vision. Innovation management, or an innovation management system, is the process of managing new ideas, from ideation to taking action and making them become a reality.
This approach has four distinct steps:. Innovation management informs—and is informed by—high-level business targets that generate significant value for your organization. Certain actions and practices will result from your innovation, just as your innovation will follow as a response to your business vision and problems that arise.
In order to implement effective innovation management processes, you need excellent communication between employees at all levels and a collaborative environment to uncover additional innovative ideas.
If brands like these can die from a lack of innovation, then any company can. But innovation alone is not sufficient—it requires a collaborative culture that encourages employees to put forward great ideas and supports those with an entrepreneurial spirit. Otherwise, these employees have little incentive to speak out and offer their insights whether they're in the trenches or a higher-level management position.
By managing and encouraging innovation, you can discover new products, reduce costs, and enhance your development process significantly. Organizations that don't embrace innovation management also risk bringing outdated solutions to their market.
This limits your ability to stay ahead of the competition. Blockbuster failed to promote innovation, instead of relying on their outdated model of in-store rentals and purchases for movies and video games. Netflix was able to disrupt Blockbuster by first offering DVDs shipped directly to your door. Soon after, Netflix pivoted once again by providing digital streaming for a large catalog of entertainment options.
By ignoring the industry's inevitable evolution, Blockbuster dug its own grave despite having all the resources it needed to retain its dominant market position. There are four key pillars to innovation management: Competency, Structure, Culture, and Strategy. As any new idea can be viewed as innovation, it helps to have these pillars in mind to stay organized. Your core competencies are the things your company does best internally, as well as better than the competition.
However, doing something well does not mean that it is important because your competencies may not always align with your market's wants and needs. In terms of innovation management, it's helpful to distinguish your employees' competencies from those of your organization at large. Your employees may have one-off competencies that apply in narrow contexts. In contrast, your organizational core competency revolves around its ability to direct and organize these capabilities around a market solution.
It helps to have someone within your organization that already has experience with innovation management. Whereas competency has to do mainly with capability, structure refers to the systems and business processes present within the organization.
Innovation control is essential, and the structure is what makes it possible. The right structure is greater than the sum of its parts. It can empower your organization to operate more efficiently and produce more powerful ideas.
For instance, if management treats employee ideas as if the employees were proposing a significant, wholesale change all at once, the managers may be skeptical and dismissive. Such an attitude would mean many ideas may never be heard, or they will be rejected without a fair hearing. The fewer barriers between an innovative idea and your core customers, the better.
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This is where Idea Drop comes in. Our innovation management platform empowers companies to bring their most impactful ideas to fruition. Here are just a few examples of how businesses can succeed with innovation management:. Covea are a nationwide insurance provider, serving millions of policyholders throughout the year. They faced numerous obstacles to their innovation goals. Firstly, their innovation management strategy was confined to a single department, with no company-wide incentives to submit new ideas.
Even if employees were encouraged to come up with new ideas, they would be hindered by outdated technology as well as a lack of communication across departments.
By implementing Idea Drop, Covea were able to gather new ideas from across their business using cloud-based technology. One of these ideas was to introduce web chat functionality on their website. BMS is a prestigious, award-winning insurance company, with a firm goal to remain at the forefront of their industry. BMS faced a number of challenges unique to the brokerage industry, from disintermediation to new cutting-edge FinTech products.
They decided that innovation management would help them stay relevant and maintain their place in the market, whilst also continuing to attract new talent for its workforce. However, they soon realised that they needed an innovation management solution that could be scaled across their entire organisation. After implementing Idea Drop, BMS made a staggering leap in developing a company-wide innovation culture, with 6.
At Idea Drop, we help businesses realise the full benefits of innovation management. Our clients reap the rewards of an end-to-end innovation management process, which allows them to determine which ideas are most likely to succeed. Finally, our platform helps businesses create a firm action plan — turning their ideas into long-lasting success.
Want to transform your organisation with innovation management? Contact the Idea Drop team today to get started. Request a demo today and our team of enterprise innovation experts will be in touch straight away to set up a one-to-one discovery session and demo. Questions, feedback or advice? Send us a message and our team will get back to you as soon as they can, during our office hours. What is innovation management and why is it needed. Charlie de Rusett What is Innovation Management?
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