Innovation Management and Environment
Innovation Process and Techniques
In the paper "The Innovation Process in the Video Game Industry", Quentin Cucuel (2012) presented a basic cycle to the understanding of the macro- environment behind innovation. In summary, the process of innovation can be summarized as: "innovation breeds innovation (p. 11)". This explains why companies have to reinvent itself, recreate new products, and unravel new features that keep product updated to increase its marketability. There are several factors behind the innovation cycle, these include: economic and market behavior, competition, investments, and the consumer. When the economic behavior of a region is working well, it will attract more investments and competition, thereby raising the bar for product innovation. As consumers get wide variety of options, they would end up choosing the newest one that could provide the most features and benefits they wanted to have. This is a simple illustration why innovation is an inevitable path that companies should tread on.
In the process of innovation, there are three intangible inputs that play major roles: human capital and know-how, cultural assets, environment and institutions. Innovation involves people who do the thinking. The talent, skill, and expertise of people within the organization are vital to the creation, redesign, redevelop, or simply innovation of products. In the same manner, innovation process is an atmosphere in itself. Companies that allow the creativity of their employees get the best results of innovation. While those companies that do not allow employees to explore are left in the traditional paths and past glories of their products. The relationship between the management and the employees is an important link that bridges the value of innovation within the organization (Sussman, 2006).
Cucuel (2012) asserts that although there are tangible assets are important, intangible assets are the most vital elements of innovation. By increasing the value of human capital, innovation process starts to roll. However, it should not undermine also the value of investments. With proper investments, people within the company can look for opportunities of growth. By bringing in new technologies that can be used to explore the possibilities and options of products, employees will be able to go beyond what they currently know and what they can do.
Yet, we also need to note that the macro-environment of innovation is a big factor to innovation. For instance, as Apple moves toward touch-screen multi-gestures phone feature, Samsung is also creating its own version of features. Even if these two phone giants are suing each other for copyright infringement, facts reveal that the innovation of another becomes the foundation, either directly or indirectly, to the innovation of the other. This is a truism of Cucuel's statement that “innovation breeds innovation.” In fact, the value of innovation is attached to the value of the company. Apple can raise the price of its phones as it adds new features that will appeal to the demands and needs of users. The same is true with Samsung, the company can use its features to add market value to its products.
In the understanding of innovation, Cucuel (2012) noted the concept of "technology pushes-market pulls". Technology-push is characterized by employees who find a technical possibility and they try to capitalize on this possibility (Morris, et.al., 2010). They work on the elimination of the obstacle and problem of the product. As members of the organization tries to transform the product into a flawless one, they are indirectly on the way to innovating the product. On the other side of this approach, market-pull is the engagement of consumers with the product. When a product after the transformed of the organization is presented to the public, their response becomes the ground for the market-pull aspect. This means that consumers have directly influence on the value of innovation on a certain product or to the entire organization.
The concept of technology-push—market-pull outlines the true meaning of the innovation process. As much as a company wants to create new features for a product, they are constrained to follow what the consumers demand if the organization wants to earn. Consumers become the final direction maker of the innovation. Either the consumer market appreciates or rejects the innovation – and this becomes the fuel for the new actions that should be taken by the organization. In this concept, the one dictating innovation is the consumer market, rather than the organization.
Another important concept of innovation is collaboration versus competition. This technique of innovation becomes a focal point of today's global environment. There are companies that are trying to collaborate their capital and human resources, technologies and assets to come up with innovative products and results. On the other hand, the value of competition is an old issue of innovation. As I have mentioned earlier, as investments flow, imitation happens and to avoid infringements, companies would innovate on what others have started. As a result, there is no end to innovation or “innovation breeds innovation” as companies try to outwit or outwin each other for the quest of gaining consumers.
This is in contrast with the technology-push – market-pull concept. Instead of allowing consumers to become the manager of the direction of innovation, companies allow the innovation of another to become the manager of the transformation they will be doing. In this system, the market becomes the receiver of their innovation competition. This also results to the enrichment of the market and a wider option for consumers. However, it is important to note that the concept of collaboration eliminates this competition, but still reshapes the innovation. Collaboration and competition both yield innovations, but the value of the organization's profit becomes the final test to what direction is taken between the two.
The concept of innovation is the way companies or individuals use information from each other to work on new things. Rather than making from a scratch, innovation uses its each other strengths and weaknesses to unravel new features and core competencies with intensive impact on the value of the organization.
Innovation Management Strategy
If we look closely at the strategy used in innovation management, we can see a simple principle: bank on the value of another company to build yours. This approach to innovation tries to capitalize on the value of another and the mistakes they commit, then work on that value to build another. The good thing about this concept it is allows the company to use the competency of another. It tries to make the most out of the information given by the other company.
Revenue- and market-wise, this concept allows the company to target those who are buying from another company. And because of the common concept in business that people will always want something better and newer, the strategy is effective. The innovation targets an already established set of people and then get them to want the innovative feature added on the product. As a result, the innovation becomes the competitor of its predecessor idea, but not on a new product system.
Cucuel (2012) noted how Angry Birds used the value of smartphone touchscreen feature to build its market. And this is still banking on the value of another company, but this does not present the innovation as a direct threat of the predecessor idea. Rather, it becomes an additional value of the predecessor idea. This is what collaborative innovation is all about. This is a beneficial strategy that two companies can use to increase their value in the market. Smartphone companies can use Angry Birds to keep their value for those who want to play the game, while Angry Birds can use the enhanced and advanced technologies used in smartphones to make Angry Birds more engaging and appealing to users.
However, there is a problem with the principle of banking on the value of another company to build another. This presents the company to the threat of competition, to the threat of loyalty, and to the threat of imitation. Of course, as noted innovation happens when someone or a company tries to imitate another. This is what happens to the feud between smartphone companies. They are banking on the value of each other and it caused chaos between them. As the result, they end up paying millions to each other.
Prideaux, et.al. (2006) noted that the innovation management of the organization should look forward to the creation of innovations with consideration to the needs and demands of consumers. Innovation, in this strategy statement, becomes the foresight of the company to see what customers need in the future. Instead of just following a line or a series of current innovations, innovation becomes the prime mover for new ideas. Organizations would innovate concepts and ideas, incorporate them to produce new results that are different from what is currently in the market, and with the assurance that these new products or innovations can really meet the needs of consumers, rather than being tagged as just an imitation of another product or idea which is common to the first concept being cited for evaluation.
To meet the requirements of the innovation management that can help the organization to grow in an exponential manner, Eversheim (2009) suggests the need of using the roadmap strategy. These strategy of managing innovation uses clear parameters that should be considered. First, there should be a clear maurity of the characteristics and features of products. This means that innovation should not be as drastic as it can be just to run after the competitor. Rather, innovation should be reasonable according to the maturity of features. Second, it is important to see the series of demands and needs of consumers. There are priority demands of consumers that should be pushed with speed.
A good innovation management has a set of activities that should be done within the planning phase to the implementation period. And fourth, it is important it is necessary for the company to have a clear R & D. As noted above, when the innovation management is just after the competitor, innovations become drastic measures. But with the R & D, the organization has a clear sense of what innovations are be added or to be explored. This is most organizations would spend millions in R & D because it secures them a better market standing when new features or products are launched.
However, innovation management is entangled on the concept of knowledge (Annerstedt, 2006). Due to the change of attitude of organization, management concepts have rested on innovation as the main aggregate of economic and market value. But deep within the concept of knowledge and innovation is the need of getting the right people to do the job. As I have mentioned in the first section, intangible assets are essential to the success of innovation, and innovation comes from the investment of research and development as organization invest on the creativity of people. When the right human resources management is implemented, the organization benefits from it for the effectiveness of innovation management.
The problem of innovation management is how to control the knowledge of people and keep them controlled and directed. A strategy in innovation management must know how to keep the relationship between workers and the organization. Otherwise, there will be problems to ownership of innovation and the exposure of the said innovation to other companies. This is perhaps the most important part of the changes that should be done to the innovation management. It is essential for organizations to develop clear-cut statements on how to control the knowledge of the people within the organization for its benefit.
In essence, a perfect innovation management always looks for the right areas that should be explored and should have the right people to do the job with the technological investments. By controlling both the intangible and tangible assets, the organization can always move toward the accomplishment of the organization's goals of keep up with revenue generation at the right, either to compete with another company or to collaborate with other. An organization that knows well how to manage innovation can always get the most out of every circumstances and situations.
Innovative Environment Establishment
For organizations to create an innovation environment is to create an organization that is willing to change (Tidd & Bessant, 2011). It is impossible for an organization to see the creativity among its members or employees when the organization is not willing to change. Innovation does not just command changes to the value of the organization's results and products. Innovation also demands an organization to change its attitude and character to reflect the innovation. For instance, Apple has been producing personal computers, but after it sees an opportunity in the mobile phone industry, it introduces innovation ideas and features to the product. If Apple did not adopt the change of the company's core products, it could have rejected the idea of iPhone. Simply, for an innovative environment to be realized, the organization must open itself to changes that will be brought by the innovative environment.
First, it is necessary to prepare the culture of the organization. According to Gessinger (2009, p. Vii), "recognizing and supporting the ideas of a person and ensuring that the straightjacket of company bureaucracy does not stifle creative instincts is important in establishing an appropriate innovative environment." This means that the organization innovative environment can also be realized and established when the culture of the organization works with the process. Too much bureaucracy is a major hindrance to the innovative environment.
Second, it is important for the organization to allow people to work and develop into better thinkers. The problem with a restrictive environment is it kills the mind of the person. Even if the organization has the best and most intelligent people, it will fail when these people are not allowed to think. This is what happens to Apple as opposite to Google. Apple has maintained its relax workplace to allow people to work together in a start-up. On the other hand, Google has implemented a structure of bureaucracy. Yet, we notice that both Apple and Google succeeded. The question is how can an organization formulate an innovative environment within its current structure. Both Apple and Google, in their distinct structures, work for the best of encouraging their employees to imagine things, conceptualize ideas.
Third, it is important for the organization to establish an innovative network or a formal R & D. R & D always goes together with innovation (Mairesse & Mohnen, 2004). When an organization establishes an R & D, it also encourages the rest of the organization's employees or members to think. An R & D unit is a statement to the commitment of the organization in recognizing the idea of its members. It sets forth the tone of the organization; and it is the starting point of the organizational culture. In fact, for fashion organizations or companies, a design team (is the R & D) is always the target of an employee. One would want to be part of the design team because they create the greatest impact. As a result, other employees of the organization work hard to conceptualize ideas and make them into designs.
Lastly, it is necessary for the organization to use the innovation. The problem with an establishment of R & D just for the sake of posture and image. It is time for organization to use the R & D as they are purposed. People wanted to be given a chance to have their ideas known, but bureaucracy may kill the idea – and this poses the greatest problem of discouragement among members of the organization. It is the best time for the management to adopt to the change of the new generation demands if it wants to create an innovative environment.
Strategic Implications
For organization in Oman, it is time to become more pro-active with regards to change and innovation. This will start with the investment on technological advancements that can bring value to an innovative environment. This will start with the adoption of more modern principles and approaches to management. Simply, innovation starts with the complete overhaul of the company – from its mission statement to its goals. Being adamant to change and innovation does not bring expansion, but encourages stagnation and growth death.
Recent innovations have been drafted by the government, such as the Linking Oman Program (Fulford, 2011). The government is on its way in supporting private and public sectors to innovate and be at par with global counterparts. The government brings in new advancements – and organizations in Oman should start using these technologies for their benefits. With the investments of the government on catalysts of innovations, organization should find ways on how to use them well for their benefit. As I have noted above, it is necessary for the organization to have the right technological advancements that will help it to innovate products and itself. According to The Research Council of Oman (2013), the government backs up private and public innovation efforts, especially research and development in critical fields.
With the wave of government support in the development of technologies for innovation, the next thing that organizations in Oman should note is the value of human resources. Throughout this paper, I have mentioned about the importance of intangible assets. As the government brings in the tangible assets, organizations should also do their best to improve the intangible assets – the human resources. The support of the organization is an important factor to innovation and support may be of learning opportunity. Organizations in Oman should recognize the need of making people ready for changes and placing them in an opportunity of learning that will empower them to become assets for innovation.
As much as the goal an innovative environment is to relax the bureaucracy of the organization, Oman private and public companies should open itself for the innovative ideas that will be brought in by the learning of the human resource assets. It should be that the elements of innovation – technology, human resources, and culture – should come together for the achievement of the organization's goals and objectives.
References:
Eversheim, W. (2009).Innovation Management for Technical Products: Systematic and Integrated Product Development and Production Planning. Springer.
Fulford, H. (2011). Proceedings of the 5th European Conference on Innovation and Entrepreneurship. Academic Conferences Limited.
Gessinger, G. (2009). Materials and Innovative Product Development: Using Common Sense. Butterworth-Heinemann.
Liyanage, S. (2006). Serendipitous and Strategic Innovation: A Systems Approach to Managing Science-Based Innovation. Greenwood Publishing Group.
Mairesse, J. & Mohnen, P. (2004). "The Importance of R&D for Innovation: A Reassessment Using French Survey Data." NBER Working Paper No. 10897.
Morris, M., et.al. (2010). Corporate Entrepreneurship & Innovation: Entrepreneurial Development Within Organizations. Cengage Learning.
Prideaux, B, et.al. (2006). Managing Tourism and Hospitality Services: Theory and International Applications. CABI.
Sussman, R. (2006). Innovate or Perish! Seven-Step Innovation Process to Meet the Challenges of Globalization. Productive Publications.
The Research Council. (2013). Innovation Must be for Development. Retrieved from http://home.trc.gov.om/tabid/819/language/en-US/Default.aspx
Tidd, J. & Bessant, J. Managing Innovation: Integrating Technological, Market and Organizational Change. John Wiley & Sons.
