Posts Tagged ‘Strategic Innovation’
Open innovation and real life…
September 17th, 2009 | 
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In the university, we learn the models for innovation, such as open innovation (Chesborough) and the salmon model (Orjasaeter). However, in real life, these models are more complex and harder to make work. In an interview, James Todhunter from Invention Machine says that in real life, most organization find it hard to derive value from open innovation, and that co-operation starting out with good intentions, the programs stall. Knowing how to avoid this is a key feature of innovation management.
He further says that innovation is everyone’s job at a company, and that open innovation is useful for making employees initiatives being viewed as opportunities and not threats. However, innovation do not “just happen”, and an innovation department is essential to create a culture and a context where innovation can happen. Communication, flowing in all directions, he lists as the key element to make open innovation work.
When the ideas are gathered, deciding what options to pursue, Todhunter uses the 3F method; fit, feasibility and finance. The innovation must fit your need and differentiate your product. It must be feasible for your organization’s business model. It must be financially rewarding. Hence innovation is not just about net present value, but strategic goals.
For a company to increase its innovation, it must commit on every level. This means giving employees training and tools for innovation, as well as managerial commitment. Putting strategic innovation into the business model is rewarding, but takes up a lot of resources. Critical thinking and learning skills will be the main building blocks for successful innovation in the future.
The full interview can be found by clicking here.
Modern strategic innovation includes innovation in business model
In an ever-changing economy, just relying on product innovation is simply not enough. Innovation is a wide field, including process innovation, social innovation, environmental innovation – but also very important organizational and business innovation. Companies focusing on growth by product innovation can easily become locked into their current business model. Investment based on current business model reinvents the current model, which can later be outcompeted due to disruptive technology and cycles of technological development. Institutions and value chains can serve as major reasons for inertia in your organization.
According to business strategist, Rowan Gibson, “perpetual growth requires perpetual renewal. It’s the only way to maintain continuity in a discontinuous world. And the fuel for renewal is innovation. Not merely innovation at the margins but deep, strategic innovation at the level of the core business model.” I certainly agree with him on this one, check out his article on http://www.business-strategy-innovation.com/2009/09/innovation-goal-growth-or-strategic.html
Posted in Strategic Innovation | 
Tags: Innovation, innovation business model, Innovation Management, Strategic Innovation | 
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Strategic Innovation
Company- and product lifecycles today are shorter than any time before in modern history, and strategic innovation is the only solution to stay on top of the industry in the long-term perspective. A study performed by McKinsey’s researchers demonstrates how companies on the S&P 500 has had an average lifetime of only 15 years in 2000, compared to 50-60 years in the 1920s (Foster and Kaplan 2001). Furthermore, life expectancy in Japan and Europe is now only 12,5 years (Burns, 2001). It is clear that companies aiming for a long-term future needs to deal with change and constantly produce new product cycles (innovate) to stay on top of competitors and markets.
Innovation is often described as a “black box” where one cannot predict the outcome of the input. Because variables the processes of innovation differ, it is hard to create a recipe for innovation. However, by putting preconditions in place by having plan for strategic innovation, one opens for innovation to happen. By learning about the process of innovation, and how to utilize this in the individual company, one gains competitive advantages that will outperform emerging competition.
On the input side, it is clear that learning is a central topic in innovation, and process and knowledge are vital elements that go before innovation. This learning occurs in a range of situations and is result of human interaction. Networks and organizations are therefore vital instruments to create a platform for learning. However, learning also takes place in a context, and at a certain location. There are many more variables that impact the learning process, and a strategic innovation plan is therefore needed to guide these variables towards a favorable context.
On the output side of innovation, there are many obstacles that prevent learning to become innovation. One major obstacle throughout history is that innovation has been the duty of R&D departments, and that new fancy solutions have been lacking a sufficient market to sell the product. Furthermore can organizational culture stop good ideas to reach the market due to lack of experimentation or inadequate incentive systems. Therefore, the management must make sure the organizations are prepared for innovation.
This website will help you understand innovation, so that you can have a killer advantage to battle the market in a time where change is the only constant. By implementing strategic innovation in your organization, your company will be prepared for long-term profit maximization, as well as social and environmental challenges in years to come.