What is innovation management?

Innovation management is the process of improving or optimizing processes, or creating new products or business models. It includes generating new innovative ideas and turning them into action plans, thus helping companies keep up with rapid market changes. Innovation is key to success in a competitive market.

When you are in a company that has been around for a long time, many things continue to be done as they were before. It’s easy to get stuck in that comfort zone. It can be challenging to find new ways to increase productivity and make the company more efficient.

What innovative companies do is focus on finding new innovative ideas that help them stand out from the crowd. However, these companies can only do it by starting to manage innovation through a good strategy.

What is an innovation strategy?

An innovation strategy is a plan in which a company seeks to innovate by creating greater value with higher customer satisfaction. It has both a short-term and a long-term component, allowing you to make the necessary decisions, based on each.

Short-Term Plan

The short-term plan is the one in which the company gives priority to short-term innovation projects, focusing primarily on incremental innovations mainly related to internal bureaucratic processes and existing products.

Long-Term Plan

The long-term strategic plan focuses on investing time and resources in disruptive or radical innovation initiatives and seeks to develop new products, address the creation of new processes, and reinvent the organization’s or company’s business model.

The creation of an innovative culture and new knowledge should be integrated into this strategy. This component of the strategy reduces the risk of the company, or part of it, becoming obsolete.

Importance and benefits of innovation management in companies

Innovation is important because in today’s business world, new knowledge is developed and applied. Innovation management can help a business in several ways.

**Increased Market Share and Profitability. **There is a higher likelihood of increased market share and business profitability.
Protection Against Competition. A competitor within the market can differentiate itself through innovation in its products and new business models and gaining competitive advantages.
Improved Image. Stakeholders perceive a business as successful if it takes advantage of new opportunities and makes significant changes.

Management of Different Types of Innovation

**Incremental Innovation. **This type of innovation requires a focus on the company’s current processes and products, so it is necessary to have feedback on which processes and products need to be improved. In this way, the uncertainty in these initiatives is lower, and so is the implementation time.
Disruptive Innovation. It may be a bit riskier, but it is the business’s way to reinvent itself through new developments. This requires that uncertainty be managed with more emphasis. It is important for businesses to have a solid strategy when considering whether to pursue incremental or disruptive innovation. When this type of innovation launches a new product, it is important to liaise with marketing, sales and operations areas, and make a handover to its day-to-day operation.
**Technological Innovation. **Additionally, it is important to manage technological advancements through an adequate technology management articulated with your innovation management.

The Link Between Innovation Management and Portfolio Management

Each business keeps a list or project portfolio that it is executing or plans to execute. It is important that within this list, all prioritized innovation initiatives are included, both incremental and disruptive initiatives.

Once a unique portfolio is established, a balance can be achieved that allows space for both incremental and disruptive innovations. This can not only be developed for projects, but also for the innovation of business models (business model canvas), where we differentiate which models are being optimized and which are being designed for the business’s future.

Key Elements in the Innovation Management Process (innovation activities in the lifecycle of an initiative)

Innovation management process involves activities throughout the lifecycle of an initiative. The key elements are the four phases of the innovation management process:

**Identification of Innovation Challenges. **These can range from unmet customer needs to processes that need to be optimized.
**Capturing Ideas. **We receive ideas from different stakeholders, which can range from our own employees to external entities such as customers, suppliers, universities, etc.
Implementation or Development of Initiatives. Here we carry out all the activities to materialize deliverables and reduce uncertainty for future investments.
**Value Capture. **in this phase, we review both quantitatively and qualitatively the benefits that innovation brings to our customers and to our business.

What is idea management?

It can be a challenge to find suitable ideas for an organization. The company’s idea management process begins with the idea generation stage. That is where people start generating ideas and recording them to be analyzed later.

The process continues through the idea selection stage, where ideas are chosen based on their potential benefit, investment, and effort. Finally, the process moves to the idea implementation stage. Ideas are implemented and put into action.

Implementation of Initiatives

Implementing an innovation is the process of making an innovation actually happen in a company. The implementation process begins by detailing the major components or phases of the product, process or business model.

The next step is the validation for these components. This is where small experiments are generated that help us to reduce uncertainty and gain more clarity. Then, when the uncertainty has been reduced, a work plan is detailed and executed. Depending on the case, it can be a waterfall project, SCRUM or another agile methodology.

How to Identify Innovators in the Company?

As the person responsible for innovation, it is your job to ensure that the innovative ideas generated by your company are turned into action plans. To do this, it is necessary to identify the most innovative and creative people. There are three ways to identify innovators in your company:

**Running tests on employees. **Although creativity and innovative skills can be developed with education, patience, and practice, There are people who already have the ability to identify, recognize, and understand customer needs and propose solutions.
Improving your culture and environment. When you focus on cultivating a culture in which innovation can flourish, once the new culture bears fruit, people will feel comfortable and will be able to innovate more easily. To do this, you can start by asking yourself, what are the barriers to innovation in the company? How can innovation be rewarded? What tools are available for innovation?
Reviewing previous innovations. When the current products or services were created, who was involved? Who designed their processes?

Open Innovation and Idea Crowdsourcing

These are very similar concepts. Open Innovation involves the development of a collaborative workspace with different people and external companies to generate cooperative relationships, and collaborative work in innovation initiatives. On the other hand, the Idea Crowdsourcing is a digital strategy, that makes the best of people to obtain innovative solutions through an open environment, and transforms the innovative potential of a crowd into an organized and lasting community.

We can leverage both approaches in order to interact with other people and companies and enhance innovation in our own.

How to Start Innovating?

****~~Understand the importance of innovation management.~~ If you have read this entire article, you have already complete this step.
Encourage and promote a culture of innovation. Innovation doesn’t work if an appropriate culture doesn’t exist.
Leverage on innovation management software. You can create it internally or, even better, use Colectidea, which already incorporates the best practices in innovation management.
Invest in education for yourself as an innovation leader, but also in your teams. You can start with agility and agile methodologies such as Scrum or Kanban.
Define your process. Innovation is a process. Although you can create it yourself, it would be like reinventing the wheel. That is why Colectidea provides you an optimized process.
Identify the initial innovation challenges.
Start receiving ideas.