Innovation management is a diverse topic with many different layers and several different models, theories and frameworks that can be used to classify different types of innovations and explain common regularities. Understanding some of the commonly accepted innovation models and theories helps make sense of the complex topic. While none of them can capture the essence of innovation alone, and although some of the models can be and have been criticized, they allow you to form a pretty good overview of the subject.
Open innovation is a form of innovation where knowledgeable and creative individuals who work outside the company, or, in a different team, can also contribute to achieving strategic goals through innovation. Sharing intellectual property both ways can often be useful for different parties in different ways.
More information is often better, however, it has also been proven that good ideas may become mediocre or even die if you rely on too many opinions. So, instead of automatically inviting everyone in the open process, you should make sure open innovation is a suitable method for your specific case and engage only those who are actually relevant. What comes to open innovation cases, only the sky is the limit.
Some might use open innovation to add value to their hardware, while others use it to gain more information for developing new products, for example. Netflix , for example, launched an open innovation challenge called Netflix Prize in , that was open to anyone from the public as long as they were not professionally affiliated with Netflix.
For the winner of the competition, Netflix offered a grand prize of 1 million USD. You'll find other interesting examples and key learnings from a wide range of companies using open innovation in different ways behind the links below.
Although open innovation has become a popular way for different sized organizations to innovate, there are also some challenges they face when implementing it. Often, the more people you involve in the innovation process, the more there is to consider as the discussion has to be facilitated to remain active, relevant and fruitful.
The most common hurdles to open innovation can be categorized as either strategic, operational, legal or cultural. Read more: Open innovation challenges — How to overcome the most common ones? Because innovation is already challenging in itself, it really doesn't make sense to spend time on reinventing the wheel. Instead, you can use some of the existing tools that have proven to be great for creating something new. These practical tools help turn knowledge into concrete actions and make the most out of your innovation journey.
Because we strongly believe that shared knowledge is the best knowledge, we highly recommend sharing these tools with your colleagues to achieve the best outcome. Learn more about how to use the toolkit: Innovation Toolkit — Tips, Tools and Templates for Managing Innovation and click the link below to get your own copy!
If you are new to innovation, the terminology around it might feel slightly overwhelming. Thus, we've gathered over a hundred innovation-related definitions and terms in one place to explain what each of them really means.
You might have come across this particular quote in different contexts and let me tell you — there are plenty more! People use quotes to justify their own views and to appear sharp as i can be difficult to explain cause and effect relationships. Therefore, you should be familiar with these common quotes not only in terms of learning but also in terms of clarity.
Perhaps you can even learn something new from them. We often get asked for all kinds of numbers and statistics regarding both our clients, as well as the industry in general. For an organization to increase the probability of succeeding in innovation, it simply makes sense to try to collect a large number of different ideas, and then to manage and develop them effectively.
Idea management, in turn, can be defined as systematically managing the process of collecting and developing ideas and insights to get the most value out of them.
Idea generation is the process of creating, developing and communicating ideas, be they abstract, concrete, or visual. There are many ways to generate more ideas. You can, for example collect them from your employees or use different techniques for coming up with them.
New ideas can help you move forward if you feel stuck with a task or are unable to solve a certain problem. Because you're likely going to need different kinds of ideas, try testing a few different idea generation techniques to see which ones work the best.
Most of these ideation methods can be used for more effective brainstorming but can also be used for other type of ideation purposes. Read more: Tools and techniques for generating ideas. An idea challenge is another ideation technique, a focused form of innovation where people are challenged to come up with new ideas around a specific theme. It is basically just a way of focusing ideation to effectively collect ideas in insights from your target audience. Idea challenge is often limited by time after which the most potential ones will be refined and developed further.
Raw ideas are usually far from perfect, but people usually come up with that idea for a reason. Even the worst ideas can lead to accelerated learning and you discovering something important about your business. The key to finding the diamonds in the rough is to get plenty of ideas and to have an effective process for identifying the most promising ones and managing them.
Here, a solid idea management tool can help. Read more: How to get more good ideas and avoid the bad ones? Idea evaluation is an important tool for making better decisions. It allows you to prioritize a number of different ideas and choose the ones to pursue. There are several different ways in which you can evaluate your ideas. This provides you with more data points to use as the basis of your evaluation.
Different kinds of ideas need to be evaluated differently, which is why your idea management process should also take these differences into account. Read more: Idea evaluation — What is it and how should one do it? While you might think that you don't have an idea management process, you actually always do. Every company has ideas and every company makes decisions on how to proceed with these ideas, one way or the other.
By defining a process for managing ideas, you'll introduce clear responsibilities that will hold people accountable for progress, as well as create a set of common rules that make the process transparent and understandable for everyone.
Idea validation is the process of gathering evidence for the feasibility of ideas through experimentation to make fast, informed and de-risked decisions. The purpose of idea validation is to expose the idea to the real world before you spend a lot of time and money perfecting your final product or offering.
New ideas always have plenty of built-in assumptions and if some of them prove wrong, it can destroy your plans at once. Validation reduces the risk, speeds up the delivery of a value-creating service in the market, and minimizes the costs.
Although there are multiple different ways to validate an idea, the overall validation process is quite simple and straightforward:. Define goals and identify assumptions 2. While the terminology might be new, the concept of an MVP is not. Take Henry Ford and the Wright Brothers; they all used iterative prototyping to accelerate the development of their respective innovations.
Yet with the propagation of more bureaucratic product development processes, Marion says, and the need to move innovation from idea to development, the discovery phase has become one of planning and analysis, thereby pushing prototyping to the development phase.
The development phase has changed dramatically over the last 10 to 15 years with the introduction of collaborative and digital design tools and rapid prototyping. Distributed teams, innovation ecosystems, and open innovation efforts enable agile design iteration, faster development cycles, and increased levels of product complexity and performance. For example, an engineer developing a new bracket for a jet engine can rely on real-time design analysis to make the part stronger and less prone to failure.
They can then leverage design tools to optimize the bracket for additive manufacturing, including the 3D printing of final production parts.
Companies can also partner with firms like Forth, which crowdsources experts to help solve design problems, to gain additional feedback and industry expertise. The commercialization process is broken into phases of its own—from the initial introduction of a product or service to its mass production and adoption.
Marion recommends companies explore extended pilot production. Although the launch will be slower, the strategy provides teams with more time to vet any problems and enables them to gain real-time information on market acceptance.
How will you increase awareness and create customer loyalty? Only 39 percent of respondents in a McKinsey survey said their companies were good at commercializing new products or services. Establishing an agreed upon go-to-market market strategy is critical during the commercialization phase. The more streamlined the approach, the more effective the launch, and the more likely it is your product or service will be well-accepted by the market.
Today, companies are able to quickly iterate and validate their products or services. This is why it is important to carry out continued research and development during and after the innovation process. It ensures that your innovation remains compatible throughout its lifetime. This is how complicated an innovation is perceived to be. If it is difficult to use or understand, then adopters might stay away from it.
Innovations that require customers to acquire new knowledge might take time to be adopted. If you are trying out something that requires new knowledge or skill, you need to be patient and make plans to provide the knowledge needed. Otherwise, you may get very disappointed with the innovation.
Every person has a drive for innovation be it in small things or big ones. Therefore, we cannot assume that innovations are a modern day process. It began long ago but it is until that individuals started coming up with innovation models. So far there have been six models that have been relied on for innovations. Technology, research and development and market trends have contributed in the evolution of the models over time.
We will look at the six models to see the processes that the models proposed an innovation process should take. We will also highlight the advantages of each model and the disadvantages. Note that the disadvantages led to the creation of new models to overcome the shortcomings of the old models.
The first generation model was developed by NASA in as a management tool. NASA referred to the process as the Phase-review-processes or the technology push. The process was broken down to help in systematizing the work and for controlling contractors and suppliers who were working on space projects. Since progress to the next stage relied on completion of the previous stage, the management held a meeting when a stage was completed. Their role was to determine whether the set objectives for the stage had been met.
They also met to decide on the progress of the project. The processes were linear in nature and relied on engineering. The second generation models are similar to their predecessor except that, the model draws its innovation idea from the market place.
The first generation model draws its idea from research and development and science which are different from the second model. The second and first generation models had a number of limitations which the third generation model tries to overcome. Cooper is credited to have come up with the third generation models. The stage acknowledges that customer satisfaction, market trends and technology are all important in the innovation process.
Cooper developed a standardized approach for development of projects. The model uses the stage gate approach in developing an innovation. Every stage has a purpose which must be completed before moving to the next stage. If one stage is reviewed negatively, then the team does not move on to the next stage. As a result, they continue working on the present stage until it is positively reviewed.
According to the third generation model, an idea originates from creativity, customer feedback or basic research. Evaluation of the ideas takes place in the first gate. Besides, the stage is inexpensive and takes a short period of time.
The gate assesses the innovative idea in terms of finances, market and technology. Further, the second gate characterizes detailed investigations which results in a business plan. Therefore, the business plan acts as a basis for decision making about the idea. Consequently, if the idea is accepted, the process of developing the product begins in stage three. In addition, the team develops a marketing concept.
Gate three produces a prototype of the product. The prototype is evaluated to make sure it meets the specified standard stated in gate three. During the validation stage, customer field trials, in-house product tests, trial productions and tests markets take place.
After the product is verified, then you can plan for market launch and production start-ups. The third generation model allows for not only linear processes but also parallel ones in order to speed up the process. The model also involves all processes from innovation to the launch of the idea. The fourth generation model uses an interactive approach which is different from the linear approach which the previous models use.
Furthermore, the model looks at the innovation process as a set of parallel activities across the organizational functions. However, the interactive models do not explain the innovation process. As a result, there has been an increase in:. The Minnesota Innovation Research program is a good example of a fourth generation model.
The model was developed in and is also known as the MIRP model. It has three distinct stages that firms follow to develop an innovative idea. There is the initiation period then the development period and finally, the implementation period. There are specific processes that take place during each stage of the process. However there are no boundaries between the periods. In fact, the characteristics between periods seem to overlap. Specifically, the development and implementation stage overlap.
This is because, a number of innovation ideas develop when the innovation team interacts with the market. The fifth generation model is also known as the network model or a closed innovation model. Closed innovation models explain the intricacy of the innovation process. Its main focus is the involvement of the external environment. Besides, the model also focuses on effective communication with the external environment. Since innovation relies on both external and internal networks, the model emphasizes on the need for establishing links between the two networks.
Galanakis developed an innovation model which borrows a lot from the fifth generation model. Its position signifies its role in generating and promoting innovations in the nation, industrial sector and the market.
Hence, the model relies on three main innovation processes:. Internal factors such as organizational structure and corporate strategy amongst other affect the process. Additionally, external factors like national infrastructure and regulations amongst others also affect the process.
The open innovation model is also known as the sixth generation model. The model is a network model. It focuses on;. Open innovation model looks at how a combination of the two concepts can lead to technological advancements. Chesbrough came up with the team open innovation. Besides, the model presents less risks when innovation. Companies who use this model enjoy a large pool of ideas to start with. They then narrow down to the most ideal idea. While the innovation process has many desirable benefits for companies seeking to remain above the rest, successfully integrating innovation into the business and reaping the benefits is no easy task.
However, you will find listed below tips on how to make the innovation process work for you and your company. An innovation culture is a strategy towards becoming a market leader.
A company that has an innovation culture enjoys larger profit margins and is an authority in its area of industry. Though there are risks involved with the innovation process, the benefits are more. You should ensure you keep a close contact with the trends in the market to avoid creating a product that will be rejected. Again, involve all stakeholders in the innovation process; they all have different knowledge and experience that will positively influence the process. The success of any innovation is when the product or service is accepted in the market.
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