If your business is not innovating, it stops in time. That’s why innovation management is so important: it creates methods and structures for ideas to be generated, tested and put into practice, resulting in improvements for the business.
After all, much is said about the importance of a culture of innovation for a company. But is it simply about recruiting creative professionals?
Of course not — and innovation management proves it. This function systematizes the way a company handles, stimulates and implements innovative ideas in the business, transforming them into solutions.
In times of strong competition and the need to create differentials to win over customers, this process gained even more relevance. However, it is common to also face some challenges to implement innovation management. After all, is this really necessary?
Without a doubt. Still, there are important differences between simply fostering innovation and subjecting it to a management process. Thinking about it, we created this content to clarify the issue once and for all.
We will explain everything about the subject, from the importance of innovation management for the development of organizations to its practical application. Let’s go?
What is innovation management?
The most accepted definition of innovation management is that it is the process of managing new ideas, from their origin (ideation) to their practical application, in order to materialize innovative ideas and turn them into useful solutions for the business.
For some, it seems like an incongruous role: after all, how can you tame and systematize something that is not structured at all? Well, this is the challenge behind innovation management.
That is, to systematize the creation and application of ideas.
Maybe you ask yourself: “Which sector is responsible for this? “
Well, in practice, innovation management is normally carried out by a professional in the HR area. However, in the process of building an innovative structure, people from all sectors participate.
After all, innovation can come from all players in the business — as well as be destined for internal and external improvements and optimizations.
How to systematize innovation management
Treating innovation as part of the business strategy means adopting it as a mechanism capable of creating value for the company. This requires managers to be able to identify opportunities and modify the organization’s way of working so that it is able to achieve increasingly better results.
To sustain this practice, one of the pillars of innovation management is the use of a digital solution to process and apply the ideas developed, either by collecting data from the management system (ERP ) or CRM , or by other means. It is worth noting that some significant changes must occur in the internal dynamics of the company, starting with the mindset of employees.
Putting a disruptive idea into practice is one thing. Systematizing innovation as a value creation tool is another, and this requires an innovative culture. Roughly speaking, professionals must understand the objectives to be achieved and the means to do so. To understand the details of this new dynamic, see below some of the practices adopted by an innovation management in full execution:
- mapping of opportunities and threats;
- reformulation and review of processes aimed at reducing rework or optimizing the activity;
- encouraging creativity;
- constant training;
- coordination and control of activities;
- analysis and optimization of the use of resources (human and technological);
- construction and strengthening of relationships (internal and external to the company);
- talent identification and development.
These are just a few examples of ways of working that depend on efficient management of available resources and on fostering an innovative culture. Practices can go further, according to the demands and characteristics of each company.
It is worth mentioning, however, that it is essential to have a tool, such as a good ERP , to manage these activities in order to keep them aligned with the business objectives.
Innovation drives development
Innovation management lays the groundwork for development subject to strategic control. This means promoting the creation and use of new products and services without giving up planning and predicting the results. After all, innovating requires investment. Investing, in turn, requires that objectives be analyzed for the likelihood of bringing good results.
The fact is that this new way of working allows companies to approach other actors (suppliers , customers, strategic partners, etc.) to align their objectives and work cooperatively. Open innovation is a good example of this: through innovation management, more and more companies attract customers and suppliers to participate in the development of ideas and products.
Consequently, the company becomes more flexible, agile and able to create based on market demands and opportunities.
But, after all, how to bring the concept to the reality of my company?
Innovation management in practice: promoting competitive advantages
The first step is to promote a management strategy that includes the mapping of opportunities and risks in each activity. This should be done both in the business strategy (that is, in the sector in which the company operates) and in the company’s departments. In the first case, the objective is to collect data to generate insights about possible new products and services. In the second, the scope is the work method, which must be continuously improved.
Furthermore, it is crucial not to compromise on predictability. Whenever an opportunity is identified, the conceived idea must be subject to a profitability analysis. After all, submitting innovation to a management process is precisely avoiding uncertain investments, or long shots. Good ideas without strong guaranteed returns are problematic, as they can compromise the company financially — even though no idea should simply be discarded.
Added to this, we have the management of creative teams. The core of disruptive action is an organization’s innovative culture . In this sense, knowing how to use the available resources intelligently does not simply involve reviewing software and other tools: it is necessary to know the professionals, involve them in strategic discussions and place them in activities in which they can have greater performance.
It is worth highlighting the importance of leaders capable of motivating the teams. After all, no matter how aware employees are of the company’s objectives, it is essential that they are engaged in activities — something that starts with valuing individual and collective work, for example.
These are significant and challenging changes, but which can be faced with peace of mind by organizations that believe in the creativity and potential of their teams.
What types of innovation?
It is common for corporate innovation to be understood in two ways: disruptive and incremental.
1. Disruptive innovation
Disruptive innovation is the most radical within a company. It is the one that transforms the whole (or at least part of) a market with a new solution that revolutionizes it.
Examples abound, such as Uber, which entered the transport niche by taking advantage of a gap in convenience, price and practicality that existed between public transport and taxi services.
Another example was Apple with iPods in the early 2000s, revolutionizing the way of consuming, buying and downloading music. The iPhone can also be placed in this category.
Although cell phones, in 2007, were already taking great steps towards innovation, it can be said that the iPhone ignited the spark for the realization of smart phones as a market preference.
2. Incremental innovation
Incremental innovation is one that, as the name implies, improves an existing product, service or process. It’s a way to optimize value or modernize it.
The smart phones themselves, which we mentioned earlier, undergo incremental innovations year after year: whether in performance or in the features they offer (such as improvements in cameras, larger screens, etc.).
Innovation levels
Understanding the levels of innovation is essential to understand where your company is when it comes to innovating and transforming your business.
Why? Well, this has everything to do with the steps you will take in structuring the generation of ideas in your company.
To be truly successful, it’s not enough to simply encourage your employees to “get creative”. It is necessary to direct this creativity.
And understanding the levels is essential to doing it the best way. Check out:
1st Level – Improvement
Improvement is the first level of innovation you should consider in your business. That is, it depends on an overview of your company, in order to have an understanding of what is already working — but needs improvement.
Did you remember anything? It is basically the application of incremental innovation in the business.
The intention is to map everything that, despite working or being in practice, is not 100% optimized. What paths to take to improve these processes, services or products?
It’s your mission in this first level!
2nd Level – Expansion
The second level deals with the expansion of the company. That is, understanding which new business models you can incorporate into the organization, in search of greater market share, which will impact new forms of revenue and better growth opportunities.
Here, it is necessary that the company dominates its main market, but that it has markets and opportunities parallel to its central performance that can be taken advantage of.
3rd Level – Risk
The level of risk is what can be defined as the most experimental of them. It is about the materialization of disruptive and transformative ideas, capable of taking the business to another level.
Here, it is worth mentioning that investment in ideas often has a more experimental character — as we mentioned. That is, the risk of failure exists.
So why does this level exist? It’s just that, depending on the business, disruption is the only way to stand out in the future.
Diving into the third level of innovation often means meeting market trends.
An example can be seen in the large vehicle manufacturers, which are only now showing concern with the creation of electric vehicles — running in the wake of innovative and very successful companies, such as Tesla Motors.
