What is innovation management and why is it needed

In this blog post, we cover the essentials of managing innovation, answering the elusive question ‘what is innovation management?’ whilst also exploring the benefits and importance of innovation management.

What is Innovation Management?

Putting it simply, innovation management is the process of managing innovative ideas. Say a business leader has an idea to increase revenue or market share. For this idea to have a real impact, it needs to be turned into something actionable (such as creating a new product). Therefore, we can define innovation management as the way new ideas are developed and refined until they become a reality.

It’s important to remember that ideas aren’t innovative simply by being new. The idea must create positive change such as profit or customer satisfaction. Ultimately, innovation has to be something groundbreaking and exciting that sets your business apart from the competition.

Why is innovation management important in business?

‘Innovation’ isn’t a benefit in and of itself. You may hear someone suggest a particular course of action because it will make the business ‘more innovative.’ But what does that mean? How does a business being more innovative benefit its employees and stakeholders?

We need to talk about innovation as something tangible and measurable. A great example of this is process innovation. Say that your employees are tired of relying on an outdated or cumbersome process. You have an idea that maybe parts of that process can be expedited, outsourced or improved by new technology. This idea can be considered an example of process innovation as it not only involves something new, but it has several benefits such as reduced cost and improved morale.

Innovation can also be a vehicle to attract top talent that is more likely to want to work for a business successfully driving forward innovation. They then become loyal employees who value the opportunity to be a part of the innovation process. Our innovation management software gives them the tools to transform ideas into reality.

The above are just a handful of benefits associated with innovation. Here are some other common examples:

1. Resolving recurring problems in the business with creative solutions
2. Increasing workplace productivity with new processes and procedures
3. Showcasing business values and highlighting your qualities
4. Standing out as an innovative business ahead of the competition
5. Boosting employee morale and improving business performance

All cracking reasons to encourage innovation in your business, but all of this potential can only be reached with effective innovation management processes in place. The importance of innovation management, therefore, is that it’s the only way you are going to transform big ideas into reality and benefit from the positive outcomes.

Understanding the different types of innovation

It’s a common misconception that a business is either innovative or not innovative. A simplistic perspective that doesn’t account for the different types of innovation that may or may not be outwardly obvious as ‘innovative’. The nuances of innovation management are very much linked to the different types of innovation. Here’s a breakdown of those types and their translation into what they actually mean in a business context, to help you navigate just how far-reaching your innovation management strategy can go:

1. Incremental innovation: improvements to existing mechanisms

This is the most common type of innovation because it is less daunting and a more realistic way of bringing about innovation. Incremental innovation is to spot opportunities for improvements within existing tools, processes, technology and markets. This is something your business may be doing already without labelling it as ‘innovation’. However, small ideas often get lost or forgotten if there’s no clear process in place on how to capture, curate and manage them. Incremental innovation is subtle but effective and still requires a level of innovation management. This helps transform ideas into action whilst creating a feedback loop back to the employee who came up with the idea in the first place.

2. Disruptive innovation: a bold move that rocks the boat

The most widely known example of this type of innovation is Apple’s iPhone. It was the first to move away from buttons, keypads and scroll wheels. Also known as stealth innovation, disruptive innovation is often expensive and considered superior to anything else in existence. It’s not just new to you, it’s new full stop. Internally, however, this could be something other businesses are already using but it’s new to you. It’s disruptive to the operation of the business and therefore holds more risk if not managed effectively.

3. Architectural innovation: using proven technology in a new way

This type of innovation is about positioning. The technology itself is already used and effective in other areas of the market or your business. One of your departments, for instance, could already be using collaborative technology that you decide to implement across the business. Or, you could use it to build a customer-facing community. Architectural innovation is taking something that already works and using it in a different way or with a different user base and market. The risks are lower because you know the technology works. You just need to adapt and prepare it for the needs of the alternative user base.

4. Radical innovation: the mind-blowing stuff that breaks ground

Beyond just being ‘disruptive’, radical innovation is what many consider to be true innovation. It’s where new industries are born and entire movements are created. It’s where some of the greatest entrepreneurs and innovators like to play. Radical innovation is high risk but also holds high reward for anyone able to pull it off. The first airplane, the first mobile phone, the first laptop and tablet are all examples of radical innovation. What’s often missing with radical innovation is radical innovation management. Even the most creative ideas need process and structure to pull them off in reality.

Viewing innovation under these four categories highlights the many opportunities for innovation in your business, but also how important it is to have effective innovation management in place. If you’re struggling to get started or jump-start innovation in your business, you could begin with incremental innovation and later introduce more disruptive ideas that can drive the business forward.

The lifecycle of innovation management

Many businesses have the desire to innovate but struggle to do so amidst varying operational pressures and external requests. Justifying budget and finding time to actually implement innovative ideas is a challenge for many businesses. The full lifecycle of innovation includes four key elements that help drive them from an initial idea to action and a successful end result. These are:

1. Ideation
2. Collaboration
3. Implementation
4. Value creation

Our idea management software takes this further by breaking these phases down into incremental steps. We take you through each stage of development in a way that is both concise and manageable but also likely to inspire your next move. These include:

• Sharing challenges, strategic business goals and objectives – moving ideas through the funnel so only the best and most relevant ones come to fruition.
• Gaining feedback and sharing learnings – leading you to collate feedback at every step and sharing gained knowledge with the relevant stakeholders. Enabling a well-defined innovation management process that doesn’t stagnate and develops in an ever-evolving and innovative way.
• Managing key stakeholder expectations – while you don’t need everyone to be actively involved in the process, you should communicate values and key measures from the outset. This also means you can measure the results and report on progress.

Examples of Successful Innovation Management

Innovation management is the key to turning innovative ideas into action, but only if it is done well. Like any management process, it needs the right tools in place to facilitate progress.

Ironically many businesses are keen to innovate but are not very innovative about their approach to innovation management. To truly make progress on creative ideas and get the best out of new technology, you need the right tools to make it happen.

Our innovation management platform empowers companies to bring their most impactful ideas to fruition. Here are just a few examples of how businesses can succeed with innovation management:

Covea: How One Idea Saved £2.5 million

Covea are a nationwide insurance provider, serving millions of policyholders throughout the year. They faced numerous obstacles to their innovation goals. Firstly, their innovation management strategy was confined to a single department, with no company-wide incentives to submit new ideas. Even if employees were encouraged to come up with new ideas, they would be hindered by outdated technology as well as a lack of communication across departments.

Covea gathered new ideas from across their business. One of these ideas was to introduce web chat functionality on their website. This would not only provide customers with high-quality 24/7 support but also reduce the number of queries answered by call handlers. This allowed them to focus on more complex tasks. By outsourcing these repetitive queries to chatbots, Covea are projected to save £2.5 million over the next 5 years.

BMS: Securing a £500 million Investment in a Fast-Changing Landscape

BMS is a prestigious, award-winning insurance company, with a firm goal to remain at the forefront of their industry. They faced a number of challenges unique to the brokerage industry, from disintermediation to new cutting-edge FinTech products. They decided that innovation management would help them stay relevant and maintain their place in the market, whilst also continuing to attract new talent for its workforce.

BMS created an ‘Innovation Lab’, wherein a select group of employees would be responsible for innovative new ideas. However, they soon realised that they needed an innovation management solution that could be scaled across their entire organisation.

After implementing our innovation management platform, BMS made a staggering leap in developing a company-wide innovation culture, with 6.2 out of every 10 new ideas being executed. This positioned them as a future industry leader and was undoubtedly a factor in BMS closing a long-term investment to the value of £500m.