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The success of a company largely depends on its ability to innovate. Innovation becomes especially relevant in light of the rapidly changing environment. At the same time, chief executives struggle with managing innovation initiatives: while being aware of innovation efforts that go on within their organisations, they fail to grasp the scope of these activities.
Recent research suggests that to excel at total innovation management companies need to pursue innovation at three levels of ambition, carefully managing the balance among them:
(1) Core – optimising existing products for existing customers;
(2) Adjacent – expanding from existing business into ‘new to the company’ business;
(3) Transformational – developing breakthroughs and inventing things for markets that do not yet exist.
Transformational initiatives, which attract around 10% of investments, bring the largest returns. They are vital to a company’s on-going health and require unique management approaches:
• Talent should include a diverse set of skills and be able to deal with ambiguous data • Teams should be separated from day-to-day operations • Funding should come from outside the normal budget cycle • Pipeline management should focus on the iterative development of a few promising ideas, not the ruthless filtering of many • Metrics should recognise nonfinancial achievements in early phases
To successfully manage innovation as an integrated system within overall portfolio goals it is essential to consider: How clear is your innovation ambition? Can you strike and maintain the right balance among the three levels of ambition? Is your total innovation system well-organised and managed?
Source: Nagji, B. and Tuff, G. (2012) Managing your innovation portfolio. Harvard Business Review. May
The concept explores innovation and how it can create and capture value for organisations. It will provide professionals with a basic understanding business innovation.
Innovation capital is critical to building a competitive advantage in the knowledge economy. The concept explains how organisations can leverage their unique organisational knowledge to create economies of scale and scope, as well as differentiation.
The concept determines the critical factors of innovation management. It reviews the managerial practices of successful innovators and summarises the strengths and limitations of innovative approaches.
Innovations may manifest in a variety of forms and are a critical competitive capability of most firms. Case study evidence presented alongside practical implementation steps, assist business leaders to understand how different types of innovation help to build an innovation culture.
Join thousands of leaders benefiting from their bi-monthly copy of The Leading Edge on topics like Organising and Managing Innovation Portfolio, to keep themselves at the cutting edge of leadership and management thinking.
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