Importance of Innovation Management
Introduction to Innovation And Technology Management
Stating the purpose
Nowadays, innovation is considered to be the most significant aspect for an individual and businesses. Managing and controlling innovation leads to enhance the level of both product and organisation. It is one of the management tools that allow managers and other people to cooperate with a common understanding of processes and goals (Afuah, 2003). In the present research report, researcher is evaluating and analysing the article made by author Rick Eagar. However, the author provides different views about importance of innovation management for attaining future success. In this article, he has focused on five key steps that for sure will lead to attain future success for the company. These innovation management concepts consist of customer based innovation, proactive business model innovation, Frugal Innovation, High speed/ low risk innovation and integrated innovation.
The main purpose behind conducting this study is to evaluate and analyse the significance of innovation management in coming years. There are certain expectations of researcher from the study which includes understanding the key trends in managing innovation for the companies, illustrating different approaches and concepts related to the topic and the way companies will adapt to the changing technology and environment.
Limitations of the study
Carrying out a research study is one of the toughest tasks for the scholars and investigators. However, in general research report is defined as the set of complex activities which are mould together in order to accomplish report in smart and sequential manner. In conducting a research project, there are certain problems and obstacles that investigator faces which are as follows:
Lengthy Process: Carrying out whole research report is considered as one of the lengthy processes. It is the responsibility of researcher to ensure that all the correct tools and techniques are being used as per the needs and wants of study to assure successful carry out of a project. Further, research as defined above is a sequential process which takes time to accomplish. This process consists of different tasks and procedures such as collection of data, analysis and conclusion (Libaers, 2014). In the present study, the researcher has to critically evaluate the findings and suggestions of author for which different sources are required and that takes time. On the other hand, having limited time period might effect on the overall quality of research project.
Insufficient secondary information: Looking at the nature of current study, researcher has to focus on secondary source of collecting data so that different authors’ thoughts and perceptions towards innovation management can be evaluated. But while conducting the study, the researcher faced several issues related to insufficiency of secondary as numbers of sites does not have proper access to use. Therefore, due to limited access to information, it can make huge impact on the range of information and can minimize the scope of covering different aspects of study.
Methodology of the report
Research Philosophy: It helps in creating a background for the researcher. However, there are different types of philosophies such as: interpretivism and positivism (Brexendorf, Bayus and Keller, 2015). Looking the present topic, positivism philosophy will be used because it will encourage researcher to focus on certain facts and figures which are highly required to critically evaluate the findings and recommendations of Author Rick Eagar in the article.
Research Approach: This element of research methodology shows the manner in which study is being carried out. There are two different approaches available such as: inductive and deductive. For the present study, evaluating the study of Rick, researcher will use inductive approach because it will help in easily evaluating the key steps of innovation management for attaining future success for an organisation in such competitive market.
Research Purpose: Purpose of the research act as a blue print of the entire study and clearly describes the type of study selected. There are three different types of research designs: descriptive, exploratory and explanatory research design. In the present study, exploratory research design will be used because it will help in exploring perspectives of different authors as well as contracting it to the findings and facts of Author Rick Eagar for the given article.
Research Strategy: This is the way through the help of which investigator will be carrying out entire course of study (Nagano, Stefanovitz and Vick, 2014). There are two types of research strategy: qualitative and quantitative. In the present study, qualitative approach will be used as in the whole study researcher has to critically evaluate the findings and suggestion of article given.
Data Collection: It is one of the most significant aspects of entire study. There are two methods of collecting data such as: primary and secondary. In the present study, researcher will only focus on collecting data through secondary research as the nature of study demands this.
Innovation management play a significant role in development of business. Looking at the present corporate conditions, it can be stated that innovation in products and procedure has become a necessity as customers or target audience have changed their tastes and preferences as per the change in trends and environment. It is essential for companies to remain innovative and for that they need to focus on developing new products and services at constant basis. Bringing creativity within offerings is the core base of achieving competitive advantage. As per the study of Goetsch and Davis (2014), innovation processes can either be pushed or pulled through development. In this, pushed process is based on existing or newly invented technology that company has to access and tries to generate profitable outcomes (Goetsch and Davis, 2014). Whereas, a pulled process focuses on finding those areas which are not satisfying the needs and wants of customers and accordingly indulging potential measures. Similar to this Bowers and Khorakian (2014) proposed that, with constantly increasing competition it has become crucial for firms to bring innovation and creativity within their products and services in order to create demand within market as well as attain competitive edge.
From the study of Slater, Mohr and Sengupta (2014) researcher evaluated that, in the present environment where failure rate is higher than success rate because of intense competition, it is important for brands to know that their decisions are based on facts and not just intuition and beliefs. In the past, methods of identifying ideas for new products were based on what the customers need. But nowadays, it has become crucial for existing firms to understand the needs and wants of customers and accordingly offering them products in order to create better customer base for coming years (Bowers and Khorakian, 2014). Supporting to this fact, Eagar in his article states that there are three key trends that drives customer based innovation strongly such as: total customer experience, design in emotional aspect and social networking.
According to Drucker (2014), successful marketing of a new product relies on many factors and in such competitive market it is essential to cover all the aspects smartly and efficiently. The main purpose of any business enterprise is to attract, create and keep customers (Drucker, 2014). However, customer base innovation helps companies in developing products and services by understanding their needs so that it can be satisfied and company can attain future growth and sustainability. Similar to this Zhao and Zhu (2014) proposed that, customer centric innovation focuses on total customer experience that designs in emotional aspects of the product and yields a flexible customer interaction. As per the thoughts of Sommerlatte (2013) Customer based innovation is a good thing if it is based on developing insights about what the customers need. This is not necessarily what the customers say they want. Customers rarely come up with big breakthrough ideas of, say, an iPad-like nature. However, for this companies have to change their way of approaching customers such as they need to be more flexible and creative in interacting with customers as well as need to become more sophisticated in their open innovation approaches.
According to the Plantes (2013), business models have become the new basis of competition, replacing product features and benefits as the playing field on which companies emerge as dominant or laggards. However, there are several companies who are facing major concerns in maintaining margins in their businesses and it is all due to the traditional approaches used by the management. With increasing competition it has become difficult for companies to maintain customer demand in this condition it is important to offer what exactly the requirement of consumer so that all the needs and wants can be satisfied (de Araújo Burcharth, Knudsen and Søndergaard, 2014). Further, author proposed that innovation and evolving a company's business model are the heart of leader's strategic work. As per the view of Tidd (2013), Companies’ approaches to defining value have been too narrow. Companies need to think about how to partner in new ways with others to create and capture more value. However. Business model innovation embraces various types of modifications to an existing business model. These changes or modifications can be proactive or forced by competitors. In context to this Seybold (2014) defines that, as per the condition of corporate market in present world it can be said that companies need to become proactive in terms of innovation otherwise they would be forced to do so by their existing competitors (Eagar, 2015). Further authors defines that there are certain elements available behind consistently successful companies business models such as:
- Offer unique, relevant, hard to copy value promise.
- Models are aligned with market trends
- Establish new growth platforms etc.
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Through the study of Oakland (2014), Frugal innovation refers to a process of reducing the complexness and the cost associated with a good and its production. In other words, this process refers to method of reducing or removing non-essential features from a durable products such as car or phone. There are several theories like reverse innovation, disruptive innovation, cots innovation, frugal innovation and Jugaad illustrates different aspect on the topic. However, all these theories are highly relate to same definition of redesigning and developing both products and processes form scratch at minimum cost, addressing the region specific needs. In the study of Brem (2015), researcher evaluated that frugal innovation are good enough for the affordable products that focuses on meeting needs of resource constrained customers. It is because, frugal products with heavy resource constraints have extreme cost advantages compared to existing solutions and are much simpler and cheaper with limited features (Nowicka-Skowron and Radu, 2014). Further in the study author distinguish between frugal and reverse innovation:
- It mainly focuses on designing solutions specifically for low income market segment.
- On the other hand, reverse innovation involves new products developed in emerging markets which are then modified for the sale in developed markets.
Plantes (2013) proposed that, new products and services are developed to enhance the skills and abilities of people that they posses before or encourage them to do those things which they couldn't execute before. This is one of the major benefit that innovation provides to individual and organisation as whole. But contrary to this Koetzier and Alon (2014) stated that, innovation also carry certain risks. The amount of risky an innovation can be entirely depends upon the choices people make in using it. However, focusing on this type of innovation means delivering products and services to market quickly and without any flaws (Koetzier and Alon, 2014). Senior management of companies are focusing undertaking appropriate strategies and tactics in order to ensure that products and services can be offered in market appropriately as well as encouraging people to buy. Contradicting to this fact Chesbrough (2011) defines that, innovation is not working out the way many companies expected. Despite increasing commitment, funding and organisational accountability there are various companies that are disappointed by the return that they achieve from the investments. Supporting to this fact Eagar (2015) states that, long term success is highly dependent upon the ability of company in innovating its products and services but for that it is also important for an organisation to make sure that all the individuals associated with it are also ready to indulge innovation for attaining competitive advantage.
In case of integrated innovation Bowers and Khorakian (2014) explains that taking traditional innovation approaches from new product development such as portfolio optimization, ideas management and stage-gates and applying them across the whole value chain of the business enterprise (Bowers and Khorakian, 2014). Further author states that, an integrated approach to managing the innovation process is highly attractive and encouraging to the some of the organisations for various reasons. These reasons are like combining resources across different functional divisions, more radical innovation, scope of improvement in the application of formal innovation etc.
In the present research report investigator is focusing on evaluating the future of innovation management. However, by the article of Rick Eagar there are five key steps for future success that needs to be followed by firm in order to attain future growth and success. In this researcher will concentrate on the recent research made by Arthur D. Little that had surveyed the perception and opinions of global Chief Technology Officers and Chief Information officers (Eagar, 2015). However, through the help of help of this article Rick Eagar spread the five key steps that companies need to focus on in order to bring innovation and attaining future success. These are customer based innovation, proactive business model innovation, frugal innovation, high speed / low risk innovation and integrated innovation.
As per the study of Eagar (2015), Looking at the present situation of market it is essential for companies to bring innovation and manage it properly in terms of attaining future sustainability. However, he stated that customer base innovation is all about identifying or evaluating new and more profound ways to engage with existing base of customers so that their needs and wants can be satisfied. According to him it is important for companies to bring innovation within products as per the needs and wants of customers so that they can generate higher revenues and increase profitability margin in coming years (Brexendorf, Bayus and Keller, 2015). However, there are several authors and scholars who are agreeing to this fact that companies in the present corporate market needs to bring customer centric innovation to deliver what the actual need of consumer. Further, Eagar in his article proposed that there three key trends that can drive customer base innovation strongly such as: Total customer experience, design in emotional aspects and social networking. However, as per his article total customer experience is driven by a desire of building close and deeper relationship with the customers by providing them better services and making them feel about the importance of innovation. From this approach researcher evaluated that companies operating in high or intense competitive market needs to follow such approach as it will boast the experience level of customers and will encourage them to remain loyal towards business functioning (Goetsch and Davis, 2014). Secondly Eagar proposed that design in emotional aspects is the emerging trend as technology allows manufacturers to deliver more and more features that typical consumer can use in order to attain competitive edge. From this investigator evaluates that companies in coming 10 years would rather compete on more features and functions but manufacturers will focus on style, design and emotional connection etc. Thirdly, social networking at present has become the most feasible and suitable means of marketing and promoting platform where companies are can target large audience in ease. This will be used as the basic tool and technique in regards to understand the needs and wants of customers so that firms can offer products accordingly.
By the means of above study made by Eagar it can be evaluated that bringing innovation and creativity within the approach will ensure better results in future. However, it is the duty of management of companies to make sure that all the aspects and factors are being considered while bringing innovation within business activities so to generate desired results and outcomes (Slater, Mohr and Sengupta, 2014). Researcher through this article understood that innovation means a lot to the companies in present market. Various authors illustrated that by bringing innovation as the customer needs will make company become more flexible and creative in interacting with customers as well as providing them appropriate platform to provide feedback on quality and quantity of products and services. Furthermore, in near future companies will become much more sophisticated with this approach as they will only focus on what customer wants and accordingly bringing innovation within goods.
In addition to above study, Eagar second key to future success in innovation management is proactive business model innovation. According to him, a business model defined how to create and capture value within a value chain, by undertaking both operations and strategies (de Araújo Burcharth, Knudsen and Søndergaard, 2014). Further he illustrates in the article that business model is not a new concept but still there is wide room of improvement can be done to generate desired results and outcomes. There are three key trends in a successful business model innovation in the future that are: deliver thick value, use modular methods to cope with complexity and adapt business model to new markets.
First and foremost, companies need to focus on creating better value for its customers and stakeholders. Nowadays, people invest in products and services of companies to generate best possible outcomes. Therefore, it is major element that needs to be given priority in context to target audience so that their needs and wants can be satisfied (Nowicka-Skowron and Radu, 2014). Companies’ approaches to defining value have been too narrow. Companies need to think about how to partner in new ways with others to create and capture more value. However. Business model innovation embraces various types of modifications to an existing business model. These changes or modifications can be proactive or forced by competitors.
As per the study of Eagar (2015), Frugal innovation can be defined as reverse innovation which majorly focuses on originating and developing innovations in lower income, emerging markets and taking low class people as the starting point and then developing at product. This approach of author is just opposite of traditional innovation approach which assist in providing higher value. On the other hand, various authors supporting to the facts of Eagar in this article as they illustrated that frugal innovation is all about rethinking of the nature of innovation (Nagano, Stefanovitz and Vick, 2014). However, researcher evaluated from the perspectives of various scholars that frugal innovation concentrates on less rather than more by undertaking clever technology to create masterpieces such as mobile phones, computers, cars and economic services etc.
Along with this, author proposed that there is certain amount of risk associated with any kind of innovation. However, it is important for senior managers of firm to ensure that they are evaluating each and every aspect of business enterprise in order to minimize risks and uncertainties. Global 24/7 products and services development will encourage companies to operate at large level and generate better revenues and profits (Afuah, 2003). However, companies at global level will support the development on the basis of different cultures and perspectives that are incorporated within one product to satisfy needs and wants of different customers. innovation is not working out the way many companies expected. Despite increasing commitment, funding and organisational accountability there are various companies that are disappointed by the return that they achieve from the investments. Lastly, Eagar provided detailed information on integrated innovation which will lead companies to bring or develop new products by the means of idea management, stage gates and portfolio optimization and applying them constantly as an integral part of strategic approach used by companies. By the means of this innovation author expect that businesses will increasingly need to focus on more radical innovation in order to remain ahead of the pack.
There are several trends that can be seen in coming years in order to innovate products and services are as follows:
New technology based business development and venturing: In order to bring innovation this means will require more efforts from the companies as they will strive to attain growth and creates better competitive edge within the target market through developing new products and services for new business areas.
Innovation process management: In coming years, companies have to identify and evaluate different ways to managing and controlling their respective innovation procedures (Brexendorf, Bayus and Keller, 2015). However, the new procedures should be highly linked with customers so that their taste and preferences can be understood and accordingly company can offer products and services to attain competitive edge.
Knowledge management: Having appropriate knowledge about market will lead companies to execute their business activities in effective and efficient manner. Furthermore, businesses have to include external source which will ensure them in carrying out business operation suitable and it is going to be most crucial aspect in coming years.
CONCLUSION AND FINDINGS
In conclusion to the above report it can be evaluated that, innovation is becoming one of the crucial aspects for the businesses operating in existing market. However, in coming next decade it will be the base of carrying out each and every activity in highly competitive corporate market. However, author in the study entailed different views about importance of innovation management for attaining future success. In this article author has focused on five key steps that for sure will lead to attain future success for the company. These innovation management concept consist of customer based innovation, proactive business model innovation, Frugal Innovation, High speed/ low risk innovation and integrated innovation. However, it is the duty of management of companies to make sure that all the aspects and factors are being considered while bringing innovation within business activities so to generate desired results and outcomes. Looking at the present corporate conditions it can be stated that innovation in products and procedure has become necessity as customers or target audience have changed their taste and preference as per the change in trends and environment. It is essential for companies to remain innovative and for that they need to focus on developing new products and services at constant basis.
From the above entire study it has been found out that, companies that want to remain ahead in against to its competitors in innovation management should concentrate on the emerging trends which discussed in the report above. However, these five key elements will assist company in satisfying needs and wants of customers in different manner as well as systematically. By the means of this researcher understood that companies has to use different methods for different purpose as from one approach it is not possible to achieve best possible outcomes in each and every sector or department.
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- Bowers, J. and Khorakian, A., 2014. Integrating risk management in the innovation project. European Journal of innovation management. 17(1).
- Brexendorf, T. O., Bayus, B. and Keller, K. L., 2015. Understanding the interplay between brand and innovation management: findings and future research directions. Journal of the Academy of Marketing Science.
- de Araújo Burcharth, A. L., Knudsen, M. P. and Søndergaard, H. A., 2014. Neither invented nor shared here: The impact and management of attitudes for the adoption of open innovation practices. Technovation. 34(3).
- Drucker, P., 2014. Innovation and entrepreneurship. Routledge.