12.6. SUMMARY

Innovation needs to be thoughtfully managed within organizations. This implies designing broad strategic objectives related to innovation, implementing processes to shepherd the generation and development of novel ideas, and insuring leaders create an environment that balances creativity and capturing value from creativity.

Innovation can focus on a number of dimensions; however, innovation based on research and development poses unique challenges given its inherent uncertainty, resistance to management, and often long term development. Strategic objectives related to technological innovation need to be tailored to the organization. Qualitative and quantitative objectives typically address the degree of innovation the organization wants to achieve, the types of innovation that are to be emphasized, the overall approach to the market, and the resource commitment the organization intends to make.

Making innovation operational requires that an innovation process be put into place and be widely communicated throughout the organization. The design of this process is important as it can influence the types of innovation—incremental or radical—that are pursued. Sequential models, which involve step by step review, are clear and systematic; they tend to favor incremental improvements on existing products. Iterative models are more organic and interdisciplinary throughout the life of a project; these are more appropriate for more radical innovation. A dual process allows an organization to pursue both types of innovation.

Roles for marketing staff members, types of market research, and input from customers will differ in important ways depending on the degrees of market and technical uncertainty. While marketing people take an active and directive role in cases where technical and market uncertainty are low, they need to serve as listeners initially and market creators in cases where technical and market uncertainty are high.

Creating an environment of sustainable innovation requires that leaders explicitly communicate support for the organization's innovation strategy, and ensure that the innovation process is open to the entire organization. Senior management should be well versed in the innovation process, and should consider becoming actively involved in the process by joining review teams, for example. Innovation should be rewarded, though rewards for incremental and radical innovation should differ. Finally, leaders can support innovation on an ongoing basis by hiring creative people and designing organizations around their needs, and by simply recognizing the creative contributions people make day to day.

Table 12.6 provides a list of ten dimensions that can be used to diagnose the strengths and weaknesses of an organization's environment for innovation, drawn from the information provided in this chapter.