MANAGEMENT AND CONTROL OF THE INNOVATION PROCESS
Innovation management can simply be defined as the management of all innovation process activities. In other words, it includes front-end and invention of thoughts, basic and applied research. Furthermore, innovation management is drawn in, in the market introduction not to mention, it includes every innovation support function, for instance, management of the human resource, finance and accounting all related to innovation activities. Innovation management process is abundantly characterized by a high degree of convolution simply because of reservations of the involved actors as well as vital issues. Subsequently, this explains why innovation management process creates high demands on social, practical and methodical capabilities of the management. Therefore, this paper aims at exploring the processes recommended for innovative firms and show what firms should do to encourage innovation. Again, it will explain what firms should do to avoid stifling innovation and show how they can maintain innovation as a core goal.
Processes Recommended For Innovative Firms
Consequently, there are two diverse approaches to implementing management control in the innovation process in the literature of innovation management. The first process involves a literature that postulates an approach whereby organic structures exist. Organic structures have been illustrated as droopily defined activities and responsibilities alongside the people that guide and direct their work (Ferguson, 2007). In this perception, controlling the innovation process is always limited to formation of human resourcefulness prerequisites that would be narrowed by dignified structures as along with rules. In this approach, researches have been noted to receive relatively complete action freedom not to mention that slight governance is carried out (Tidd & Bessant, 2014).
On another hand, diverse literature, which proposes the effectual management of the innovation process by the implementation of strong governance and control of performance, has been proposed (Ferguson, 2007). Concerning this approach, the processes are divided into sub-processes and even stages where control is exercised by a decision making that is formalized at the last part of every phase. Accordingly, these models depend on the fact that the innovation process remains to be a process that is manageable by the application of process management methodologies just like any other managerial process. Arguably, the most fashionable execution model of operational performance control has been noted to be the stage-gate product development system. It is a system whereby the gates stand for checkpoints for quality control whereby a set of quality criterion must be met before the innovation project passes to the next phase (Tidd & Bessant, 2014). Therefore, the use of check-lists force the project management alongside the committees involved to make either clear go or no-go decisions at distinct quality gates (Ferguson, 2007). As a result, the management of the innovation process will at all times require to find equilibrium between self-sufficiency and professionalism on one hand, along with controlling disciplines and process on the other hand.
What Firms Should Do To Encourage Innovation
Firstly, innovative firms should formulate strategic perspectives in order to achieve their diverse goals and objectives. In this sense, strategic management remains to be the firm’s attempt in analyzing its surroundings and its strengths and weaknesses, then consciously choosing the right path (Tidd & Bessant, 2014). In this path, the firm aims at building up its strengths alongside addressing its weaknesses. Consequently, in this perspective the strategic management encompasses three major segments including, planning, implementation and evaluation along with control.
Furthermore, innovation firms need to embrace the formation of strategic decisions. One of the key elements of decision making in any organization is finding out whether these processes are internally or externally focused. For instance, in a case where the firm has chosen to purchase technology, it has to focus on issues like technology integration and the nature of the firm that brought the technology. On the other hand, in a case whereby the focus is mainly on the technology creation, then it should show the manner by which the firm encourages innovation from the inside through structure and compensation turns out to be more significant (Ferguson, 2007).
What Firms Should Do To Avoid Stifling Innovation
There are diverse qualities that should be aimed at reducing the likelihood of causing financial system imbalances, which have the capability of causing instability, while improving financial systems’ resilience to external shocks (Ferguson, 2007). Thus, new financial products have been noted to ease better risk diversifications, more precise pricing as well as greater market liquidity. According to research, the emergence and development of derivatives has eased enhancements in allocating, diversifying together with risk management processes. In this sense, too, it has been proved that securitization presents similar reimbursements. Over the years, such security developments have been seen to enable banks and other financial institutions stabilize their productivity (Tidd & Bessant, 2014). In simple terms, by holding less loans and focusing mainly on stable fee-generating firms, these business firms have augmented their productivity along with making their profits more predictable. In addition, these new financial instruments provide innovative firms with diverse ways of managing key exposures to risks. Innovative firms have, therefore, to hedge themselves against fluctuations of currency.
How Firms can Maintain Innovation as a Core Goal
Innovation firms can apply several methods and approaches in maintaining innovation as their core goal. Some of the main ways of maintaining innovation include commitment in leadership and external engagement (Tidd & Bessant, 2014). In order to gain commitment, leaders have to connect with the groups that are outside of their firm’s boundaries, for example, non-governmental organizations or investors. On the other hand, the external engagement will always happen with this strong leadership commitment team, and with these two major elements, the firm will be able to start fashioning a new-fangled identity as a sustainable enterprise (Ferguson, 2007). Thus, this merger will lead to codification of the new identity where employee engagement remains to be key since any sustainable execution of a strategy will need behavioral change by the involved individuals.
As aforementioned, management of innovation process in a firm refers to the innovation management field. However, managers in different firms still have little knowledge concerning modern techniques and design tools applied in innovation processes’ creation and even concerning the possibility of their effective use of conditions involved in management and decision-making.
Ferguson, R. (2007). International Financial Stability Issue 9 of Geneva reports on the world economy, ISSN 1607-8616.London. Centre for Economic Policy Research.
Tidd, J. & Bessant, J. (2014). Strategic Innovation Management. New Jersey. Wiley.