Effective Innovation Management

Effective Innovation Management

1. Why does Innovation matter?

   • Organisations differ widely, but we have learned over time about some of the factors which make for a more or less supporting context within which innovation can happen:

2. Leadership and Vision

   • Top management commitment associated with successful innovation, leadership about providing clear strategic direction and supplying vission to take org in new direction
     • Growth (concentration) - industry expert, Stability - cautious profit planner, growth (diversification) analytical portfolio manager, Retrenchment (save company) - turnaround specialist, retrenchment (close company) - pro liquidator
   • Managers should match people with jobs that play to their expertise and their skills in creative thinking, igniting intrinsic motivation Amabile (1998)

3. Organisational Structure

   • Concern that in an ageing structure, culture and processes may be such that they prevent the strategy from being executed properly
     • Core competencies become core rigidities, no longer able to adapt to changing conditions
   • firms becoming less centralised with greater use of cross-functional work teams
   • Matrix Structure Organisation
     • Teams of people created from various sections of the business, for the purposes of a specific project, led by a project manager
       • Often the team only exists for the duration of the project and matrix structures are usually deployed to develop new products and services
         • Example: national football teams made up of footballers of the same nationality, from different teams, for the purpose of the football world cup
           • Individuals can be chosen according to the needs of the project
             • The use of a project team which is dynamic and able to view problems in a different way as specialists have been brought together in anew environment
               • Matrix structures provide a way to use the expertise of people from various backgrounds for a specific task
           • A conflict of loyalty between line managers and project managers over the allocation of resources
             • If teams have a lot of independence they can be difficult to monitor
               • Cost can be increased if more managers are created through the use of project teams
                 • Can be a challenge as the members of the matrix team do not usually work together and it could take them time to work together effectively
   • Network Structure
     • Non structure: elimination of in-house business functions
       • Distributed nework: offers the besst chance of quickly solving problems
         • Virtual organisation: useful in unstable environments where ther is need for inno and quick response
   • Cellular Structire
     • Self-Managing teams
       • Autonomous business units
   • Organisational Design: should be determined by
     • The strategic importance of the new business to the corporation - top horizontal
     • The relatedness of the units operation to those of the corporation - right vertical

4. Training & Development

   • Characteristic of high performance organisations: the extent they commit to training and development
     • Strong relationship between investment on training anf innovation capability
       • Ability of the organisation to produce products and services with novelty in design, quality or performance largely depends on the knowledge skill level of the workforce
         • Training can help overcome resistance to change, a major component of this resistance is the sense innovation requires abilities or skills which the individual doesnt possess, training provides a powerful lubricant for oiling the wheels of innovation

5. Effective Team Working

   • Characteristics of high performance in project teams
     • Clearly defined tasks and objectives
       • Effective team leadership
         • Effective conflict resolution mechanisms within the group
           • Continuing liason with external organisations
             • Good balance of team roles and match to individual behavioural style

6. Creative Climate

   • Organisational structures are visible artefacts of what can be termed in an innovative cultlure
     • Can set conditions within the organisation with which accidental discoveries can take place by deploying our understanding of the creative process
       • Environmental macros that can contribute to stifling innovation
         • Poor lateral communications
         • Limited tools and resources
         • Reinforcing a culture of inferiority
         • Unfocused innovative activity
   • Building climate involves systematic development of organisational structures, policies and procedures, reward and recognition systems, training policy, accounting and measurement systems and deployment of strategy
   • organisations must look for ways to reward creative behaviour
   • Culture Compatibility
     • - Is the planned strategy compatible with the firm’s current culture? - Can the culture be easily modified to make it more compatible with new strategy? - Is management willing to make major organisational changes? - Is management committed to implementing strategy?
   • Dimensions of national culture
     • ‣ Power distance (PD) ‣ Uncertainty avoidance (UA) ‣ Individualism-collectivism (I-C) ‣ Masculinity-femininity (F-M) ‣ Long-term orientation (LT)
   • Hurley, and Knight (2004), a firm's capacity to innovate is among the most important factors that impact its performance