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A strategic, proactive approach to innovation management is crucial to a company’s success.
A strategic, proactive approach to innovation management is crucial to a company’s success. Innovation is the engine that drives growth and needs to be lead from the top of the management tree downwards.
Innovation governance refers to a holistic approach to guiding and sustaining innovation, and is a vital part of business management. It’s effectively a set of mechanisms that align a company’s resources, goals and objectives with each internal department, and also with external parties.
Regardless of what industry an organisation is in, or how big it is, innovation pushes growth by bringing ideas to life.
With technology (and customer demands) continuously evolving, businesses are forced to take action and innovate simply to stay competitive.
The result of this is that those with the most comprehensive strategies for managing innovation are likely to do well over those that don’t.
For smaller companies, managing innovation can perhaps be fairly straightforward, but for very large conglomerates it’s going to be more complex. Rigid sets of rules are much less likely to be transferable across all the different sections, leading to a more chaotic innovation style.
With such a large number of employees, it may also be difficult to engage with them successfully and instil a culture that welcomes innovation as second nature.
In terms of innovation governance itself, it’s also crucial to contextualise governance tactics. However, this can only be achieved after the underlying principles are agreed upon.
This universality of innovation principles makes them the ideal base from which companies can tailor their approach to suit. Additionally, when considering innovation governance, management need to be absolutely clear in their mission to achieve company innovation across all areas, not just in products and technologies.
Furthermore, managers should remind their different teams that combined, mutually-reinforced innovation is far preferable, and more advantageous, than a siloed approach.
Teams need to be actively involved in an integrative innovation process right from the design stage through to testing and marketing.
There are six key elements of innovation governance which are well worth noting. They are:
At the heart of innovation governance is the clear message that innovation is critical to the company’s continued success. The vision should include specifics about what types of innovative projects will be prioritised and what the objectives of them are.
Innovation structures need to include specific elements like processes and platforms. However they can also be about small-scale team dynamics across the organisation and beyond, and at individual job level.
This may include formalisation of processes, decentralisation and how external collaborations will function for maximum value for instance.
As we know, innovation is vital to a company’s long term success, which makes developing the capabilities required all the more important.
Management need to be clear about where resource and capacity issue lie, for example any lack of warehousing space or manufacturing infrastructure that needs to be addressed. Other critical issues may be around sourcing the right staff in the right numbers, or about the investment in new technologies.
As innovation usually involves some form of risk, it’s important to ascertain how these risks balance against the potential rewards. Risks must be set against the company’s ambitions, and how well it could tolerate any failures by way of finances, culture and reputation.
The real value of innovation governance will only be unleashed if it is communicated well to all the parties involved. High-level innovation governance strategies need to be conveyed to all staff and stakeholders in the organisation so they can readily understand what the company is trying to achieve through its innovative endeavours.
Effective communication will also build trust and transparency, which is crucial to company cohesion.
To innovate effectively, you need the right people, the right resources and the right financing. Portfolio management is a key innovation capability, allowing for the effective management of different project scopes, objectives and timeframes.
The good news is that UK companies are able to claim tax relief to help with the costs of their R&D projects - regardless of size or sector. How? By claiming R&D Tax Credits.
The scheme is designed to boost innovation by supporting companies that are working to overcome specific scientific or technological uncertainties. This could be through the creation of a new product, service or process, or by substantially improving an existing one.
For companies that make a profit, the benefit is offered as a reduction in Corporation Tax, whilst loss-making companies can receive it as a cash lump sum instead.
All UK companies can claim R&D Tax Credits, but how much they’ll receive depends on if they use the SME branch of the scheme or RDEC. SMEs can typically claim as much as 33 pence in every £1 of R&D expenditure, whilst those claiming under the less generous RDEC scheme can be awarded 10% of R&D costs.
If you can answer yes to any or all of these then R&D Tax Credits may well be on the cards - as long as you put together a comprehensive claim of course.
A big part of the R&D Tax Credits application is knowing which costs you’re allowed to claim for. They include:
If you would like any advice about claiming R&D Tax Credits our specialist team are here to help. Call us on 0207 118 6045 or use our contact form - you may be surprised at what you can claim.