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As more and more curveballs are thrown at companies, from a global pandemic to a changing consumer base, business growth depends on innovation
As more and more curveballs are thrown at companies, from a global pandemic to a changing consumer base, business growth depends on innovation. To this end, universities now offer courses on innovation management and 2020 saw the launch of new quality standards for the implementation of innovation management. But what is it and how can your company maximise its results?
Managing a company’s approach to innovation goes further than an extra line in the company’s Mission Statement. In essence, it covers the entire process from idea generation to market launch, from an executive to intern level. Organisational, product and process innovation all fall under the umbrella of innovation management and can be seen within innovation management systems.
A business’s goals, long-term and short-term, will inform what processes are put in place to encourage and sustain innovation.
Bringing new ideas to market is the best way to keep your head above water. One of business’s most often repeated cautionary tales is that of Blockbuster, a giant brand with the resources to innovate but who missed out and was left in the dust of Netflix.
Keeping up with competitors and providing new and improved products will mark your company as one to watch; without innovation, you risk producing outdated products and creating an opening for competitors to snatch your share of the market.
Innovative companies are also very attractive to quality talent. The most entrepreneurial staff want to know that their company prioritises new ideas and development and that their ideas will be heard with sincerity. The company culture that comes with innovation management is appealing to the forward-thinking staff with the best new ideas.
The four pillars upon which innovation management rests are competency, structure, culture, and strategy. These four themes are present at every stage of innovation and keep a company organised around the principle of innovation.
Your company’s core competencies are the skills which sets your company apart from the rest. These could be internal or external-facing but must align with your market’s wants and needs. Your employees will obviously have their own personal skills, however it is helpful to distinguish where your company on the whole thrives. Taking a mix of internal skills and directing them towards a market solution and eventually, business growth, is where competencies fall into place in innovation management.
Your company’s systems and processes which form the organisational structure need to be rethought to be geared towards innovation. The capabilities of your staff mean very little if they are not utilised by the business. The right structure can streamline the innovation process towards success, as efficient operations and communication will remove the barriers to innovation and make sure no ideas slip through the cracks.
One of the most important pillars to sustain innovation is the company culture. Your staff may have great ideas, but without a team around them which encourages their growth and confidence, it’ll all be for nought. Redefining the way your staff look at their role in the company is crucial to ensuring business growth and maintaining your rockstar team. By promoting certain behaviours and discouraging others, you’ll have a much larger pool of resources to fall on when looking for innovation.
So, you have the skills, the structure, and the culture; now you need a goal. The three previous pillars support the overall strategy of the company, allowing you to look at long-term goals and organise the innovation strategy around them. As your strategy evolves, so too should your innovation management strategy, including resource allocation and priorities within the pillars.
Knowing the foundations of innovation management is the easy part; now comes putting your innovation management system in place. Evaluating your company’s pain points in the innovation process and rectifying them is a good place to start.
There are plenty of ways to encourage new ideas and build them to market-ready products and processes.
Opening your innovation channels to both internal and external sources is a way to create a larger flow of ideas and a bigger pool of experts to review and support great new ideas. Although there may be IP constraints, companies working in close proximity with academia, consortia or even some vendors may want to look outside their staff for inspiration. These external sources may simply provide problems for you to solve, but they could also become partners in the innovation process.
A lower barrier to innovation comes when you look at existing products and processes for opportunities for improvement. It’s a good place to start for companies without innovation management strategies in place, as your improvements often come to market more quickly without needing to reinvent the wheel. Where your structure or competencies aren’t yet aligned with innovation, and thus innovations are not monitored nor captured, incremental innovation can be a great place to rearrange your strategy.
High risk but high reward, market disruption has so many success stories that many companies are drawn to the idea. Although it requires much more work and a whole lot of faith in the process, your innovation can build into the new iPhone. By overturning an assumption about or of your market and providing a service or product for a problem that no one else was catering to, or even knew existed, you can position your innovation as a trailblazer. However, disruption requires a company centred around innovation, who knows how to develop new ideas and who has the stamina to get through it.
Building a strong company ethos which goes beyond the ‘About’ page on the website is all about empowering your staff to look beyond their roles towards the common goal of business growth. Valuing their input, making efforts to ask for feedback and implementing their contributions will ensure that next time someone has a great idea, they feel it’s worth mentioning. This can also come from an internal communication channel which allows for the crossing of ideas between departments which might not usually have reason to communicate. Likewise, treating failure as part of the process, or even as a good thing, will signal to your employees that innovation is a process, not a destination.
One of the most common pitfalls companies fall into is strategizing ‘top-down’ and treating innovation as a C-suite focus. Communication and respect across the entire company is the best way to capture all the beneficial input from all the staff. Fostering a culture of ongoing learning, within the business and outside, will give staff a greater wealth of experience to draw upon, which is the lifeblood of innovation.
Many employers see incentives as a quick way to put innovation at the top of the priority list across the board. A meritocratic approach, treating all ideas as equal to start and rewarding the idea which emerges from the innovation funnel, will enhance your company culture.
Having implemented an innovation management strategy, you need to track your progress to see what’s working and what isn’t. To start, keeping good records of the research and development (R&D) budget is good practice for reviewing your innovation management process and also when it comes to making R&D tax credit claims. Although it won’t tell you much about the results of your work, it will show you how your input connects with your output.
When it comes to tracking your work, your goals will inform the way you assess your success. If your goals are to create different products, then your KPIs will be different than if your company is looking to increase revenue from a single product or process.
There are plenty of other aids to innovation; when it comes to funding the results of your hard work in innovation management, there are plenty of options. Investment is often at the top of the list when companies consider their bottom line, however there are other routes to pursue. Grant funding is one way that companies can receive investment towards their R&D, especially for very innovative ideas. Innovate UK is the UK’s main grant funding stream, although there are also regional grant funding schemes available. In Europe, Horizon Europe offers another path to grant funding for research projects.
Research-based projects which are not suitable for these schemes can always look to the government-backed R&D tax credits scheme, which offers a tax credit of up to 33% on eligible expenditure for projects which are advancing science and technology.
Myriad Associates is a leading R&D tax specialist, with over twenty years’ experience in the field. If you have any questions about your eligibility for any of the schemes above, give our team a call on 0207 118 6045 or use our contact page for friendly, professional advice.
Please contact us to discuss how working with Myriad can maximise and secure R&D funding opportunities for your business.
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