Managing innovation and innovation managers

Dr. Boidurjo Rick Mukhopadhyay

(The author, international award-winning development and management economist, formerly a Gold Medalist in Economics at Gauhati University)

Dr B K Mukhopadhyay

(The author is a Professor of Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted at m.bibhas@gmail.com)

A Harvard study shows that changing customer needs and new demand patterns have made companies release 30,000 new products across certain sectors with a 95% failure rate in the market. The word and concept of innovation have become multi-facetted over the past decades. We have new measurement indexes, emerging comparative literature, competition between countries in regards to innovation development and absorption capabilities, amongst others. Within a firm that is in the innovation business, however, has certain prerequisites– for example, A) A culture of collaboration and constructive feedback process, B) An openness to hiring people with varied perspectives and ideas, and C) Having a robust system to recognise when a change takes place impacting different levels both within and outside a business organisation. At the same time, how would one identify whether there is sufficient time and space within the employees' workload model that allows developing an innovation that can come with true novelty? Does the allocated budget providing for the training and development of employees working for innovative firms go up or down over time (especially during crisis times)?

Managing innovation is not rocket science, particular because (and less understood also) it requires knowledge and expertise which are significantly different to standard management attributes and skillsets that are designed to help organizations stay stable, and be typically risk-averse. Studies show that effective innovation teams are composed of typically diverse backgrounds who are critical and analytical, besides the skillsets they also have access to the right networks that enable them to stay updated with new development in their field. And the firms that succeed in securing such teams usually offer a structured environment and an ability to make the most of the creative talent in a safe and supportive workspace where clear performance goals exist. Fundamentally, therefore, it is important for both the innovation agent and the innovation facilitator to learn how to build a bigger box/ knowledge container than going with the poorly defined cliché 'think outside the box.

Building these big 'boxes' – comprising experiences, skills, networks, and also academic knowledge – are safehouses and harder to build than said. It is important to have a team where one can nourish another, and restrain from developing 100 ideas that cannot ever be implemented; instead, work towards 'less is more' and doable ones. The role of innovation managers is key, and it takes time and commitment to know who the team members are rather than what they can do or deliver.

The role also requires some level of autonomy free from any micromanaging that gives space for the manager to think like an entrepreneur. These are important considerations because when we look at the full-length process of innovation, brainstorming and idea generation is only the very first step. This comes before the conflict starts to happen within and between teams, and a larger stakeholder engagement process begins.

There are strong linkages between the amount of time dedicated to innovation, provision of constructive and systematic feedback, and importantly - revenue growth. While innovation grows in a structured, supportive, and intellectually stimulating workplace, it also requires clear communication on measurement of success. Some ideas and constructs upon successful commercialisation might take years to bring revenue and take-off in the market, so it is essential that managers are not using similar parameters for all innovation stories.

A study suggests that organisations can tie innovation efforts to performance reviews to bring out the individual stories that could contribute to organisational knowledge building. For example, incremental innovation is good for innovation scores and also revenue growth, but relying too much on them and too frequently would risk achieving long-term innovation targets. Innovation managers know that the culture of such organisations is to understand the role of failure and slow yet incremental progress made over time. This could explain why most businesses define Netflix and Apple as success stories and not Blockbuster or US Steel.

At the core, it comes down to developing novel solutions to some critical problems. And these solutions when sustained over time needs careful management, which requires the right mix of competence, a well-devised and tested strategy. Equally important is the aspect of 'storytelling', for example, the electric vehicles market where it is primarily about the environment while also appealing to how we can act towards reducing our carbon footprints at an individual/ household level. So, on one hand, the role of the figurehead of a manager is to clearly identify what problem is the novel solution aims to solve and at the same time how a particular firm is best suited to provide it. It is, however, important to realize that it is not always so easy to define and offer solutions that appeal to both a bigger cause and the bottom line. Social innovation in particular often has such problems to address.

Preserving innovation during organizational changes

The culture of an organization goes through several shocks when innovative organisations, like any other business, go through mergers & acquisitions, restructuring, redundancies, expansion into new markets and industries. This is a time when senior leaders of firms are more invested in these strategic initiatives with little time to oversee the progress and outcome of innovation progress happening within the organisation. At the same time, due to the consequent uncertain and unstable times at the organisation, there may be HR and key players leaving the firm exploring opportunities elsewhere. This creates severe delays for existing and ongoing innovation projects. Besides the delay that could affect firms' both internal and external stakeholders, it also calls for new resources to hire new talent that may not be immediately available or suitable. Reorganisation of firms is an interesting and critical time for everybody involved and the future of business, but equally important is retaining key resources (human in this context, amongst others). The choice of the market is also important. For example, if one is in BRICs and in the tech industry, for example, the stiff competition for talent makes it non-feasible at times to secure the right person and also find ways they stay with the organization long enough to develop loyalty and a sense of belonging.

Enter project managers

The role of project leaders is necessary besides the senior leaders and innovation project managers. This is particularly important because firms managing big scale innovation projects need someone or a group of project managers to look after the operational aspects on a day-to-day basis and address resource needs providing robust tools and systems in place. Be it the development of a green project in real estate to electronic vehicle charging stations. This important layer of having a project manager in the team whose background expertise matches the core of innovation projects is often undermined, at the same time, there's a greater value when they can engage with the senior leaders thereby learning different parts of the firm and decision-making layers. Needless to say, effective cross-cultural skills and the ability to influence and negotiate come very handy as tools in building resilience and team building relationships that go a long way. To note also in this context, there are at times clashes between the innovation managers and project managers, and this is also when senior leaders having that familiarity with both the parties can come to assistance. When it comes to budget and its allocations from time to time during project development, the decision is then based very much on capability and not availability. For big corporations invested in innovation, bringing together the differentiated capabilities from around the planet and offering a space to build that further helps in the creation of distinct capabilities of the firms.

Cut to credits, developing a culture of innovation is as important as defining the role of innovation and where it fits within the corporate strategy based on the geopolitical and economic landscape along with the competitive environment in a given market. It is a collective exercise involving senior leaders, project managers, innovation team leaders, and the change agents to be able to share and reflect on the collective vision and goals. Managers need to clarify whether the said innovation in context is meant for sustaining the competitive position of the firm or to provide certain value addition to targeted groups. If the concept is defined too narrowly, executives often dismiss the ideas. However, if it has a long-term orientation with continuous value addition while also finding new sources of value, executives would be interested in knowing more about the process, offer the flexibility to allow innovation managers to recruit their teams, manage them, and most importantly execute the plans.