Innovation Process Management, Steps and Risks
Published: 07 March, 2022
Table of Contents
What is the Innovation Process?
The innovation process is translating new or existing knowledge into marketable products, solutions, and services. Businesses, companies, brands, and organizations that pursue excellent/successful innovation projects have something definite that puts them ahead of others.
Innovation refers to introducing a new method of production, source of supply, market, new good, and organization in an industry. The most exciting thing about the innovation process is that it translates an idea into a successful concept, product, or service.
How to establish a reliable innovation process that produces desired outcomes? The UNITE Innovation Approach enables you to structure your innovation process, form valuable networks, and make the most of your intellectual property.
This blog article will explain the innovation process, innovation management process, and innovation process steps that can supercharge your organization for success.
Much more about the innovation process and other approaches to innovation you will find in our brand-new FREE book “HOW TO CREATE INNOVATION”. It includes comprehensive approaches with mindsets, structures, and strategies to innovate in less time, with fewer resources and more success. Register for the download now!
Innovation Process Benefits
The innovation process helps businesses to strategize, introduce new concepts, and business model innovation. Recognizing the criticality of managing the innovation process, Digital Leadership places a paramount focus on this aspect, fully acknowledging its importance for businesses. Our specialized domain lies in offering Innovation Consulting service, leveraging our expertise to effectively oversee and optimize the innovation process for companies, enabling them to seize emerging technology opportunities.
Here are some importance of the innovation process
If you’re a service provider, you might realize that your customers do not have a system of sharing their compliments, complaints, or opinions. Therefore, to solve the problem, you can decide to operate a virtual office where customers can access your services within a short time. Customers will be happy, as such your sales and revenue will increase.
Maximizing on Globalization
Businesses worldwide are becoming more interconnected, and greater opportunities and new markets are emerging every day. If your company hopes to tap into these new markets and leverage these new opportunities, you must adopt a unique innovation process that suits your business needs.
Adapting to Change
As we know, change is inevitable in our world today, and the only way for your business to thrive, and remain profitable and relevant is by innovation process. Therefore, when you develop an innovation culture in your business, you will remain relevant and stand out at all times.
Evolving Workplace Dynamics
The innovation process is critical to ensure the smooth running of every business since demographics in the workplace are constantly changing.
Customer preferences and tastes continue to change – an average customer has various products and services that appeal to him. Hence, every company must keep itself abreast of these evolving tastes and find new ways of satisfying them.
Facing Up the Competition
To retain your company’s relevance and competitive edge, you can stand out by having a unique business model that can make innovative and strategic moves and thus stand out above the rest.
Innovation Process Steps
The innovation process, i.e., phases of innovation, can be divided into five main steps. Each innovation process step has its features. The first two steps are more creative and less structured, while the last two are focused and process-oriented. The development of the individual steps depends more on the requirement of a company.
For instance, larger companies have a more intensive assessment of most decision-making stages at the idea generation step. Also, a technology-based company with complex products and services will require a more comprehensive production implementation. And service providers, on the other hand, have many requirements.
Step 1: Innovative Idea Generation
The innovation process begins with the search for innovative potentials and innovative idea generation that are subsequently evaluated, There are various ways and techniques to brainstorm and come up with innovative ideas,
Idea Generation Techniques:
- Creativity Techniques
- Design Thinking
An innovative potential is a newly discovered opportunity for innovation and can be a new technical solution, a possible new market, a problem with a customer, or an unfulfilled customer requirement, for more detailed information you can visit our article about customers jobs to be done.
There are different possibilities for tracking innovative idea potentials. Some require targeted search, which involves searching for innovation potentials based on derived search fields and innovation strategy. This can be achieved through idea generation contests, LEAD user workshops, or creativity workshops.
Step 2: Concept (Advocacy, screening, and experimentation)
After step 1 of the innovation process comes the phase of advocacy screening and experimentation. This involves extensive analysis to gather as much information as possible. It helps to evaluate the feasibility of a business idea with its potential problems and benefits. Hence decisions can be made about an idea’s future and potential. Companies looking to develop the best cultures, virtues, and practices can establish a few best practices for business growth.
The most important analysis, screening, and experimentation is that of the customer requirement. For example:
What are the customer’s needs?
Are there any unconscious or unfulfilled needs?
Which customer problems are predominant, and how can they be resolved?
The experimentation phase tests the sustainability of ideas generated from the idea generation phase for an organization’s growth. It helps new idea generation with the ideas gathered on the feasibility and results of the original idea. For instance, after Amazon tested its grocery delivery services in certain Seattle suburbs, it expanded to New York City, San Diego, and Los Angeles.
For instance, when Amazon tested its grocery delivery service in certain Seattle suburbs. After this, Amazon Fresh expanded to Los Angeles, San Diego, and New York City.
Step 3: Solution
The innovation process step 3 aims to develop a worthwhile and ready-to-use solution that can be brought to the market. Solutions are developed, prototypes built, and tests carried out. In addition to concept and lab tests, the tests also include market tests under real-life conditions to gain firsthand experience and comprehensive feedback.
Once the solution has reached maturity, it will then be released for implementation: commercialization and marketing. At the same time, the concepts for marketing and implementation are further adapted and developed.
Step 4: Commercialization and marketing
The commercialization step develops market value for an idea, product, or service by focusing on its impact. An important aspect of this step is establishing the given idea, product, or service specifications.
The commercialization stage involves bringing the product to potential customers. It also requires the physical availability of the product by the manufacturers. These include mass production, procurement, and logistics based on defined concepts.
Step 5: Diffusion and Implementation
Diffusion is the spread and acceptance of a company’s innovative idea. The diffusion and implementation step allows the organization to determine the next set of customer needs, Benchmarks, indicators for success metrics, and receiving feedback enables the organization to stimulate the innovation process.
Finding The Right Innovation Management Process For Your innovation project
Before finding out the right innovation management process for your innovation project, it is important to know exactly what the innovation management process means. An innovation management process is a systematic approach for generating, prioritizing, evaluating, and validating new ideas and putting them into practice.
Different companies rely on different processes to manage innovation, and this is why some companies are more successful than others. Moreover, innovation is only as successful as its process, and without a solid strategy behind one, it’s difficult to avoid frustration and chaos, so choosing the right innovation management process is mandatory for a successful innovation process,
A well-structured innovation management process guides you through the whole innovation process. It helps you to make better/well-informed decisions, enhance your efficiency, remove the bottlenecks, reduce risks and simplify complex processes.
Common Innovation Management Processes
All organizations leverage all types of innovation management processes for their growth. Choosing the right one depends on several factors, such as the nature of the business and the way it operates. The most common innovation management processes include:
Push vs. pull
The ‘Technology push’ models are the approaches where products and services are at the core of the innovation process. The push-based models involve technologically and internally oriented processes, while the pull-based models are more customer and market-based processes for managing innovation. The ‘market pull’ models are driven by external market forces and are designed to meet market demands.
Lean Startup Model
The lean startup model is a concept used in product and business development to assess market risks and customer demands.
The model focuses on finding customer needs and promoting speed and urgency in idea search to avoid spending too much on marketing strategies that do not target customer needs.
The Phase-Gate Process is the best process for product innovation. It is implemented by companies of all sizes and falls under the ‘technology push’ model. The Phase-Gate process is used for idea development to reduce project uncertainty and cycle time in developing new concepts.
Innovation Process Risks & Dangers
The process of innovation is praised for its many advantages which have defined the social and corporate cultures since the time of industrialization.
But, it doesn’t come without its dangers and risks as explained below.
1- Innovation Process Technological Failure
The greatest risk a company faces in the innovation Process is whether the concept or product can be successful when it’s launched on the market or if it will remain an unproven white elephant. To reduce this risk the business may conduct tests on a smaller size to assess its efficiency and more efficient testing through launching prototypes.
After the trial is completed and the results are recorded in the product, necessary adjustments can be made to avoid massive losses after the product has been made available for mass production.
2- Financial strain
In many cases, the innovation process faces the issue of draining the resources of the company since the return on investment is usually longer-term, as opposed to instant.
This can lead to the abandonment of the idea or product when it is deemed as not profitable. However, you must take a look at the anticipated profits and decide whether or not the idea is in line with the long-term objectives of the company.
3- Market Failure
For innovations that require the introduction of new technology or products into the marketplace “Radical Innovation”, it’s essential that the product is able to meet the tastes, needs, and preferences of customers.
If it is not, it will indicate that the demand for the product would be lower, making the product would not be viable commercially. To prevent this from happening you must conduct thorough and thorough market research prior to spending a small amount of money on the creation and manufacturing.
4- Capacity Lack of Implementation
This is a particular problem for startups that lack the financial and structural capabilities to launch the technology.
You may decide to seek out partners to help you with your areas of weakness and overcome the issue. It is essential that the partner shares in the mission of the idea to avoid conflicts of interest in the future.
5- Organizational risks
These are the dangers that arise when it comes to the structure and the running of the company once the innovation is launched.
For Example, The business might revert back to putting all its resources and resources on innovations at the expense of daily operations. A proper planning process and the distribution of resources should be managed by the top management to ensure that this does not occur.
6- Unpredictable Risks
These are the risks that could not have been anticipated and could be affected by external factors beyond the control of the company. These could include changes to policy or instability in the political system, whose impact is a ripple that can hinder the effectiveness of the innovation process. It is essential that the company has an emergency plan that protects it from such unpredicted events.
Although finding the right innovation management process for your business may seem challenging at first, the goal is to avoid following one approach too religiously. Rather, take out time to test the most promising processes and combine them with different characteristics that might be suitable for your business operations at the moment.
We believe you can easily figure out the innovation management process that works best for your business with the information we have shared in this post about the innovation process, innovation process steps, and innovation management process.
In addition to this view on the innovation process, we have a variety of other ground-breaking tools and models. Register for the pre-launch of our book “How to Create Innovation”.