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Trends in innovation management

In a recently published article in InnovationManagement Georges Haour, Professor of Innovation and Technology Management at IMD, states two major trends in innovation management.

Innovation ecosystems

First, companies must deal with more and more external inputs. By being aware of and accessing what universities, SMEs or start-ups can offer to complement their own internal capabilities, companies are in a much better position to develop and sell “high impact offerings”, very differentiated, to the market.

Innovation in the Asian style

India and China are becoming real sources of innovation in business practices and models. Western companies must make the effort to learn from what is happening in these countries – and others, not only in terms of technical developments, but also for new business models, practices and novel approaches.

In my discussions with innovation leaders from top companies frequently three more themes are on the agenda:

Networked and borderless innovation

Large companies are setting up their internal expert networks. In these networks, experts from other business units of the same firm may help you solving your business challenge. The profiles used in these expert networks usually already have some sort of expertise tagging – So if your company runs its own closed proprietary innovation network (some sort of semi-open innovation) the next natural step would be to come up with a “Facebook of Innovation” which helps you in configuring in a very agile way the set of experts needed for solving particular innovation challenges. To size this trend: In consequence the Deutsche Bank Research expects that in 2020 15% of the economic value creation in Germany will be produced by networks of companies, rather than by individual firms. The figure in 2007 was 2% and the Deutsche Bank Research predicts a rapid increase of networked innovation.

Intra-company crowdsourcing

Crowdsourcing and consumer co-creation have been established forms of Open Innovation, outside in. It is interesting to see that large companies are deploying crowdsourcing tools, methods and culture within the company boundaries. They are running idea contests as a starter and continue to use these platforms for coming up with new product ideas or even – as one German car manufacturer does – to discuss and refine business model innovations

Taking care of leap-frog innovations

Almost all large companies these days have fine-tuned systems for managing the innovation funnel in place comprising portfolios, innovation controlling mechanisms, Stage Gate processes etc. Yet still the vast majority of Top Managers from these companies is noticing that there are predominantly only marginal innovations leaving the funnel. Their conclusion is that most of the innovation management systems that are in use today are designed for weeding out false-positives and ideas/ concepts that have a calculable risk profile, As a consequence, most of the breakthrough innovations never make it through the innovation funnel. To allow for leap-frog innovations, more and more companies are setting up structures and processes for leap-frog innovations that are consciously separated from the daily innovation business. One example for this approach is BASF’s Future Business unit.