Innovation Insights: What are the Five Components of an Innovation Management System?
Oct 15, 2024
To simplify things for everyone, including your management team, colleagues, and employees, an organization’s innovation management system has five key components. Innovation Strategy is the first component and the foundation of an innovation management system.
Innovation Strategy… What is it exactly?
- It quantifies the objectives for innovation
- It defines the area of focus, and
- It specifies the implementation plan
It also eases decision-making regarding whether or not an innovation project is relevant to the organization, as it’s always the first criteria of any decision-making process; is it aligned with the strategy, or not.
Not having an innovation strategy weakens the rest of the system. It’s a fundamental starting point which most organizations come to realize when they’re looking to optimize their innovation management system. They eventually come to the conclusion that they’re missing a clear strategy and that it undermines the performance of the system’s remaining components.
The following four components of an innovation management system are directly impacted by the innovation strategy. They can be described as follows:
Once the innovation strategy is defined, the Front End of Innovation should be followed. Its goal is to identify innovation opportunities, generate ideas, and evaluate the initial feasibility of any innovative concept. An innovation opportunity can then be presented at the project portfolio review with sufficient data to decide whether or not the proposal is interesting to pursue.
As for portfolio management, the purpose of this component is to select the best project proposals based on the previously defined innovation strategy, while considering the organization’s development and launch capacity.
The innovation project portfolio review also has the role of maintaining a good balance between high and low-risk projects, with a central goal of maximizing the value of the investment in innovation activities.
Once the project is selected, and resources are allocated, the innovation project is transferred to the development phase. Ultimately, this is where the innovation is developed, tested, and validated with customers.
The last component of the innovation management system is the launch phase. It encompasses the commercial and operational launch. It’s also where innovation efforts start being monetized.
The strength of these five linear sequential components is that they are simple and easy-to-understand for the rest of the organization. The reality is that an innovation process is iterative, but let’s keep it linear to keep things simple.
Image Sources: Innovation Leaders Club
The Innovation Leaders Club is a private, elite club aiming at establishing productive interpersonal exchanges centered on sharing knowledge, experience, and best practices, about topics previously chosen by participants.
We have developed a 60-page visual guidebook on how to develop an innovation strategy. It is a fully illustrated step-by-step guide to building the foundation of an innovation system.
