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4 Vital Premises of Dual Innovation Management Systems
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Conventional Innovation Management is unable to sustain itself in the face of contemporary needs.
Dual Innovation has become a necessity for businesses to survive intense competition in today’s markets.
Innovation Management comprises of managing the whole process of an organization’s Innovation effort. Innovation Management process entails phases from conception through successful implementation, including making of choices, performing of actions, and exercises of contriving and executing an Innovation Strategy.
Organized and most modern Innovation Management necessitates a business to have 2 key capabilities:
- Discovering fresh offerings.
- Exploiting prevailing opportunities.
For such ambidexterity, organizations ought to have an Innovation Management Model that can aid them to Innovate more effectively and viably.
Viably effective Dual Innovation Management Systems in organizations are essentially contingent on following 4 vital premises—all of which can be thought of as required conditions:
- Balanced Portfolio Approach.
- Equal importance to Exploitation and Exploration.
- Separation of Exploitation and Exploration initiatives.
- Support by a proper Idea Management System.
Since effective Innovation Management also depends on added aspects, therefore these 4 are not final conditions.
Let us delve a little deeper into some of these conditions.
Balanced Portfolio Approach
Innovation Management takes an equalized portfolio approach. The whole Innovation portfolio can be bifurcated into Exploitation-focused and Exploration-focused Innovation ventures.
Exploitation-focused ventures pertain to operating core business by implementing and improving current Business Models or technological competences.
Exploration-focused ventures pertain to evolving prospective business by probing for new, and frequently disruptive, Business Models or technological competences.
Equal Importance to Exploitation and Exploration
Leading executives have to be completely on-board in assigning same level of importance to Exploitation and Exploration ventures as both are essential for a company to prosper tenably.
Full commitment of the top executives, particularly the CEO, is absolutely essential for Exploration ventures to succeed.
Complete understanding among executive management prior to committing efforts and resources into genuinely Explorative undertakings is vital for the success of Innovation endeavors.
On-boarding of top executives specifically infers getting enduring support and sufficient resources for Exploration initiatives.
Allocating the right share of resources among Exploitation and Exploration is contingent on the Business Strategy and situation of an enterprise, among other conditions. This should be the responsibility of the CEO.
Separation of Exploitation and Exploration Initiatives
Exploitation-focused and Exploration-focused ventures are set apart on the basis of organizational anchoring, governance, and funding perspectives.
Exploitation-focused ventures are tied to the operational business units.
Exploitation-focused ventures have to do with core Transformation, i.e., profoundly reshaping the way current business is carried out.
Innovation Governance is undertaken by Decision-making leaders of a business unit, while a dedicated Innovation Board acts as an accompanying setup.
Exploration-focused Innovation ventures are carried out by a devoted exploration unit. It is led by a “chief explorer” answering directly to the CEO.
Exploration-focused ventures have to do with Strategic Transformation, i.e., altering the way business is done.
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To be competitive and sustain growth, we need to constantly develop new products, services, processes, technologies, and business models. In other words, we need to constantly innovate.
Ironically, the more we grow, the harder it becomes to innovate. Large organizations tend to be far better executors than they are innovators. To effectively manage the Innovation process, we need to master both the art and science of Innovation. Only then can we leverage Innovation as a Competitive Advantage, instead of viewing Innovation as a potential disruptive threat.
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About Mark BridgesMark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of Business at the University of Chicago. You can connect with Mark on LinkedIn here.
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