“Management of the process of creating innovation within an organisation.” That is the definition of innovation management in the words of Jan van den Ende. He is one of the world’s most distinguished business experts in this field. He is professor of management of technology and innovation at the Rotterdam School of Management (RSM), part of the Erasmus University in The Netherlands. His book ‘Innovation Management‘ came out this week in English, published by Red Globe Press. The work offers a contemporary overview of all aspects of innovation management.
Your book is a handbook for innovation management. In which respects does the book stand out?
Most handbooks on the subject are already slightly older and, at most, are supplemented with a new paragraph whenever a new edition is published. My book has an integrated approach, in which I discuss new innovative concepts, such as design thinking, disruptive innovation, lean innovation and open innovation. I also outline how these methods perform under a variety of circumstances. What’s more, the book addresses both the project level and the business organisation level, whereas other books often only deal with one of those two levels.
You are not the first to talk about design thinking.
That’s true. Design thinking is hip, the method is almost over-the-top popular. There is also a reason for this. After all, how was it done in the past? Companies translated an innovative idea into a program made up of a set of standards, and developed a new product or service. It could very well happen that the product or service did not quite fit in with the market until the test phase. Design thinking saves mangers from spending unnecessary time and resources.
Still, do you think design thinking is a bit over-hyped?
Design thinking is definitely a useful approach, but you can’t just apply it to every product or service. It is not suitable for every context. It would be better to have a more nuanced view of it. That’s not something you hear enough about. In my book, I analyse the pros and cons of design thinking. For starters, design thinking focuses on a certain customer group, but the question remains: Which customer group should you opt for? Not much attention is paid to that.
Design thinking goes hand in hand with lean innovation, i.e. getting innovation up and running with fewer resources. Is ‘lean’ really the method to adopt?
Lean innovation certainly has a future. Its aim is to minimise the degree of uncertainty through small-scale experimentation with ‘minimal viable products‘, rather than setting up mega-projects that are invariably likely to fail with all the associated consequences.
Are there any downsides to lean innovation?
It is generally thought that lean works best in turbulent environments. But that is debatable. In lean innovation, a concept is immediately floated on the market. Based on the market’s response, the concept is adapted and then brought out into the open again in a test environment. This enables you to continue to build on the original idea. In turbulent environments, it can be better to try out very different ideas. And sometimes lean doesn’t make sense either way. Complex organisations don’t readily go for lean. You do not design an aircraft or a harbour crane using a ‘minimal viable product’.
Has lean innovation superseded the concept of open innovation?
‘Open’ is past its prime. Nevertheless, the method whereby companies exchange innovative ideas with others is still relevant. At one time, ‘open’ was seen as the solution to everything; whereas nowadays, it is viewed more critically and more judiciously. One of the problems with open collaboration between an established company and a start-up, for example, is that both have totally different goals.
The well-established company works according to slow processes and prefers to have the start-up work exclusively for it. The idea here is that you do not invest in such a newly-founded company if the start-up is then going to share the innovation with others. This is often not an option for the start-up, given that it wants to build up a large customer base. A solution could be to grant exclusivity for a temporary period.
Is there actually a certain cautiousness to team up with start-ups?
In a sense, yes. The current trend is that well-established companies prefer to look for innovativeness in scale-ups. This is also due to the fact that companies often have no incentive to get involved in a project whose results will only be visible years later.
At present, a great deal of attention is being given to a specific form of open innovation: Ecosystem innovation. This involves products or services that require the input of several companies. An electric car needs batteries, charging stations and an electrical infrastructure. Mobile phones would be worth far less without apps. The innovator of these kinds of products or services needs to get other parties on board with their innovation. The question is, what methods are out there to make that happen?
What do you say to companies that are wary of innovating?
Then I would say look at formerly well-established companies such as Nokia and Kodak. They missed the boat at a time when an innovative shift was taking place. Kodak had the innovation of digital photography, but did not bring this technology to market for fear of ruining its existing core business. And Nokia was initially the market leader in smartphones but failed to invest enough in the product. Sometimes companies have to cannibalize their own business model in order to move forward. That, of course, feels really uncomfortable.
What kind of challenges does innovation management face?
There are plenty of them. Companies struggle to put new methods into practice. And those methods also raise new questions. One example is that lean innovation will have repercussions on portfolio management. If these lean projects consist of constantly changing objectives, you also get a different kind of portfolio management. Where once you had a number of projects with defined objectives, you now have projects that tend to jump from one side to the other. So the question is: How can portfolio management be set up to deal with the flexibility of lean projects?
Does servitization also have a future?
Another challenge for many companies is indeed servitisation: How am I going to deliver my product more as a service to the customer? Rolls Royce rents aircraft engines to airlines per hour of use. Rolls Royce itself remains the owner and is responsible for maintenance. Through ICT, a manufacturer is able to continue to monitor the use of their product and provide their customers with services. As a result, they also gain a much more permanent contact with their customers. But how do you go about this, and what does it mean for your business?
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