Professor Mathew (Mat) Hughes is Professor of Entrepreneurship and Innovation at the School of Business and Economics, Loughborough University. Professor Hughes is also the Co-founder and Co-director of the Centre for Corporate Entrepreneurship and Innovation. He previously held appointments as Reader in Entrepreneurial Management at Durham University, and Lecturer then Associate Professor of Entrepreneurship and Innovation at the University of Nottingham.
Professor of Entrepreneurship and Innovation
Loughborough University School of Business and Economics
Does corporate innovation need a methodology?
Does corporate innovation need a methodology? Yes, and emphatically so. There are four reasons why it is essential for organizations to have a methodology for corporate innovation.
The first is relatively simple insofar as without a methodology, corporate innovation is left to happenstance or random chance. The second reason is more a function of probability: left to its own devices, why might one organization innovate more than another? The organization that innovates more possesses a greater organizational readiness for innovation and has in place an internal environment that enables employees to innovate. Third, a methodology for corporate innovation is essential to ensure that the firm meets the objectives of its innovation strategy: be that to achieve incremental, stable, exploitative improvements in product-service quality, efficiency, functionality, and the like; or to achieve truly new breakthrough product-services through exploration, discovery, experimentation, and entrepreneurship. The fourth and final reason is to achieve a balance of both innovation strategies (explorative and exploitative) so that the firm renews its revenue streams while investing in the breakthroughs that will enrich its future. This is what has become known as ‘organizational ambidexterity’ .
It is now quite clear that organizational viability relies on the willing-ness and ability to innovate, so we cannot possibly feel satisfied if we leave corporate innovation to chance. To resolve this problem, managers must focus on three interrelated areas: senior management vision (and strategy), the structure of the organization, and how it measures and rewards performance. I will discuss each in turn.
A corporate vision and strategy for innovation. For managers to say “we want innovation” masks a series of nuances that matter for the ultimate outcome: the form of innovation itself. Not all innovations are equal. For instance, an exploitation-focused innovation strategy places emphasis on superior execution, refinement of a product or a service or the processes that underpin it, improved cost efficiency or quality, or the incremental addition of new features. Take for example a Samsung phone. Every new iteration brings incremental better software, better camera, a new feature or two, sharper screen, etc. This is an exploitation-focused innovation strategy. It’s safe, relatively low cost, will pacify and satisfy the majority of existing customers, and keeps competitors locked in an arms race for incrementally better devices. In other words, this strategy also compels rivals to play catch up [ ... ]
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