Importance of Innovation Management

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Innovation plays an important role in an organization’s success. Market leaders derive a significant proportion of their income from new products, according to Forbes. Innovation can take the form of a major breakthrough or incremental improvements to existing products. Solid management can help organizations encourage and support innovation and realize the commercial benefits from it.

Stimulating Innovation

Organizations can encourage employees to innovate by allocating time and rewarding effort. "3M, the company that pioneered scotch tape and post-it notes, derives up to 30% of its revenue from products launched in the past 5 years," Forbes notes, adding that "employees are required to devote a fixed portion of their time to projects unrelated to their jobs." The highlights the important dual role that leaders play in stimulating and supporting innovation.

Providing Resources

Managers can support innovation and maintain its momentum by providing resources in the form of time, money and people. Organizations can promote an innovative idea with market potential by providing a budget for further development and allocating staff to a project team. Leaders can support the innovators by identifying team members who can bring a balanced perspective to the project, according to

Realigning the Organization

An innovative idea that becomes a new product may require significant organizational change to bring it to market, according to the website Innovation Excellence. An organization may require new suppliers to provide essential components for the new product. It may have to open new channels to market to reach a new customer base and it may have to develop new employee skills to support the product. Innovation management helps identify the essential organizational changes.

Commercializing the Product

An innovative product may not achieve commercial success without careful management. Forbes notes the example of PARC, Xerox’s research & development center, which developed important breakthroughs such as Ethernet networking technology and the graphical user interface but failed to commercialize them. Organizations must commit marketing resources to innovative products. "New products and services (especially disruptive ones), can require marketing to find and build relationships with completely different types of customers and/or require marketing to speak to customers in a different way or to reach them through different channels," says Innovation Excellence.