Innovation Nowadays
Posted on April 28, 2024 by Martin Hahn, One of Thousands of Career Coaches on Noomii.
Innovation today is becoming more collaborative and technology-based. I will discuss how in this article.
Innovation and Collaboration.
Traditional new-product development tends to be inward-looking. Employees in R&D or new-product development think up and evaluate ideas for new products.
They may not check with customers and suppliers until it’s time to test-market the product. Managers are now moving away from that inward-looking model. Instead of just asking their customers, suppliers, and dealers for help in test-marketing new product ideas, they are tapping them as sources for new-product ideas. Kraft Foods Inc. recently launched a program to encourage unsolicited new-product-idea submissions from customers and others. Kraft’s CEO calls this “open innovation.” Other experts call it “collaborative new-product and process development” (NPPD) and “open market innovation.”
IBM speaks of creating “innovation ecosystems” comprised of solution providers, independent software developers, consultants, venture capitalists, academics, and industry thought leaders. 62 In any case, the main aim of collaboration is to tap the ideas of a wider community and thus to solicit more and better new product ideas.
Why Collaboration?
At Kraft and other firms, diminishing innovation prompted CEOs to look outside their companies for new ideas. For example, Kraft has its own research and development units for developing new products. However, the only big new product they’ve had in years was DiGiorno pizza.
A study by consultants Booz Allen Hamilton Inc. concluded that there was no relationship between a company’s growth rate and the amount it spent on research and development. Firms like Merck felt that their own R&D was becoming too insular, too Merck-oriented. The solution: Dr. Peter Kim, Merck’s new R&D head, hired many new outside scientists. He also instituted procedures that enable hundreds of independent, outside scientists to help Merck identify and develop new potential drugs.
Companies like Kraft and Merck use a variety of tools, often Internet-based, to make it easier to tap the ideas of outsiders, be they freelance scientists and inventors, customers, suppliers, universities, or others. As one example, links on Kraft’s corporate website now make it easier for outsiders to submit ideas online or via a toll-free telephone number.
Innovation and Learning
Tapping the ideas of people both inside and outside the firm requires that firms such as Kraft be good at learning or at learning what customers want, what competitors are doing, and which ideas one’s suppliers and employees believe might work and which to discard. As one expert said, An organization’s innovative potential is strongly influenced by its access to customer and competitor intelligence, by its awareness of its internal organizational and technological capabilities, and by its understanding of external demands posed by governmental policies, environmental regulations, laws, and socioeconomic trends. Progressive firms have recognized this and are implementing new organizational structures, communication technologies, and incentives systems in order to grow their collaborative potential in important areas.
Managers can take many steps to improve their companies’ abilities to learn. Many reduce the number of management layers in the chain of command. This way, the managers at the top are closer to the customers rather than isolated in their executive suites by layers of subordinates. Most also help their employees do a better job of gathering, analyzing, and communicating information about new-product ideas. For example, the firm might give repair people laptop computers and encourage them to share ideas for learning about and solving particular customer problems.
Using Information Technology for Innovation When a company embraces collaborative new-product development, it needs a way to link together and tap the input of many people. It wants input from independent experts like scientists who might be able to contribute. And it wants input from its own supply chain members such as its dealers, customers, and suppliers. Companies use information technology–based systems to enable this kind of collaboration. The basic idea is to allow ideas to flow freely among all the parties.
Companies are using a variety of information technology which is based on systems for enabling this kind of collaboration. A short list would include virtual PC-based video brainstorming sessions (among people in different locations), e-mail, request for assistance notices on bulletin boards, videoconferencing, and computer-aided design tools. The latter enable geographically dispersed employees to work in a virtual environment to collaboratively create and fine-tune new-product designs. Many companies use even more powerful tools like Procter & Gamble which uses information technology to facilitate collaborative innovation
Self-Organizing Intranet portals
Self-Organizing Intranet portals like P&G’s InnovationNet (which links its 18,000 innovators) can make it easy for subsets of these experts to self-organize. The portal enables them to identify like-minded colleagues and to share information about projects of mutual interest without centralized, detailed managerial guidance.
