Innovation. Management Benchmark Study

jstengel — Mon, 26 Jan 2009 16:10:51 GMT

In the chapter, “Innovation,” Baker provides an overview of innovation research, definitions of the three main types of innovation (process, product/service, and strategy/business concept), the levels of innovation (incremental to radical), and capacities for innovation, which either enable or hinder organizations’ ability to embrace change. Process innovation involves an organization’s ability to respond to internal and external changes. Product service innovation concerns product and process innovation that occurs despite any evidence of necessity for change. Finally, strategy/business concept change attempts to radically and “proactively” respond to environmental and market demands with an eye to any future challenges before they exist.

The levels of innovation range from incremental change, which involves small adjustments to existing products and services as determined by internal or external forces, to radical innovation, which completely transforms either the marketplace or the economy by developing completely new products or services. Leveling provides a measure of the “newness” of innovations. As well as levels of innovation, Baker considers the impact of innovation. Impact can be measured, according to Christensen (1997), as either sustaining or discontinuous.

Baker identifies the drivers of innovation. They include:

Financial pressures
Competition
Shelf life of a product or service
Changes in values
Regulations
The need for sustainable development
Accountability
Social consciousness
Demographics
Rising expectations
New technologies
Shifting economies

Factors which can present obstacles to innovation include the following:

Individuals
The project itself
The organization
The environment

An organization’s ability to successfully transfer innovation depends on its absorptive capacity (Cohen and Levinthatl 1990). Absorptive capacity, or “organization as sponge explanation,” refers to the organization’s ability to absorb input and “squeeze out” results or outcomes (Fiol 1996). The impact of innovation is directly related to an organization’s ability to “absorb” new information and knowledge and, therefore, produce completely new ideas, services, or products.

Baker identifies four levels of innovative capacity: individual, project, organizational, and environmental. Citing Hamel (2000), Baker enumerates internal and external structures an organization must create in order to achieve innovation competency:

Have a fluid organizational boundaries and an open market for talent
Transform organizational strategy - - both from the top-down and from the bottom- up
Create an open market for capital investment and rewards
Manage the risk
Create a culture and a structure that promotes innovation

The author has developed a list of questions by which an organization or company can assess its innovativeness. This check list includes items covering the “newness” or originality of the innovation, the involvement of the workforce, external influences, the level of application, and the capacity of the organization for innovation.

Finally, Baker reinforces the theory that successful, transferable innovation needs to be understood from an organizational perspective and that “keeping up with innovations” is no longer enough to guarantee success. Organizations need to be innovation leaders from a structural standpoint, not only a project/product view.

Tools/Knowledge Objects/Resources/Contacts/Etc:

Resources: Biech, E. 1996. Creativity and Innovation: The ASTD Trainer’s Sourcebook. New York: MacGraw-Hill.
Christensen, C.M. 1997. The Innovator’s Dilemma. Boston: Harvard Business School Press.
Cohe, W.M. and D.A. Levinthal. 1990. “Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly 35:128-152.
Fiol, C. Marlene. 1996. “Squeezing Harder Doesn’t Always Work: Continuing the Search for Consistency in Innovation Research. Academy of Management Science 21(4):1012-1021.
Hamel, Gary. 2000. Leading the Revolution. Boston: Harvard Business School Press.

Citation

Baker, K. (2002). Innovation. Management Benchmark Study. Washington, D.C., Department of Energy Office of Science, Air University (USAF) 16.

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Innovation. Management Benchmark Study

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