Innovation isn’t hard—everyone has ideas!
I’m convinced that all persons, free of external (or internal) criticism, will come up with something for any problem. Written right into our souls is the desire to imitate the creator in His continuing act of creation in our own ordinary ways, including and especially through human innovation. That is how we got from carving stone tools to asking ChatGPT to write our essays.
The infinite monkey theorem holds that an infinite number of monkeys with an infinite number of time writers, given an infinite amount of time, would come up with the full works of Shakespeare. We are not monkeys—we have that much going for us—but we do not, in fact, possess an infinite amount of time (nor typewriters). Making the most of innovative nature must therefore include not just how might we teach persons to think of innovative solutions, but how might we manage innovation such that the best ideas are developed despite finite resources. This is where innovation management enters. There are several established innovation management methods that organizations can employ to foster creativity, streamline processes, and maximize the impact of new ideas. Let’s explore some of these key methods and how they contribute to successful innovation.
Open Innovation
The most direct way to encourage creativity in innovation is to give people a platform to innovate through open innovation. There are many ways to implement open innovation, but the two major ways are internal and external. Internal open innovation, such as Adobe’s Kickbox program, empowers teams within the organization to try new things by providing them with the time and funding to do so. External open innovation, on the other hand, is to draw from creative minds outside the organization—this ranges from crowdsourcing ideas such as when Lego commissioned fans to design a new Lego set, to full-on venture capital initiatives to partner with innovative startups.
Both forms of open innovation answer the _“how might we manage innovation such that the best ideas are developed despite finite resources” _question—internal open innovation is better when the finite resource in question is money, since such initiatives come at a low cost through employees already paid for. External open innovation, on the other hand, is better when the finite resource in question is time and management flexibility since these are now outsourced to others. External open innovation is usually also very public and could, therefore, be good for a firm’s public image. Thus, internal innovation may be better suited to smaller firms where cash is an issue, while external open innovation may be better suited to large firms where flexibility is an issue. However, both will benefit from either.
Blue Ocean Strategy
Once we’ve started to open innovation and give it to the people so to speak, a good measure for which innovations are worth funding past the preliminary stages is to think about whether it serves customers in a blue ocean or a red ocean. A blue ocean is a market with untapped demand. This contrasts with a red ocean, where industries are well-defined, and companies compete fiercely over existing demand. One practical application of this strategy is to look for ways to eliminate factors that the industry competes on, reduce factors that have been taken for granted, raise factors above the industry standard, and create factors that the industry has never offered. This approach helps to systematically and creatively build new market spaces that are ripe for innovation. This once again answers the “how might we” question by giving a measure for which ideas are the best ideas.
Blue Ocean Strategy is ideal for competing in stale red oceans to break into new markets. Of course, blue ocean strategies won’t work if they are not aligned with the organization’s broader strategic goals and capabilities. This is where the concept of dual transformation becomes critical.
Dual Transformation
Dual transformation involves simultaneously transforming the core business to be more efficient and competitive (Transformation A) while creating a separate, disruptive arm to drive future growth (Transformation B). This approach ensures that while the organization is exploring new blue oceans, it also continues to strengthen and evolve its existing operations.
Bringing it back to the question of “how we might manage innovation such that the best ideas are developed despite finite resources”, dual transformation makes the finite resources side of the equation larger by giving good attention to the core business. Dual transformation is therefore especially great for companies that already have a strong core business and are looking to branch out and adapt.
Business Model Canvas
To practically implement these strategies and ensure they are financially viable, organizations can use the Business Model Canvas. This tool helps to map out the essential components of a business, including value propositions, customer segments, channels, customer relationships, revenue streams, key activities, key resources, key partnerships, and cost structure. By using the Business Model Canvas, organizations can systematically ensure that each innovative idea is not only creative and novel but also financially viable and aligned with strategic goals. This approach once again ties back to the initial question of how we might manage innovation to develop the best ideas despite finite resources, ensuring that innovations are both impactful and sustainable.
Innovation Management
Managing innovation to make the most of employees’ skills and natural human creativity means giving them direction through deliberate and mindful innovation management strategy. Open innovation taps into both internal and external creative potentials, while blue ocean strategies help identify and develop the most promising ideas. Dual transformation ensures that organizations can pursue new opportunities without neglecting their core business, and the Business Model Canvas provides a practical framework to bring innovative ideas to market effectively. By integrating these approaches, organizations can manage innovation in a way that maximizes resources, fosters continuous growth, and sustains long-term success.