Companies can no longer afford to innovate within their research and development teams. Startups are the main drivers of innovations across industries and their numbers are increasing exponentially. To tap into startup-driven innovation, more companies and large organizations are making open innovation a part of their innovation strategy. However, depending on their specific needs, they take different approaches to innovation management.
In this article, we take you through 5 top innovation management approaches. While these work great as standalone approaches, many companies combine two or more of these approaches in their innovation strategies.
Top Innovation Management Approaches
1. Business Model Innovation
Innovations need not be restricted to new products or services. Sometimes, new business models also disrupt markets. This approach centers business models at the heart of the innovation process. This includes both business models for emerging innovations as well as new business models for existing technologies.
A business model innovation approach delivers the following benefits:
- Optimizes business performance by identifying how new innovations impact various functions within a company.
- Improves success of new technologies by enhancing their value proposition by pairing them with suitable business models.
- Increases profits by identifying new revenue sources.
- Provides competitive advantage by expanding customer base and improving resilience during market cycles.
2. Customer-based Innovation
Customers now have more chances than ever before. Therefore, to build and sustain a competitive advantage, it is critical to involve customers in the innovation process. This innovation management approach emphasizes on building a customer-centric culture, allowing companies to address the unmet needs of existing customers as well as expand to new customer segments.
Advantages of a customer-based innovation approach include:
- Improves understanding of customer journey which, in turn, guides the development of new features and products.
- Increases customer satisfaction and retention as it centers the customers at all stages from design and sales to new product development.
- Improves operational efficiency, enabling companies to quickly adopt new business models and technologies.
- Identifies growth opportunities in new market and customer segments.
- Increases value proposition by offering existing features at lower rates as well as adding new features.
3. Frugal Innovation
Businesses today find themselves in a hypercompetitive and resource-constrained environment. Further, there is a growing need to adopt sustainable measures across industries. This management approach allows companies to thrive in the midst of these challenges.
Frugal innovation provides the following benefits:
- Improves resource utilization by reducing material use as well as creating new material loops.
- Increases productivity with horizontal thinking and simplification
- Accelerates adoption of sustainability as sustainable principles align well with frugality.
- Enables companies to expand to new markets with cost-competitive and high-quality products and services.
4. High Speed, Low Risk Innovation
Companies now face increasing pressure to reduce time to market (TTM). However, innovations that impact TTM require investments of time and resources and come with a risk. This innovation management approach balances speed with risk and addresses this conundrum.
Benefits of a high speed, low risk innovation approach include:
- Speeds up product development cycles, allowing companies to test multiple emerging technologies simultaneously.
- Lowers risk for both manufacturers and users by favoring gradual rollouts over major product launches.
- Increases profits by lengthening the duration of the competitive advantage.
5. Integrated Innovation
This innovation management approach couples innovation management with a company’s business processes. Doing this requires adopting principles of new product development, such as rapid prototyping, to the entire value chain.
Few benefits of an integrated innovation approach include:
- Improves productivity by identifying business process efficiencies as well as how emerging innovations address them.
- Discovers emerging trends across technology and customer segments and equips companies to respond fast to them.
- Identifies growth opportunities by revealing the potential of emerging innovations in reducing costs or improving time to market.
Supercharge Your Innovation Management with Data-driven Intelligence
One or few of these approaches may be the best suited for your business, depending on existing capabilities and innovation goals. Regardless of which innovation management approach works for you, data-driven intelligence will be key to unlocking innovation for your organization. At StartUs Insights, we offer a range of services enabled by the StartUs Insights Discovery Platform covering over 2,5 million startups & scaleups globally. Some of our services that help you achieve your open innovation goals include:
- Trend Scouting: Identify emerging and latent trends and developments that will impact your competitiveness
- Technology Scouting: Reveal emerging technologies that match your innovation goals
- Startup Scouting: Discover over 2,5 million startups & scaleups globally, scouting the right partners & saving you weeks of desk research
Innovation management matches a company’s innovation goals with startups and technologies advancing them.
To learn how innovation management can increase your competitiveness and create long-lasting value, get in touch today!
