Case 2 Innovation Management 20-09-2022
What is innovation management?
Innovation management is about how organizations and their employees manage their
innovation activities. Most important to know is that an innovation can be managed. An
innovation is not something that happens by accident.
Managing an innovation can be planned and structured:
- deciding how much innovation is needed,
- select the business areas in which you want to complete,
- selecting an appropriate innovation strategy,
- encouraging the innovation culture in the organization and;
- measuring the success of the innovation.
What are different phases of innovation?
Every innovation must be managed through a number of phases (funnel):
1. Idea generation: input of ideas for new products, services and processes. Some will
be directly filtered out and others will be further developed.
2. Choice of best ideas: selecting the best ideas. The most promising ideas are selected
and developed into concepts. Potential markets will be explored. The best design is
considered and an assessment of investment will be needed.
3. Implementation: management decides which new products, services, processes,
business models or any combination of these will be developed. Unsuccessful
implementation projects are terminated.
4. Market: based on successful implementation projects, new products, services, etc.
are brought to the market.
, Who is involved in the innovation management process? (which phase, which people)
In general, all functions/departments of an organization should be actively contribute to
innovation. So not only the Research and Development department, but for example also:
- Industrial design focus on form and function
- Marketing identity customer needs
- Finance calculate return on investment
- Sales develop new markets; if you don’t sell anything, your innovation is useless
- Users easily forgotten but very important! There is a trend that there is a more
user-focused development right now.
Not every department is that important in each phase; not every department has a big role
in each moment of innovation.
5 roles of an innovation system
1. Efficiency: system needs to move great ideas from concept to commercialization with
speed and minimum use of resources, especially in incremental innovations.
Innovation systems are not as detailed and structured as in the systems for an
assembly line, need broad stages..
2. Create appropriate lines of communication with the company and with outsiders.
3. Coordination: between projects and team with the minimum effort, e.g. allow
parallel work on projects with minimal communication. Ensuring that resources are
available on time is another coordination issue that systems facilitate.
4. Learning: systems establish a discipline to manage the knowledge that is constantly
created in innovation. Systems can capture information on the innovation
performance and make it available to the innovation team and management. This
can be used to identify problems and potential improvements. More importantly,
learning increases the understanding of the innovation process itself; something is
learned about how to improve it.
5. Align the objectives of various constituencies. A system is needed to ensure
consistency of message and inclusiveness. Innovation systems also align
organizational objectives with personal objectives. Properly designed systems can
help bring together the right people and the right knowledge to create the activities
required to make innovation happen.
Management of drugs innovation (biopharma)
Characteristics of the drugs industry
- Research and development within the drugs industry is risky, time-consuming and
costly.
o Technical risk: it is growing harder to develop drugs for complex diseases.
o Commercial risk: an increasing number of drugs reached the end of their
patents. Besides this, payers are increasingly unwilling to cover costs of
expensive innovative drugs. And last but not least, scientific success can be
accompanied by commercial failure.
- These two risks has led to an innovation productivity crisis in the early 2000s. There
was a falling number of new drugs developed and approved which resulted in
escalated R&D costs.
What is innovation management?
Innovation management is about how organizations and their employees manage their
innovation activities. Most important to know is that an innovation can be managed. An
innovation is not something that happens by accident.
Managing an innovation can be planned and structured:
- deciding how much innovation is needed,
- select the business areas in which you want to complete,
- selecting an appropriate innovation strategy,
- encouraging the innovation culture in the organization and;
- measuring the success of the innovation.
What are different phases of innovation?
Every innovation must be managed through a number of phases (funnel):
1. Idea generation: input of ideas for new products, services and processes. Some will
be directly filtered out and others will be further developed.
2. Choice of best ideas: selecting the best ideas. The most promising ideas are selected
and developed into concepts. Potential markets will be explored. The best design is
considered and an assessment of investment will be needed.
3. Implementation: management decides which new products, services, processes,
business models or any combination of these will be developed. Unsuccessful
implementation projects are terminated.
4. Market: based on successful implementation projects, new products, services, etc.
are brought to the market.
, Who is involved in the innovation management process? (which phase, which people)
In general, all functions/departments of an organization should be actively contribute to
innovation. So not only the Research and Development department, but for example also:
- Industrial design focus on form and function
- Marketing identity customer needs
- Finance calculate return on investment
- Sales develop new markets; if you don’t sell anything, your innovation is useless
- Users easily forgotten but very important! There is a trend that there is a more
user-focused development right now.
Not every department is that important in each phase; not every department has a big role
in each moment of innovation.
5 roles of an innovation system
1. Efficiency: system needs to move great ideas from concept to commercialization with
speed and minimum use of resources, especially in incremental innovations.
Innovation systems are not as detailed and structured as in the systems for an
assembly line, need broad stages..
2. Create appropriate lines of communication with the company and with outsiders.
3. Coordination: between projects and team with the minimum effort, e.g. allow
parallel work on projects with minimal communication. Ensuring that resources are
available on time is another coordination issue that systems facilitate.
4. Learning: systems establish a discipline to manage the knowledge that is constantly
created in innovation. Systems can capture information on the innovation
performance and make it available to the innovation team and management. This
can be used to identify problems and potential improvements. More importantly,
learning increases the understanding of the innovation process itself; something is
learned about how to improve it.
5. Align the objectives of various constituencies. A system is needed to ensure
consistency of message and inclusiveness. Innovation systems also align
organizational objectives with personal objectives. Properly designed systems can
help bring together the right people and the right knowledge to create the activities
required to make innovation happen.
Management of drugs innovation (biopharma)
Characteristics of the drugs industry
- Research and development within the drugs industry is risky, time-consuming and
costly.
o Technical risk: it is growing harder to develop drugs for complex diseases.
o Commercial risk: an increasing number of drugs reached the end of their
patents. Besides this, payers are increasingly unwilling to cover costs of
expensive innovative drugs. And last but not least, scientific success can be
accompanied by commercial failure.
- These two risks has led to an innovation productivity crisis in the early 2000s. There
was a falling number of new drugs developed and approved which resulted in
escalated R&D costs.
