Innovation Management - Creating value with innovation management.

Can non-industry specific IP funds help to push the innovation envelope? Can we bridge the gap between industries and geographies to provide a systematic breeding place for forward-thinking inventions? Gunjan Bhardwaj explores.

How do managers of large and prosperous companies decide which ideas to embrace and why do they produce so few innovations? Gunjan Bardwaj explains how psychological decision making theories can shed some light on these common and complex questions.

Has the virtual world become stifled by the comfort and ease of following successful platforms? Gunjan Bhardwaj offers his hopes and suggestions on how to update online business models.

We see a lot of programs being run in companies in the name of innovation. Of course some of the large corporations need to run innovation programs for name sake. They need some window dressing for analysts and industry observers lambasting the same for not being innovative enough.

Are Clusters or cluster initiatives really adding any tangible value to firms? Are they obsolete? Maybe not yet, but I believe if the present policy tools and institutional frameworks are not reformed they may very well soon become so. In the following blog I would like to focus on three areas that have not been given enough importance by policy makers: focus beyond geographies, new clusters and cluster performance.

Before the radical shifts in technology disrupt the industry fabric, there exists a great potential to appropriate value from the market through incremental product and business model innovations. The less intense the competition, less matured the market – larger is the potential. The emerging markets of the world the BRICs (where s could stand for the plurality as well as South Africa), have long been projected as the markets to invest in. These countries have a thriving middle class; more than a third of humanity, albeit majority poor, should present a great opportunity for companies from the western world. Looking at the Value dynamics, migration to these markets by companies in the western world, particularly India and China, can be considered to have taken place in different waves.

Not so long ago, internal R&D activities were considered one of the most valuable assets a company could have. The rather “outmoded” concept of closed innovation, in contrast to open innovation, was built on self-reliance and on the principle that successful innovation required control and secrecy.

Over the past few years, innovation in India as a corporate theme has constantly gained importance, becoming a prerequisite for long-term success, or maybe even survival, due to the discontinuous pace of change of the environment. Thus, innovation has now reached for some companies as a corporate priority, affecting every single aspect of an organisation.

Realising the limitations of their own knowledge, and internal R&D capabilities, an increasingly high number of companies are currently making the decision of partnering externally to develop new technologies. Companies’ interactions with their business partners or even competitors are becoming more and more frequent.

There has been a shift from the emphasis on what people called the “information value chain” to “knowledge value chain” for quite some time. The environments are shrewd and unpredictable in this world of growing competition and rapid technological progress. The information value chain just served as a database of “best practices” whereas “knowledge value chain” emphasizes on the active sense making of human beings handling business.

In one of the reports in one of the recent Harvard Business Review issue, Harvard Business School’s Mikolaj Piskorski’s compilation of the relative activity of Facebook and Myspace with respect to overall Internet activity in the US was given. This comparative analysis showed Myspace to be over indexed in southern and Midwestern US and Facebook in other regions. This compilation, claimed the report would enable marketeers to target either platform’s users with more targeted messages.

To effectively utilise the R&D investments in order to improve the innovation output, an organisation needs to make changes with respect to both the internal organisation as well as the way it manages its ecosystem.

Common sense says that if one wants to improve the innovation output, one needs to either (a) increase the size of the opportunity set that goes in the so called ‘Innovation Funnel’ ; (b) Speed up the throughput of the ‘Innovation Funnel’ and/or (c) improve the variety of the opportunity set passing through the ‘Innovation Funnel’.

Apart from investing in a separate CSR (Corporate Social Responsibility) Portfolio, companies can also embed CSR into their business model(s). This is a way of lubricating the ‘touch points’ with various stakeholders. This kind of CSR perforates in the corporate thinking and does typically not exist in a separate CSR portfolio. This requires that all projects are not only derived from capabilities a company has but are also embedded in the very juxtaposition of them onto the markets they serve as well. Hence, they cannot be separated from the business model(s). I believe this kind of CSR is really true CSR!

We know that clusters of co-located firms play an important role in supporting innovation and wealth creation. Spatial proximity can allow firms to take advantage of scale and positive externalities such as access to skilled labour, specialized subcontractors and rapid flows of information. Shared history, trust, and common understanding of phenomena may also enhance cluster members’ ability to interpret, and learn from, each other’s strategies. Yet location in regional clusters in and of itself does not guarantee success.