To first understand how to manage innovation, one must first know what innovation really means. Innovation is defined as making a change or changes in something established, especially by introducing new methods, ideas, or products. Essentially, what this means is that innovation is finding new ways to better improve a company’s product or services.
The problem asked why does innovation need to be managed. This is simply because to steadily grow the public’s acceptance of a certain product or service that is undergoing innovation. These innovative developments go through various stages of public acceptance. This acceptance will proceed at different speeds based on each individual innovation.
According to Dennis Herrick there are five key characteristics of any new idea or innovation. These characteristics are:
1) The relative advantage of the innovation.
2) The compatibility or how it relates to the values and needs of the public acceptors.
3) The complexity of the innovation or how simplistic it is.
4) Observability is how other people are able to see the innovation being used.
5) Trial-ability, this is how easy it is to try the newly innovated product through free sampling or “light” versions of the software.
Additionally, Herrick states that all new innovations go through a curve of adoption. This is a diffusion through the marketplace or public acceptance. The market is then broken down into tiers of acceptance with the first being the innovators themselves at 2.5 percent, then followed by the early adopters at about 13.5 percent then the early majority and late majority follow at around 34 percent each. The remaining percentage is then made up of consumers who never accept the new innovation or idea.
One question that may arise is how companies can afford to innovate. This can be left to the company. Some larger businesses create a whole separate department in which they allocate funds towards innovation. Others may choose to avoid innovation altogether which can often time lead to a company’s downfall.
In order to properly manage innovation managers must have a willingness to listen and accept new ideas or consider new improvements to already stable projects. Without maintaining an open mind a company will not make significant strides in keeping pace with the market, which could result in a steady decline over time. Innovation is what drives society forward and without it a market could plateau.
Herrick, D. F. (2003). Media management in the age of giants: Business dynamics of journalism (2nd ed.). Ames: Iowa State Press.