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CMW Management was founded in 2002 by Michael Wallenius. At CMW Management we care especially much for leadership, management and innovation. We stand in a sweet spot in-between the customer and technology, to bring good to the end user.

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Mark W. Johnson has written an interesting piece of text on the subject of innovation in Bloomberg Businessweek. “Clarifying Innovation for Success” is trying to give the reader a picture on what innovation and invention is and what it isn’t. I would say that Mr Johnson manages to touch the area in a good manor, and it ends with a special touch. I tend to agree with all that is written in the article and I will below try to complement the article with some of my own thoughts.

He first defines the difference between an invention and an innovation. There is a very distinctive and important difference between them that makes you able to handle them appropriately in your organisation, if you understand the difference that is. Thereafter he throws out the “P word”. They all need to have a Process. This is something that would scare many people that are into the business of innovation or inventions. With all due respect to processes, but they have in many people’s mouth got a bad taste. After having experienced a transformation of a company from a non-process oriented company to a process oriented one, many people have moved on to a new employer or lost faith in that it will ever happen and become a stable company again. So it is not strange that many people have this prejudice against the word “processes”. Also, many of the people that has been working in the field of innovation have had a pretty free and un-managed world to play around in. They might feel threatened in their freedom by introduced processes. Many successful innovative companies have been managed by innovative and entrepreneurial people and a mainstream believe is that a successful innovator is the “mad innovator” being left alone with his more or less mad ideas in his secret lab where crazy things happen. A successful example of this is often mentioned, Xerox and their lab at Xerox PARC (nowadays named only PARC).

But I totally agree with mr Johnson in his statement that there is a need of introducing processes even in the innovative arena. But totally different processes than those that most of us might have experienced in our daily business, in the core business of the company taking care of product development, sales and customer support. But they still need to be managed and a well thought through process that allow free thinking, but also takes care of helping the project to take care of all knowledge created in the thinking process, is needed. I here believe that Henry Chesborough’s thoughts on Open Innovation has a place in the discussion.

Another important thing mr Johnson brings up is the difference between new innovations and core-business innovations. They are completely different in their starting ground, where you in the first case know very little about the actual end user and circumstances for the innovation to be used in, while in the latter case there are a lot of facts that you already know when innovating core business. I strongly believe that they in most cases can’t really live without each other. How many companies create new business innovations that never becomes part of their core business and needs to be further innovated to attract new market segments and create new products? Very few in my opinion. Xerox PARC might be an example again, perhaps. But again, they are about innovation and invention at its core, not about selling products. They help their clients through invention and innovation.

I interpret mr Johnson’s article as there are five elements to successful innovation in core and new innovation:

  1. Processes: “… the process for pursuing the innovation should focus on execution and the deliberate extension from the core.”
  2. Governance and team structure: “The traditional functionally organized structure and governance should be applied to core business innovation, while a small, self-contained team made up of entrepreneurial generalists is more appropriate for new-business innovation.”
  3. Customer: “… The new-business approach seeks targeted foothold markets where assumptions can be tested quickly at low cost on a small group of representative customers.”
  4. Business rythm: “… New-business innovations often go down in flames because they mistakenly ape the core-business approach. They push for scale too soon, overinvest in imperfect assumptions, and lack the patience to let the business grow at a manageable pace….”
  5. Value chain: “Existing channels and partners usually suffice for an extension of the core business, while new-business innovation often calls for custom-designed partnerships.”

I am especially noticing mr Johnson’s comments in the “Customer” and “Business rythm” bullets. Right on the spot! The topic on processes and governance and team structure is a little bit trickier to cover, but mr Johnson’s comment on “Governance and team structure” is well formulated and shows great insight into the area.

I think that the only critique I may give the article is that the delicate subject of applying processes to innovative business is not covered in depth or almost not at all. My own believe is that it is fully correct to set processes for invention and innovative businesses. There must be a couple of important questions being put to every new or core business innovative project being started. There should be an initial analysis on both future possible applications, possible earnings, possible customer benefits etc before a project is started. These questions together with a process workflow that defines how a well managed innovative project is handled, is the least a company should define before entering any operations. All in the interest of getting as much as possible out of the resources put in to a research project.

And in my believe this is not a problem within corporations. I think most companies that deal with innovative projects and inventions has this in place. If they are followed is though another question, and if they are well tought and well understood are other important questions. Where I think there is a lack of demands, processes and management is within higher education research. I think there are way too few demands put on these projects. I feel that we constantly discuss the topic on how to become better at taking higher educational research into lucrative businesses and startups. At least in Sweden. But we are seemingly becoming better at it and one proof of it is the many incubators and innovation and entrepreneurial programmes started at many universities and also educational programs started focusing on taking good ideas into prospering businesses. A very good example of this is created at Chalmers University of Technology named Chalmers Innovation (http://www.chalmersinnovation.com/) together with the programme Chalmers School of Entrepreneurs (http://www.entrepreneur.chalmers.se/).

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