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Digital Advisory CX Strategy Retail
Jakub Nawrocki
Digital Transformation Retail
Paweł Wasilewski
Values People
Tomek Jurek
Digital Advisory M-commerce
Izabela Franke
Digital Advisory UX research
Jakub Nawrocki
News Retail Technology
Paweł Wasilewski
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The Why, What, and How of Innovation Management

The Why, What, and How of Innovation Management

In today's fast-paced business world, staying competitive is a top priority for organizations of all sizes. Whether you're a startup or a corporate giant, innovation has become a must, with its role in defining and maintaining a competitive edge more crucial than ever. But innovation isn't synonymous with implementing cutting-edge technology; it may also involve finding new markets, optimizing internal processes, and mastering your end product or its production processes. It may affect literally any area of your organization or its market operations. Therefore, it requires strategic planning, but, according to our Barometr Retail study, only 45% of specialists state their company has an innovation management strategy in place.

Below, you’ll find a brief summary of our recent panel discussion that took place as part of the Digital Customer Care event organized by Rzeczpospolita. We discussed how renowned brands like Allegro or Volkswagen manage innovation, and why an innovative approach should be at the core of any organization that wants to be competitive. We also reflected on how some organizations in the business environment can help foster a culture of innovation.

Panel discussion recap – innovation management for gaining a competitive edge

During the panel, I had the pleasure to exchange thoughts with Monika Synoradzka (President of Huge Thing, Partner at SpeedUp Group), Łukasz Woźnica (Head of Business Development at Strix), Witold Grzesiecki (IT Infrastructure Expert at Volkswagen Poznań) and Konrad Synoradzki (Senior Manager Product & Engineering at Allegro).

The main points of the discussion were that:

  • For larger organizations, innovation management has evolved from a choice to a necessity.
  • Brands that successfully implement innovative solutions are well aware that innovation isn't a one-size-fits-all concept and that harnessing its full potential requires a strategy that reflects their specific industries and corporate cultures.
  • Innovation isn’t just about gaining a competitive edge; it's also about gaining a clear understanding of your organization's position and the pivotal role that innovation plays in your overall growth strategy.
  • To make innovation work, it's important to adapt it to the unique needs of each organization. The good news is there are plenty of companies out there that can help with your innovation needs if you don't want to build everything from scratch.

How should companies approach innovation in today's business environment and use it to create a competitive advantage?

As Monika put it, the term “innovation” has become so broadly employed that it has lost much of its inherent meaning. Innovation, as she sees it, holds diverse significance for each company. When harnessed skillfully and with awareness, it can serve as a tool to establish a competitive edge. However, it is essential to keep in mind that not all forms of innovation will fit this mold, and the will of organizations to build “something nobody has seen before” may not be the Holy Grail. You may ask: why? As it may turn out the individuals shaping the organization, its processes, or its mindset can make it infeasible to create something truly unprecedented because the associated risk is deemed too high.

Building an innovative team and culture – it’s all about the people

As highlighted by all the panelists, innovation isn't confined to a few individuals working in isolation. It thrives in environments where diverse skill sets and backgrounds come together. Hence, innovation teams should function as catalysts within organizations.

Managing innovation requires a balance between a top-down and bottom-up approach. In every organization, there should be individuals or structures responsible for gathering ideas and fostering a culture of innovation. Innovation should be embedded in the organization's DNA, from leadership to every employee.

The real key to innovation's success isn’t just the innovation itself; it’s the people leading the way. Without someone who actively looks for new ideas and gets involved in the process, innovation won't work.

Organizations often want to implement specific solutions because they see market tycoons already have them. However, to make innovation work, it's essential to tailor it to the unique needs of each organization and create an innovation-friendly environment that involves not only people from your organization but also external partners.

The process is the key to successful innovation management

For many organizations, innovation is about getting immersed in the process itself and realizing that they can work differently and more effectively, thus improving operational excellence.

Volkswagen Poznań is a prime example of an organization that embodies innovation. Their innovation isn't confined to revolutionizing car manufacturing processes; they also delve into eco-friendly initiatives, like harnessing foundry heat to warm homes in Poznań. It's a reminder that innovation doesn't solely revolve around cutting-edge technology.

To effectively manage innovation in a large organization, it’s essential to work out the right process. But, at the same time, it's equally important to maintain a balance and keep some flexibility in place to prevent excessive red tape from stifling innovation. The real key to success lies in finding that sweet spot between an organized approach to innovation and avoiding too much bureaucracy.

How to manage innovation risks?

In every project, there is a certain level of risk involved, and working with innovation isn’t an exception here. I won’t reinvent the wheel if I tell you that while innovation projects may not necessarily yield returns within a year or two, their overall profitability remains a key consideration for the vast majority of organizations.

The more structured your innovation workflow, the better you can mitigate associated risks. Effective risk management requires finding the right balance in your project portfolio. You don't want an overwhelming number of projects running simultaneously, which can dilute your focus. This is especially crucial in larger organizations, where project portfolios are extensive.

As emphasized by Monika Synoradzka, there are several factors that influence the success of working with innovation and reduce associated risks:

  • Building an innovation culture – innovation shouldn’t be seen as an additional task on an already long to-do list of employees. The organization's goal should be to foster an innovative work style, and team members shouldn’t feel burdened by juggling existing tasks with innovative endeavors.
  • Understanding the purpose of innovation – to consciously reduce the risks associated with innovation, organizations must know why they’re introducing innovation, what they aim to achieve, and how ambitious their goals are.
  • Understanding capabilities and limitations – often, organizations embark on innovation initiatives without a clear definition of their business needs and priorities. Simply adopting innovative solutions because they’re trending, without considering whether they align with the specific needs of the organization, can bring counterproductive effects.
  • Defining KPIs for measuring innovation – these KPIs can be categorized into three groups: activity metrics, which measure the extent of engagement in innovation-related activities; governance metrics, which help determine if particular innovation is suitable for the organization; and global KPIs, which assess how well innovation aligns with the overall strategy of the organization.

Key takeaways for effective innovation management

Effective innovation management hinges on defining clear organizational objectives and expectations. By doing so, it becomes much easier for companies to select the right tools and metrics to gauge project success.

Embracing innovation requires a degree of courage, especially when a large organization is taking its initial steps into the digital landscape. Uncharted territories come with uncertainty, and innovation, as every project, carries some risks. These can be mitigated by choosing the right partners to help define your strategies, decide which processes to optimize, and implement actual solutions.

At the end of the day, it’s worth remembering that it’s always the people who drive innovation forward. Especially those people, who view innovation not only as a duty but also as a constant journey to refine and enhance their work.

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