Establishing and Developing an Integrated Innovation Management System

1           INTRODUCTION

1.1       Defining basic concepts : innovation, innovation management and innovation tools

Innovation is a new solution to an old problem. It is therefore about discovery; We never know exactly where we’re going until we get there [1]. But one should know something very clearly at start; the problem and its explicit, clear definition. In between is uncertain and complex, which necessitates us to introduce a process approach to make it manageable like a compass in the ocean.

The first and seminal definition of innovation was proposed by Schumpeter (1934). His work denned five specific cases: introduction of new products, new production methods, exploration of new markets, conquering of new sources of supply and new ways of organizing business [8].

Innovation process, is the general steps that anyone would pass to come to a new solution, starting from a missing or not enough good result, function, ease, speed, comfort, namely a problem definition.

Innovation management, is the decision making and working system, that creates the environment, the means, motivation, planning, administration and control, that makes innovation process work.

Innovation tools, are the methods that make innovation process doable. Sometimes one needs for new ideas, to focus on relations, to understand the root cause, to state alternatives, to choose, to list potential risks. And has to do this with participation, without being dominated by groupthink and without repeating the same ideas, freights being dominated the whirling minds. There are tools to effectively complete each innovation steps.

Briefly saying, to make innovation happen we have to manage an environment that will support innovation approaches, ease innovative initiatives by establishing an innovation system, which will make an innovation process to run with participation and effectively towards innovation targets by means of use of innovation methods and tools. 

1.2       Establishing innovation management system to overcome organizational, individual and group challenges, to make innovation happen

Innovation is an uncertain, incremental, discontinuous and complex process which demands focus for effective communication, multidisciplinary collaboration, concentration of competence, learning, creative solutions and finally results. Looking from the end innovation is a new solution, but looking form the start, there are only old solutions, obstacles, difficulties, everything except the ‘new solution’. One can see also identify innovation as a problem solving, organizational change management and group decision making under risk with respective difficulties.

Despite the immense attention paid to innovation in the literature over the last 10 years, there is a lack of studies investigating the challenges faced by companies to increase their innovative capacity (Galia and Legros, 2004; Segarra-Blasco et al., 2008). In the few studies, various aspects of the internal process of innovation management have been overlooked regarding factors that induce or moderate the intensity of these obstacles (Hansen and Birkinshaw, 2007). However, in recent years there has been significant progress in organizational theory focusing on innovation and consequently integrated innovation management models have come to the forefront (Tidd et al., 2008) [16].

Even though external factors like sectoral context, national innovation system, national cultures influence organizations, since innovation happens within the organization, internal factors are much more important. However, the development of innovation management processes is also insufficient for it to take place. Implementing systems which are able to promote innovation in a systemic way requires an organizational context conducive to the development of innovation efforts. This is done by people being dynamic and departments interacting with each other, by configurating decision making procedures across organizational levels, by the quality of the organization’s relationships with the external environment and by the social conditions which involves individuals in innovation activity [16]. 

Table 1 : Main internal challenges for innovation.

Source : Nagano, M. S., Stefanovitz, J. P., & Vick, T. E. (2014).

In addition to these organizational challenges innovation has also people ve group dynamic challenges too. This can best be explained using the word inertia. The inertia, is the resistance to change decision, a behavioral tendency positively associated with an individual’s preference for consistency. The existence of these phenomena has been linked to status-quo bias (Samuelson and Zeckhauser, 1988; Ritov and Baron, 1992), described as the tendency to maintain the defaults either by repeating a decision or avoiding action. Decision inertia is the tendency to repeat previous choices independently of the outcome, which can give rise to perseveration in suboptimal choices [11]. Whenever several decision processes are in conflict (i.e., deliver different responses), cognitive resources should be taxed, resulting in longer response times and higher error rates. Acceptance, continuation of quality and productivity problems, getting used to lower performance, neglecting customers’ unmet needs should be seen as examples of inertia.

The repeating mind is full of many inputs, experiences and it is conditioned at some level. Therefore, it is probable that every time we try to think about reaching a new solution, our mind will be pulled or effected by the existing solutions and obstacles. Therefore, we start to innovate as soon as we withdraw a belief [6]. One should never forget also that the mind, has built its environment and its processes for years, a culture in which innovation is rare or at least not very frequent. The latter is the essence of inertia.

Therefore, for innovation to happen we need to open a room for finding new answers to old problems, establish a step by step working method guided by specific and meaningful targets, always keep constraints in the pocket not in the mind itself. We have to clearly understand that constraints are there to be discovered, understood and overcome, not to be avoided or minimized.

Therefore, to minimize uncertainties, decision inertia, to promote creativity and action we have to establish a continuously improving innovation management system, to overcome obstacles. Below we will state some of the frequent pitfalls [2], [3] any innovation conduit can face with so to better realize why innovation management system is needed.

1. Believing innovation comes at too high a cost

Many organizations retreat from efforts to develop innovative ideas because they perceive the process as too time-consuming, complicated and expensive. However, organizations that invest the time and money into developing a structured and thorough process for vetting and implementing these ideas can create profound returns in various forms. And once an organization understands and becomes acclimated with this process, the generation of creative ideas will become a daily occurrence.

2. Believing innovation is not relevant to their industry, company or case

Many people mistakenly believe that innovation is reserved for technology-based companies. However, any type of business can apply innovative ideas to support revenue growth and strengthen their position in their market.

3. Waiting for the organization to grow

Waiting for the organization to reach a particular size is a common mistake, because small businesses often tend to innovate faster than larger ones. Of course one will need some resources to invest on innovation, especially time of the key personnel. The cure is not to grove but to develop employees and make them as ready to be delegated personnel.

4. Not having a system for finding and vetting ideas

Ideas are great— given a chance to grow and develop. Before collecting ideas one needs better to establish a system to collect, thoroughly analyze, follow up and upgrade it when necessary. Otherwise the risk that great ideas lost and not even seen in between mediocre ideas.

Identify problems, unsatisfied needs and market gaps and delegate these issues to team members who are best equipped to devise appropriate solutions can be one of the effective ideas to feed the innovation process. And even scheduled activities can be effective to maintain a constant creation of new ideas.

5. Forgetting to thoroughly evaluate and inoculate ideas

It’s easy to get up in the “high” of an idea that seems great. Unfortunately, while some ideas may look great at first glance, they may be impractical or simply not aligned with the company’s goals. Once an idea has gotten past initial vetting, it should be further evaluated to weigh the risks and benefits of successful implementation. With problem prevention approach the idea should better be inoculated to improve chances for success overall.

6. Leaving team members out

Failure to involve the entire team in innovation efforts is a big mistake, as everyone in an organization has difference perspectives and experiences they can lend to the development of new ideas. Many business leaders have a tendency to involve just a select number of people during innovation development efforts. However, employees outside of this core team can offer fresh insights.

7. Only valuing certain opinions and not making the idea an anonymous one

As much as favoritism in business is tried to be avoided, it does exist. And unfortunately, that can lead to some team members’ opinions and ideas being valued over everyone else’s. Companies should provide everyone with the opportunity and encouragement to explore and submit their own ideas to the group. Ideas are thoroughly synthesized and become anonymous after an effectively interacting group session. One should not forget that the effectiveness of the group process effect highly the consensus, quality and commitment.

Innovative organizations ensure that their operating strategies are developed through interactions with their employees, customers, partners, vendors, suppliers and consultants. They review market trends and identify, through benchmarking, what is required to out-perform their competition.

8. Being affected by groupthink syndrome

In most of the organizations communication is a problem. Due to differing priorities different departments compete. Most of the time they never come into a harmony. On the other hand in some topics like quality, safety and innovation they reach harmony very easily which is also a problem. We name it “groupthink,” a phenomenon which occurs when members of a group simply agree to promote harmony in the group and to fit in, not because they really do agree with the others.

In fact, a mature decision-making process also needs controversial ideas to strengthen a suggestion. In case decision making process runs step by step and in each step right tools are used effectively this thesis-antithesis dialect can be very fruitful and come up into real and valuable synthesis. Project managers should think ahead and prevent both group fight and groupthink before it starts, ideally.

9. Focusing on one type of innovation and creating diverging priorities

There are mainly 3 types of innovation and it’s not very innovative to just think about one of them. Sure, the value added would be much higher when one serves innovatively, an innovative product that is produced using an innovative process. Otherwise people in organization will be stretched from different edges and a stress through competing priorities will be felt highly within the organization. We all know that at some point this can be counterproductive.

10. Organizational culture not managed or at least treated some

Thinking that any culture has defects is management’s major task, if not the most urgent and pressing one, to understand the actual culture of the organization which common perception about the right way of is doing and behaving in the organization.

Innovative culture is a result of lower level of individual maturity, group process effectiveness, deployed strategies, effective systems and feedbacks. Self-confidence, belonging, self-awareness, self-development, competence, organizational strategies, effective business (planning, quality …) processes, communication and collaboration practices maturity level will affect development of an innovation culture.

Organizational arrogance and ego will surely undermine “people’s learning hunger and thoughts in different ways, efforts to reinvent oneself and their work”. Having employees that a committed genuinely to focusing on customers and process excellence can make a real difference. Therefore, interviewing and hiring the right employees can be just as breathing fresh air.

11. Prioritizing short-term results

Innovation, can sometimes create short term solution but still it is not a short term remedy. It takes time to develop innovative initiatives and patience is a necessary element of any innovation development, and initiatives need to be given time to build up steam and produce real results. 

Short-term, bottom-line oriented thinking can be a sure fire way of crushing innovation. When there is constant pressure and focus on quarterly results, employees feel compelled to focus on short-term solutions, tend to focus on sustaining existing products and services and have less time and mental capacity to think about what the business really needs to achieve and maintain profitable operations over the long run.

12. Failing to celebrate

Creativity is fun, exciting way to engage people from across the organization. Additionally, rewarding and celebrating innovation will encourage more innovation and creativity and will help the business grow. Innovation contests, brainstorming sessions and other activities are a great way to encourage innovative thinking and collaboration among employees. So let’s make innovation an opportunity for celebration in the organization.

13. Unsupportive performance measurement system

Innovation is a planned, managed and focused an activity. Such a process need rational decision making and evaluation activities. Therefore, it necessitates a management by objective background and a measurement system that measures not only short-term outputs, but also less tangible indicators related to performance and processes; 1) To what extent are meetings focused on exploring new ideas? 2) How many of their staff are genuinely interested in (and willing to pursue) new ideas? 3) Are they trained to understand the innovation process? 4) Is there an aggressive effort in the organization to build new opportunities based on the development of new services and products?

2           ESTABLISHING/UPGRADING THE INNOVATION MANAGEMENT SYSTEM

This case study is the result of a two parallel, six months innovation management system upgrade consultancy support in automotive industry. The fact that both organizations differed in their background (one young and the other mature organization), structure (one is boss managed, the other a more institutionalized one) and type of production (one producing parts, the other producing end products) resulted in totally different emphasis, priorities and content during an identical (with the objective of applying TS 16555 into the organization) six months consultancy study which resulted with more generalizable highlights.

Due to the process these companies are in actually we cannot give their names and the content of the studies. But in coming months we will include those company’s own experiences into the paper. This process forced us to generalize our learning points, turn it into a general approach.

Automotive industry is a high standard industry, meticulously and periodically audited by its customers and third parties. Any company working in automotive industry have elaborate quality and  environment management systems for being supplier nominee to their customers. The continuous quality improvement and price reduction targets forces companies to become better everyday. Nowadays automotive suppliers feel the need to innovate to overcome the challenge.

2.1       Evaluation existing situation/system with innovation perspective

There are evaluation and scoring approaches based on TS 16555. One can form a new one too. The important aspect is to establish a realistic, simple system and to deploy it into a large number of sectors and organizations to be able to provide companies a benchmark platform. Here scoring is the critical and difficult issue. To develop a better measurement system, one would better benchmark EFQM evaluation method. Nowadays innovation promotion programs are popular, companies join those programs to foster organizational development, to have a base for comparing their performance with other companies.

Our case was a similar one and we had started with a completed evaluation in both companies. We had only 6 months’ time and at maximum six visit to upgrade the system. At the end a final review would be carried out. To make the journey effective and efficient we have created an objective focused working plan ‘6 Day Innovation Management Upgrade Program’ starting with the end in mind (See Table 2).

This planned approach had been very effective since it helped us determine the situation and priorities within first 2 months of the study by consensus of management team. At the 3^rd month we were able to obtain an action plan and at the 4^thmonth some steps to improve the innovation management system had already taken place and the action plan improved. At the time, what needs to be done had been clear for every member of the management team. The 5^th month was a month in which we had started to document the new innovation management system together with old upgraded systems and new initiatives started and planned. The 6^th month was a month of finalizing the started activities and consolidate the initiative.

Table 2 Six Day Innovation Management Upgrade Program

2.2       Understanding the essence of IMS and its elements to effectively upgrade or complement the actual management systems

The innovation management system is not a system invented from scratch. It is a new step of evolving standards (See Figure 1). It requires issues that are included in the total quality management literature which are not included in ISO 9000 quality management system; such as systematically managing creativity, cooperating with all stakeholders within and outside the sector, and creating tangible commercial values.

Figure 1 Evaluation of Management Systems

Source: Finn Kollerup, 2017.

Innovation is needed and has been practiced for a long time in the context of quality improvement and the development of the new products. Quality and innovation are partnering disciplines, which can be useful to each other and together create organizational differentiation for competitive advantage [7].

After recent technological developments many products and services are about to change. We can say now that we had already entered in a period of total renewal. From now on change is subject to be a routine process, rather than a project work carried out by the demand of lead users.

As can be seen from Figure 2, TS 16555 innovation management system is an integrated system and it is formulated to make the innovation as part of the daily work. Therefore we should upgrade our systems to be able to take part in this total renewal process.

TS 16555 has 14 elements, in 4 categories;

1.         Strategy

1.1.     Innovation Strategy

1.2.     Leadership

2.         Enablers

2.1.     Resources

2.2.     Innovation Culture

2.3.     Collaboration

2.4.     Organizational Structure

2.5.     Learning

2.6.     Basic Competences

3.         Innovation Processes

3.1.     Idea Development

3.2.     Idea Selection

3.3.     Project Development

3.4.     Application & Commercialization

4.         Innovation Results

4.1.     Company Performance

4.2.     Innovation Performance

Figure 2 TS 16555 Integrated Management System

Source: Finn Kollerup, 2017.

An organization can keep improving its innovation system and its respective elements using CEN/TC 389 ‘Innovation Management’ with tools, in the form of standardization documents. This way can ensure a more systematic approach to innovation and optimize the planning and management of all aspects fostering their innovation capabilities [6]:

–       EN 16555- part 1 – Innovation management system

–       EN 16555- part 2 – Strategic intelligence management

–       EN 16555- part 3 – Innovation thinking

–       EN 16555- part 4 – Intellectual property management

–       EN 16555- part 5 – Collaborative management

–       EN 16555- part 6 – Creativity management

–       EN 16555- part 7 – Innovation management assessment

TS16555 is a holistic model for any organization that can be used as a guide, reference and benchmarking structure. There are and will be other models proposed for innovation management systems. Each model can have a better defined part that can be used to enrich the TS16555. And we suggest anyone to revise their systems using different suggested models. Here we want to add one alternative model similar but with more detailed input in idea to result conversion process (See Figure 3).

Figure 3 : Integrated model of innovation management

Source : Nagano, M. S., Stefanovitz, J. P., & Vick, T. E. (2014).

Below on Table 2 you will find researches carried out on specific stages of the innovation process; Prospection, ideation, constructing strategies, mobilizing resources, implementation, evaluation. This model is process focused one but it does not consider commercialization issues for example. Below you will see that still this model is lacking detail and we have provided two important tools, LaSalle Innovation Matrices and 7MP Tools.

Table 3 Innovation process, subprocesses, objectives and associated tools

Source : Nagano, M. S., Stefanovitz, J. P., & Vick, T. E. (2014).

2.2.1. Strategy derived from organizational challenges is the source of energizing leadership

All starts and develops with management choices. But even management choice is a necessity, it is not enough, the organization needs innovation enablers. For some cases a very brilliant idea from nothing can appear and change things but this is like a lottery and an organization cannot rely on unpredictable sparks. Innovation need its main processes to turn new suggestions, opportunities into an added value, provide results.

Organizations who chooses to be innovative somehow start to establish elements of innovation management system partially. They put ‘idea suggestion boxes’, they post posters, in some meetings highlight the importance of innovation and they get some result than. And most of the companies who have quality systems notice that,

·       they had already put customer needs as a priority,

·       were established systems to collect ideas that will lead to process and product improvement,

·       supporting collaboration to a degree,

·       they were already working to launch new and innovative products, and 

·       they had budgets, financial control system and even key performance indicators (KPI).

Then someone comes and speaks about TS 16555 as a new system. Even though it is hard to believe, it is a new system.

In 1994, Çelik was asked a similar question at the start of his consultancy career as ‘we grown at least 10% to 20% every year, we carried out projects with teams and we never used quality tools and processes so far! Did we applied total quality management unintentionally?’ He answered no. Yes, they were talented, committed, hardworking engineers and technicians, maybe company’s 3% star personnel who did all these projects. They had decided, got the management approval and accomplished their vital priority tasks.

But the 97% of the company were doing daily routine work. They had neither complaint, nor suggestion except their position, salary and benefit package improvements. His answer was ‘total quality management is to make rest of the company work like stars by utilizing problem solving process and problem solving tools. Since in those years companies invested a lot of time and money into quality management strategy, even though 97% of the personnel never used quality tools, problem solving process and employee suggestion systems didn’t work fruitfully.

Now organizations have to understand the basic difference TA 16555 Innovation Management System brings. Innovation strategy can be one of the nice to read documents or it can be a consensus found within a chaos that is energizing and mobilizing people. Most of the meetings add new priorities, things to be done when there is not enough result-oriented action, therefore they are tiring and boring. Innovation strategy cannot be such a document. Some companies may have mediocre innovation strategies but very effective systems. The vice a versa is true. In most of the cases both suffers form insufficient investment, construct, maturity and energy. A good innovation strategy should highlight all parts of product, process and service innovation priorities.

2.2.2.Enablers provide base for effective action, ease change, makes objectives achievable

Enablers merit a deeper analysis and understanding in any organization. They are the fuel for movement, climate plants need for growth, sun and water necessary for photosynthesis. When asked most of the managers will say that their organization has enough enablers for innovation, but during day to day work anyone committing for innovation will confront frequently with insufficiencies and obstacles. Already in many cases it is really difficult to align organizational departments into converging priorities.

Resource is always a scarce resource, especially time is the scarcest one. Not considering R&D budget and new investment plans as part of the innovation, one will easily realize that resources for innovation are really limited. Therefore, a reasonable budget should be committed by management.

Innovation culture is the climate we need to better develop ideas into results. Important factors affecting innovation should be present and balanced. For example, result and process focus are both needed. Use of tools, data and also action orientation is needed. Supporting diverging ideas but being able to commit same target is another need to be balanced dichotomy.

We link everything at last point to culture in our analysis about sustaining problems. However no one has a systematic approach to change that, except changing heads or benefit package which are both not sound interventions. One should better start accepting that culture is counter innovative and decide whether we have will and enough courage at least for trying to change that.

Kambiz and Aslan (2014) that organizational culture has a significant effect on organizational innovation. This result is also supported by a number of studies showing that innovation activities can be enhanced by organizational culture (Büschgens, et al., 2013; Abdullah, et al., 2014 ). Okibo and Shikanda (2011) analyzed the effects of organizational culture on innovation in the services industry, and they found that there is a significant relationship between organizational culture and innovation, they also recommended that for organizations to be innovative it must first adjust the entire organizational culture toward innovation, this also requires organizations to increase the sharing of knowledge, skills and awareness [15].

Collaboration is another frequently talked but not improved topic. While all our society pays importance on individual wins, we expect people to collaborate. Maybe it is because we decreased our expectation form collaboration and to meet is understood as collaboration. In innovation field it means that different skills and approaches complement each other to make something greater and new. In our daily work there is not much need for collaboration though.

Organization should promote collaboration and multidisciplinary work. In last years organizations are more focused on R&D and new market challenges. But all of these new product and process improvement responsibility seems as if work is loaded more concentrated onto engineering, R&D organizations. But innovation management is more fruitful when the organization commits and focusses as a whole. Therefore we need to find way to make multidepartment committee works more effective since innovation should be no department task.

Learning new competences is another easy to say and hard to make issue. Since 1990’s organizations invested significantly into training programs without measuring the effectiveness, since those training programs were not inked to any company KPI’s or business objectives. Now we have to realize the missing skill in innovation journey, but of course this necessitates first that we feel responsibility about the innovation targets.

Knowledge Management (KM) is discussed as a central element; the importance of knowledge management and its role in enhancing innovation is widely acknowledged. Knowledge is seen as a vital strategic resource, which requires special attention, and the innovation capability of companies depends on their ability to capture knowledge from external and internal sources (Cantner, et al., 2011) [15].

2.2.3.  A specific, planned work system is needed to convert opportunities into commercialized innovation outputs

Idea development, idea selection, project development and application-commercialization were already activities we were accomplishing when needed. We now see that those activities have become a specific business process.

One needs a structured process to collect, evaluate and develop ideas to put more interdisciplinary work, relate that with company innovation strategy, take some time to discuss and develop it with stakeholders. Think of a meeting in which new ideas are presented to a management committee, presenters are always stressed and the evaluators 

Why not to turn this idea selection into a collaborative and contributive process? Let’s think together: In past have you ever been in a meeting in which one or two items from a list was selected? Do you think that everybody had understood all the alternatives thoroughly? Looking towards the past one will see that those selections were all shoddy. Unless one continues with the same approach one cannot feel and perceive game changing ideas and approaches.

Developing a project should also be handled differently. Think a project development as if Christopher Columbus prepared its journey to pass the ocean, to discover the road to India. One should be prepared against different uncertainties. One would than take people from all skill set and even one would put in the team someone good at preparing water well. Anyway, we need to be better prepared for the innovation journey.

Figure 4 : Cascading Outcome Of Innovation

Source : Maier, F. H. (1998)

Commercialization is a complex issue. Only approximately  40%  of  all  research  projects  are  successful  from  a technical  point of  view,  22%  have  a  chance  of  being  economically  successful,  and  18%  of  the research  projects  are  stopped  because  they  have  no  potential  to  be  successful  in the  market  place.  Hence,  22%  are  introduced  to  the  market,  but  only  40%  are  really  a  success.  On  the  other  hand,  more  than  50%  of  all  innovation costs occur  in  the second  and  third  stages  of  the  innovation  process  (Mansfield et  al.  1981).  This  shows  the  importance  of  the  phases of  innovation  and  discussion and  the  necessity  for  competent  and  sophisticated  management  in  these  stages [12].

In Turkey most of organizations grew because they produced quality products, for less price, for a known demand, stable market. It was not about commercialization it was a sales activity. But we now have to learn to understand market, feel opportunities and win customers as earlier as possible. The innovation area brings a lot of uncertainty which should be handled using a planned research, development and test processes.

The above four steps (Develop ideas > select ideas > develop project > commercialization) are the basic steps of converting an opportunity into an innovation. We need good methods to transform this four step process into smaller and better defined sub-steps. In the innovation tools section we will provide some answers for that.

2.2.4. Learning through performance measurement

Performance evaluation can be a source of motivation or freight depending on organizational culture. In an innovation culture performance management is always a source of learning, any discrepancy should be measured, evaluated and used as a source of learning. Organizations keep maturing with their systems and keep improving respective results (See Figure 5). This result orientation is a healthy perspective to make organizations systems effective and efficient. Otherwise they risk mediocre and non-effective, bureaucratic systems.

Performance management has two aspects; one with company perspective, the other with innovation perspective. Within company perspectives it is advised that performance evaluation is done using both financial indicators and non-financial indicators [5]. For measuring innovation performance establishment of an internal audit system and a continuous evaluation of IMS’s 14 elements is suggested.

Figure 5 Differing Maturity Levels of Innovation Management

The four-level innovation-management maturity model as defined in the CEN/TS 16555-Part 7: Innovation-Management Assessment

Any organization can have its own specific priorities to manage due to the nature of business, sector and structure. On Table 4 you can find some of the categories for which direct and indirect measures would and can be deveoped.

Table 4. Innovation management measurement areas

Source : Adams, R., Bessant, J., & Phelps, R. (2006).

2.2.5.Open innovation in clusters is a less riskier and more promising approach for innovation management

While collaboration both inside and outside the organization is an essential element of innovation management system, open innovation is a more strategic approach to innovation and it is worth to consider it. Open Innovation is the purposive use of inflows and outflows of knowledge to, respectively, accelerate internal innovation, and expand the markets for external use of innovation (Chesbrough, 2003) [13].

Open Innovation approach paradigm is promising for mature industries: (i) the prevalence of the outside-in dimension (Chesbrough and Crowther, 2006), where the reason for accessing external sources is the willingness to minimize risk by investing in technologies that are already proven in other applications; (ii) the enabling role of top management in promoting the transition towards an Open Innovation approach (Vanhaverbeke, 2006; van de Meer, 2007); (iii) the need for a champion promoting change along the managerial levers on which the implementation of Open Innovation occurs (Chesbrough, 2006) [13].

We observe that in mature industries: (i) the starting point of the process of implementation of Open Innovation is in the organisational structures lever. The creation of independent organisational units for managing innovation projects represents a strong signal that the status quo has been unfrozen, but without interfering with the firms’ basic processes and routines; (ii) the marginal role played, at least in the first phase of the process, by the firms’ network of customers and suppliers as a key enabler of the adoption of the new paradigm; (iii) the pivotal role of the individual social network of the Open Innovation champion, which appears to act as an antecedent to firm-level relationships; (iv) companies using Open Innovation to extend their enterprise do not create new processes and metrics; instead they layer an Open Innovation perspective onto existing processes’’ (Chesbrough and Crowther, 2006).

Open innovation is promising especially in clusters. Taking into consideration an increasing globalization and the industrial transformation processes, cross-industry innovations have gained more and more importance, and different industries meet or overlap (for example, health and bio- technology, or ICT and automotive). However, this trend also makes innovations more and more complex and difficult, especially for small and medium-sized enterprises (SMEs). And this is where the cluster and network initiatives, whose goal it is to bring together and build networks between different stakeholders or stakeholder groups, can come in to reduce the barriers for joint innovations. Clusters can use different approaches in combination to internalize or externalize information needed, such as Technology Scouting,  Innovation Matching, Cross-Clustering activities or specific Technology Transfer projects [17].

2.3       Planning how to upgrade the actual system

In our study, the organizations had been evaluated with reference to TS 16555 innovation management system. This analysis can be seen as a top down approach. The gaps had been identified, a report was submitted. Like any company after the systematic gap analysis (as explained in Section 2.1) the management team evaluated the findings with participation. As a result of this study (See Figure 5) a complete understanding about the missing content has been clarified.  We can say that all management and the organization have assimilated the report.

The next step had been what was needed? What could have been done? Why we couldn’t do that so far? Considering innovation system as a guide and reference (as explained in section 2.2), the ideal situation for each missing issue had been designed/planned/defined. An example of situation analysis study is given in Figure 5, showing the list of priority items to upgrade IMS.

Figure 5 Situation Analysis: What is present? What is needed?

Once the organizations identified the ideal situation for each missing item, the actual established system had been defined. This approach can be defined as a bottom-up approach, looking to the artefacts and actual system conduct. In fact in any organization, upgrading systems requires that actual system first. This analysis provided us a list of things to be done to upgrade the system, to a new desired state. In page 6, Table 2 presented a six step work program, we have seen that it was possible to establish the draft list at 2^nd step, at the second month.

2.4       Putting things into action

In Table 5 and 6 you will find the initial assessment highlights and the results after 6 months study. As we highlighted in Section 2.3 and planned in Table 2, in two months we put emphasizes for a thorough evaluation of the GAP analysis and to be able to prepare a meaningful action plan.

The second important issue was to form an innovation committee and executing the action plan through this committee. The construction of the committee was important, formed form specific departments, a frequent and periodic change of leadership, expertise based small sub-committees as working-acting units.

Each working day was on one side a follow-up and feedback day, on the other hand a thematic working day to focus on a specific planned improvement issue.

Table 5. Organization A : Before and After

Table 6. Organization B : Before and After

3           USE OF APPROPRIATE INNOVATION METHODS AND TOOLS

From idea development, to project, to result there many steps, that is needed to be accomplished both efficiently and effectively. To do so we have to use right methods and tools at the right step. Table 2 summarizes methods and tools that can are used for innovation in a categorized way.

Table 7. Innovation Management and Tools Used

The research was financed by the European Commission and was carried out among respondents from the 15 Member States of the European Union. In total, 4,000 questionnaires were distributed. The target audience was defined as follows: 50% from industry and 50% distributed across four categories: consultancies, business schools, academic centers [8].

The result of the research shows that to support the process of innovation in firms main IMTs used were project management (82%), followed by business plan development (67%), corporate intranets (66%) and benchmarking (60%). Less used IMTs included Delphi method and lateral thinking. Some 43% of the actors in the study stated that they have successfully used IMTs in their own organization. Another 32% said that they do not use IMTs, but the techniques were known to them [8].

We think that we need more tools for decision making and meeting quality. One tool is to plan meetings the innovation process, the other one is to execute meetings effectively. This way we will increase the effectiveness of the core of transformation, from idea to solution.

This way by the innovation process from the end to start will be defined as a series of sequential problem solving steps, each with clear objectives, each to be satisfied as a result of the synthesis of all the ideas, with the minimum human friction. To achieve that we use Roger LaSalle Innovation Matrix methodology, and 7 New Management Tools.

3.1.1.LaSalle Innovation Matrix for Structured Thinking

Most of the innovation management tools are abstract in nature and lack the discipline to achieve certain outcomes in that they ask “open questions” that do not demand answers. Creativity is quite an abstract terms, more the generic term for the opportunity to think differently. Unfortunately, creativity in itself does not present a methodology for “outside the box” thinking, innovation or opportunity capture [9].

3.1.2. Minimizing the risk of innovation

If someone would add value, he or she needs to consider all of the value chain. Value chain includes all the players from the inventor or creator to the purchaser, the user and now even the disposer. All players in the value chain need to have a positive value proposition. Sometimes the user is not the purchaser and being aware of this can change the result.

An other factor is to evaluate the novelty of the product and to position the product so to minimize the risk. In other words to try and find the customer “touch point” that would see your offering as providing some sort of realizable value that can be understood. In some cases this is difficult, but it is still not impossible.

Figure 6 Risk Evaluation Matrix

Source: Roger John LaSalle, 2014.

For example, if A would be in the gray zone product, B should try to position their product on the dark gray area to market as a must have item, not a mere luxury, advanced, new initiative (See Figure 6). And always one would better consider both the advantage of being, “first mover” and second mover which is better and certainly carrying a lot less risk. Clearly, being first to market carries its own special risk; whereas the fast follower or second to market carries far less risk. Further, before your offering becomes truly commoditized with too many new players entering the market, consider and exit strategy, while profits are still high.

3.1.3.Structured Thinking Method Using Innovation Matrices

Innovation process should better be structured as a systematic progress of knowledge, innovation and opportunity capture, the source of infinite opportunities, in the main targeted at commercially focused outcomes.

Rather than having idea creation process a chaotic process, we turn it into a step by step surveillance process crossing seeds and catalysts, obtaining a thinking roadmap. The seeds are sources of ideas a change, an added accessory, complementary product, a new channel. Catalysts are ways to stimulate mind in developing ideas. Such as tracking the use of the product, making a wish list, listing probable frustrations. After all ideas developed and selected, you may evaluate the final outcome and its impacts much more effectively [9].

Figure 7 Product Innovation Matrix

Source: Roger John La Salle, 2014.

Thinking Matrices have been developed for the innovation of:

·       Products

·       Services, that is, the way you do business

·       Processes, that is, how the business operates.

·       Finding Opportunities – That is – how does one walk down the street and find an opportunity?

·       Generating your specialized Innovation matrix

3.2       7 New Management & Planning Tools

In 1976, the Union of Japanese Scientists and Engineers (JUSE) saw the need for tools to promote innovation, communicate information and successfully plan major projects. A team researched and developed the seven new quality control tools, often called the seven management and planning (MP) tools, or simply the seven management tools. Not all the tools were new, but their collection and promotion were [10].

With the use of 7MP Tools one can turn chaotic thought and communication process to decision making process with sequential smaller problem solving steps. These tools with its visual nature, easing participation, can also handle more crowded idea flow and ease decision making after synthesizing all data.

The seven MP tools, listed in an order that moves from abstract analysis to detailed planning, are [10]:

1.     Affinity Diagram: organizes a large number of ideas into their natural relationships.

2.     Relations Diagram: shows cause-and-effect relationships and helps you analyze the natural links between different aspects of a complex situation.

3.     Tree Diagram: breaks down broad categories into finer and finer levels of detail, helping you move your thinking step by step from generalities to specifics.

4.     Matrix Diagram: shows the relationship between two, three or four groups of information and can give information about the relationship, such as its strength, the roles played by various individuals, or measurements.

5.     Matrix Data Analysis: a complex mathematical technique for analyzing matrices, often replaced in this list by the similar prioritization matrix. One of the most rigorous, careful and time-consuming of decision-making tools, a prioritization matrix is an L-shaped matrix that uses pairwise comparisons of a list of options to a set of criteria in order to choose the best option(s).

6.     Arrow Diagram: shows the required order of tasks in a project or process, the best schedule for the entire project, and potential scheduling and resource problems and their solutions.

7.     Process Decision Program Chart (PDPC): systematically identifies what might go wrong in a plan under development.

4           HIGHLIGHT OF THE APPLICATION

The meetings and their content were planned before the start of the journey (See Table 1). To realize something to happen one needs to plan it and have a roadmap. This proved to be very effective in our case: at the end of two meetings GAP analysis was completed.

An objective assessment report was present. There are some tools, each differing form each other in certain ways. There is no need to focus those, each having TS 16555 as reference. The important factor with assessment is that it requires an outsider. One should prefer someone who is not very close to the industry and/or company.

We have moderated a process so that company managements assimilate the assessment report. This part is the most critical part of the journey. At this point again an outsider but experienced in change management will be very effective. By means of participative meetings the results of the assessment findings need to be explained using company realities, cases. A step by step study with the assessor and project team, than with managers and finally with top managers can help company embrace the findings. To ease the process and to make it more effective we have used 7MP Tools.

Company priorities highlighted and consensus have been created (these meetings have been held as a first activity of multidisciplinary innovation committee). After assessment findings have been translated into company realities, those need to be prioritized and modelled. These priorities would better be in between 3 to 7 at most. If the list is longer we suggest those priorities to be handled in sequential phases.

GAP analysis have been formed (See Figure 4). Priority items need to be developed, clarified. Than this GAP analysis have been transformed into an action plan. We have first started to prepare the action plan at the second meeting. This was needed to create a sense of urgency.

The effectiveness of the action plan have been tested and approved. At the fourth meetings the action plans matured and then we made a final test, to prove the effectiveness of the study. Than deployed the action plan boldly. For each company differing elements of TS 16555 have been chosen as priority.

Action items have been shattered into individual or subcommittee works, duties deployed with one-on-one meetings. All the activities have been consolidated into a Gantt Diagram. The Gantt diagram is followed-up and updated after each meeting. Whenever an activity shoved some delay and lack of output as management consultant we have accomplished a supporting meeting. At the end 6 months consulting support;

• One of the companies started with 5 priority, have formulated a very strong innovation strategy (product, process and service) which provided the needed consensus within the company and reformulated the 5 priority under 3 categories of innovation; product, process, service. Departments focused on priority issues which proved to be effective both for the whole company and individual departments. The innovation management upgrade have been very fruitful for company transformation (6 major processes have been formulated/upgraded), new product development and new marketing initiatives.

• The other company with much more developed systems, have effectively introduced an innovation management committee, formulated an effective innovation procedure, all the initiatives to manage innovation have been deployed into innovation management committees’ sub-committees. Strategy renewal, culture development, campaign management, participative software development issues have started to be managed by this committee. Another major initiative was that to deploy the project management software used within R&D to whole of the company.

5           CONCLUSION

This study summarizes how any company can start with establishing a systematic approach to innovation. To establish an effective system, we have also summarized some of the pitfalls any innovation journey can confront with.

Using already established systems as a base is an effective strategy for any company. TS16555 give us enough direction to upgrade systems in an integrated approach. We all know that every system upgrade results with a new level of maturity before the next.

Beyond that innovation management constitutes the base and milieu for innovation. The core of IMS is the innovation process which turns an opportunity into a new solution. We have to be aware that innovation is a thought process who is never so free of prejudices, existing mind patterns and especially groupthink effect. Beyond that risks, market factors, all the value chain should be considered.

To make the innovation process more effective and efficient methods and tools need to be used. We have evaluated list of the tools and methods. But also presented especially two methods for a more effective and efficient thought, group decision making process.

One important level is to prepare a real innovation management strategy and procedure (aligned with company priorities) and to be able to manage it through an innovation management committee.

6           REFERENCES

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 [2]    Ayers, R.  2017. Pitfalls to Avoid in Innovation Development, Collaborative Innovation, Creative Leadership, Organization & Culture, Strategies, Support for SME, Innovation Management SE Retrieved February 21, 2018 from the World Wide Web: http://www.innovationmanagement.se/2017/03/08/6-pitfalls-to-avoid-in-innovation-development/

[3]     7 common pitfalls of innovation efforts. 2015.  Becker’s Hospital Review, May 04 Retrieved February 21, 2018 from the World Wide Web: https://www.beckershospitalreview.com/hospital-management-administration/7-common-pitfalls-of-innovation-efforts.html

[4]     Finn Kollerup, 2017. Use the European Innovation Management Standard as your Innovation Checklist Retrieved February 21, 2018 from the World Wide Web: http://finnkollerup.com/2015/09/20/use-the-european-innovation-management-standard-as-your-innovation-checklist/

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