Innovation is both creative and destructive as well as inevitable. Thousands of articles have been written about innovation, yet the general manager concerned with managing innovation in his or her company has very little documented advice to consult. Research and development managers can find a considerable body of writing about how to manage their function, as can marketing managers dealing with new product introduction. For the general manager, whether he or she is the only manager in a small business or a division manager for a large corporation, very little literature is available.
In the present article, we will review some of the major conclusions from innovation studies that might be of use to general managers. For our purposes, a general manager is one who is responsible for several business functions (accounting, manufacturing, marketing, etc.) in a division or company. We will discuss the management of innovation at three levels: management of the industry environment, of the company, and of the individual innovation. At each of these three general levels, we will review what is known about key topics, identify the task of the general manager with respect to managing innovation at the level under discussion, and illustrate our points with examples from recent business history. The levels of innovation management, and topics covered under each, are illustrated in Figure 1.
At the most general level, innovation management is concerned with the industry in which a given company operates. An industry consists of a company's competitors, and we will explore how to identify key forces in a given industry. For instance, velocity, or the speed at which innovations occur, varies greatly from industry to industry. We will examine the implications of this fact for general managers. Another important industry-level consideration for general managers is the timing of introduction of innovations. We will review the advantages of being first and of holding back, and see how some industries favor first movers while others favor those who adopt the inventions of others.
At the level of the company, general managers need to be concerned with identifying strengths and weaknesses, and with capitalizing on the strengths while minimizing the weaknesses. With regard to innovation, they need to have an objective view of how disposed toward or biased against change their own company is. We will examine organizational culture, and see how a company's shared assumptions and beliefs influence its capacity for and propensity toward innovation. We will also review the concept of core competence, and show how it relates to culture and how it can enhance a company's efforts in the area of innovation.
Levels of Innovation Management and General Management Concerns
Level of Management Major Concerns Industry Major industry forces Innovation speed First and second mover advantages
Company Culture Core competence
Individual Innovation Choice of innovations Development process Speed to market
Finally, at the level of the individual innovation, we will examine the implementation process within companies. Here the general manager's role is more to oversee and coordinate the work of others, from choice of innovations, through development of the new product or service to commercial introduction. We will examine the overall need for speed to market, and ways that some firms achieve it.
What we will see throughout the sections that follow is the task of the general manager with regard to innovation. It sometimes involves change in the way his or her company innovates. At other times it involves identifying existing elements of a company which favor certain kinds of innovation and argue against others. …