competing in the innovation pentathlon - cranfield school of.docVIP

Competing in the innovation pentathlon by Keith Goffin Professor of Innovation Management and Rolf Pfeiffer Manufacturing companies and service providers alike need to become more innovative, but first of all they need to understand what innovation is, as well as how to manage and nurture it. Research has shown innovation management requires performance in five areas - just like a pentathlon. Increasing international competition is forcing many manufacturing companies to look for ways to become more innovative. However, improving the performance of a company in this area is a real challenge. For example, UK companies are often criticised for having good ideas but not bringing them successfully to market. Whereas in Germany, there has been extensive public debate on whether high labour costs are reducing competitiveness, and innovation is seen as the most effective way to counter this. However, a major new study has found that managers in both countries are facing remarkably similar issues. In the study by Cranfield School of Management and the Export-Akademie Baden-Wurttemberg in Germany, data on innovation performance were collected from nearly 200 companies in the electronics and engineering sectors in Germany and the UK. Detailed case studies were conducted at 16 companies and over 80 managers were interviewed. The study revealed some of the key issues in managing innovation. Diagram 1: There is more to innovation than new products D leading companies look for contributions from other areas. Issue 1: Misunderstanding the role of innovation Many organisations perceive innovation as being synonymous with inventions and breakthroughs. The danger is that RD is then seen as the only department directly responsible for innovation with the focus solely on product innovation. However, companies need to drive all forms of innovation (Diagram 1). For example, the key role of process innovation as a source of competitive advantage is often overlooked (see box - Process In