How to Manage Innovative Processes In Your Business

2023.01.01 10:24 PM By Joshua Taddeo, Principal Consultant
implementing innovative business process improvements

Every organization needs to grow and adapt to its surroundings. It won't succeed without this, especially if competitors are developing in the market. Simply put, your business might not survive if it doesn't change to meet customer demands. An innovation process can help in this situation. The best avenue for growth can be found in your business with a solid innovation process. 

Taking this approach will minimize risks, increase customer satisfaction, and increase the chances of your business succeeding. Read on to discover what process management is and the role of innovation in the strategic management process. Furthermore, you'll learn how to manage internal innovation processes business to drive growth in your business. 

What Is Innovation Process Management? (IPM)

Innovation management, or an innovation management system, involves managing new ideas from ideation through implementation. Four steps are involved in this approach: 

  • Generating - Exploring hidden concepts through brainstorming and employee input.
  • Capturing - Putting ideas into a format that can be easily shared.
  • Evaluating - Analyzing and critiquing innovative ideas.
  • Prioritizing - Select the innovative ideas that will be executed in your organization to maximize time and resources.

Your organization generates significant value through the management of innovation, and high-level business targets inform it. As your business vision and problems emerge, certain actions and practices will result from your innovation. A collaborative environment and excellent employee communication are essential for effective innovation management processes.


An organization's strategy determines how it plans to achieve long-term success. It's important to understand that strategy is ultimately about choosing between several feasible options to maximize the chances of success, and this choice shouldn't be separated from execution. In essence, innovation is simply a means to achieve your strategic objectives. Innovation and strategy are closely related, but their link is quite extensive.

To achieve your strategic goals, innovation is one of the means. Occasionally, 'accidental' innovation can reveal unrivaled opportunities that can justify a complete rethink of your strategy, but such opportunities are quite rare and virtually impossible to prepare for. Therefore, the key to innovation is to align your activities with your strategy, which, however, is not always an easy task.

team reviewing goals and objectives

The organization must have enough freedom to innovate, but you must also take certain practical constraints into account, such as your strategic focus, available resources, and capabilities. Providing the organization with sufficient freedom to innovate is essential, but practical constraints must also be considered. Compared to SpaceX, a catering business with virtually no cash and only two employees is much less likely to develop new rocket technology innovations. Even though this is an extreme example, the point is that it's the management's job to direct innovation to areas where it can be more successful and useful.

To improve innovation, all aspects must be considered, which is why there is rarely a straightforward solution. Being able to understand both the big picture and the individual components of innovation is imperative if you want to manage innovation effectively.


The key to this is governance. Many innovations will likely be smothered if every new innovative initiative must follow the same chain of command and go through the same process as minor changes to the existing organization. Innovative teams need to move quickly, adapt to their environment, and make decisions independently of the organization's traditional ways. You shouldn't impose the same rules and business processes on everyone in your organization. Innovating does not work based on the economics of scale.

Building so-called ambidextrous organizations is a popular approach to creating an innovative organization. By this, we mean that the organization is structured to allow new businesses to operate independently. The structure of an organization can also reinforce (or erode, if done poorly) the culture of that organization. 

Change management

Change management enables the organization to acquire capabilities related to people if structures allow the efficient use of capabilities. Recruiting and retaining the right employees will be much easier if the organization has a pro-innovation change management system. A pro-innovation change management approach encourages the right behavior and discourages the wrong one. An organization's culture can make a huge difference in its innovativeness due to its cumulative effects. An innovative culture possesses the following traits:

  • Insists on constantly improving
  • Speed, learning, and experimentation are important to him
  • Creates anything new with the acceptance that failure is a normal part of the process
  • Rather than following a chain-of-command approach, it focuses on vision and culture


discussing change management strategy for innovative processes

Change management enables the organization to acquire capabilities related to people if structures allow the efficient use of capabilities. Recruiting and retaining the right employees will be much easier if the organization has a pro-innovation change management system. A pro-innovation change management approach encourages the right behavior and discourages the wrong one. An organization's culture can make a huge difference in its innovativeness due to its cumulative effects. An innovative culture possesses the following traits:

  • Insists on constantly improving
  • Speed, learning, and experimentation are important to him
  • Creates anything new with the acceptance that failure is a normal part of the process
  • Rather than following a chain-of-command approach, it focuses on vision and culture

Performance Tracking

The innovation metrics measure how effectively a business develops and improves to maximize profitability. You can use innovation metrics to determine if your strategies and activities are delivering effective results. It's possible to hold employees accountable for meeting goals, analyze the success of campaigns and product launches, and allocate resources to improve the company's success by measuring innovation.

Types of innovation metrics

The following types of innovation metrics are commonly used:


An organization's financial success indicates whether it generates enough revenue to be profitable. Additionally, this can help you hold teams accountable for their spending and budgets. You can analyze financial metrics to determine how much each department spends compared to profits earned. Regular reevaluation and adjustment of budgets are possible as a result. A company's return on investment can be better tracked by measuring the following financial KPIs:

  • Money spent on product development, launches, and marketing
  • Performance and revenue of teams based on budgets
  • Product sales, advertising, and profit numbers

New product

You can track the profits a product or service brings in after it is launched and compare them to the profits previous launches generated. This will allow you to evaluate what changes were made to the launch that caused different revenue results, such as better product features or advanced marketing campaigns. The flow of your team's new product releases and ideas can also be tracked. For instance, some companies measure the number of ideas generated during brainstorming sessions versus those from external sources, like customers or competitors. By identifying where your stronger ideas originate, you may be able to develop more impressive product ideas in the future based on these resources.


It is important to regularly implement training opportunities to ensure teams consistently produce impressive products. This can encourage team members to submit valuable work and improve their skill set. The budget for employees' continuing education or attending training seminars should be tracked. It is also possible to implement various software systems or communication platforms that can improve employee collaboration and increase efficiency and productivity across the organization. You should train your employees on these software systems and track how well they improve efficiency with innovation metrics.


Using timesheet metrics, you can determine which projects, tasks, and activities employees spend most of their time and energy on. By evaluating these metrics, you can determine which tasks to outsource or reassign to other team members to decrease employee time on smaller, more administrative tasks. By doing so, employees can devote more time to larger, innovative projects, leading to more product launches, campaigns, and efficiency strategies within the organization.

Management and leadership

A leadership team that encourages and inspires new and creative ideas is an effective way to foster innovation in an organization. Team leaders' engagement and involvement in launching new products can be measured. Assisting with campaigns and product development can give you a better understanding of their effectiveness on new projects. Managers can also evaluate how effectively they motivate employees by implementing and overseeing growth initiatives.

Processes for innovation management

When it comes to incremental innovations, the processes presented in this article are usually a good starting point but may not always be applicable if you're looking for disruptive innovations. Let's look at the most common innovation and operations management processes. Here are some of the most typical processes for managing innovation:

  • Push vs. pull
  • Phase-Gate Process
  • Lean Startup Model

Push vs. pull

There are two types of innovation management processes: push-based and pull-based. Pull-based models for managing innovation are more customer- and market-driven, whereas push-based models are more internally and technologically focused. In other words, 'technology push' models are those where the product or service is at the center of innovation, usually driven by internal R&D activities. In contrast, 'market pull' models aim to find (and meet) market needs.

Market challenges are the main difference between push- and pull-oriented models. Most push-oriented organizations already know the challenges and users (or at least presume to be aware of them). Additionally, they are exploring new technologies to address these challenges. Historically, Apple and most pharmaceutical companies have been push-oriented.

There are also many tech start-ups working hard to create technological inventions to solve problems requiring such an approach. On the other hand, pull-oriented organizations are often focused on listening to customers and learning from them to stay on top of changing markets and customer demands.

Phase-Gate Process

Product innovation is probably most famous for the Phase-Gate process (or "Stage-Gate," also known as "the waterfall" under certain circumstances). In addition, Phase-Gate is implemented in several industries by companies of all sizes and belongs to the 'technology-push' side of the matrix. Idea development is mainly used to reduce project uncertainty and cycle time in developing new ideas and often works best when the ideas are similar. As a result of this roadmap, the innovation process is organized into small, more manageable stages, providing a common set of standards, which adds clarity to a process that is often fuzzy.

As an example, here's what it would look like:

  1. The discovery stage involves discovering innovation and screening the initial idea.
  1. Having passed the first gate, the scope is defined, and the improved idea is screened again.
  1. After a business case has been built, the innovation moves to the development phase after the scope of the idea has been accepted.
  1. The development of the innovation continues in the fourth phase, followed by its testing.
  1. A final innovation is launched to market after it has been validated based on predefined criteria, followed by a post-launch review.
project management and innovative management system

Lean Startup Model

People who oppose phase-gate believe that the best innovations come from simply providing smart people with enough time and resources to make their ideas a reality. Since most processes fall between these two, let's discuss another model that has become popular recently, the Lean Startup, which is closer to the left, less formal side. Despite not being explicitly labeled as an innovation management method, Lean Startup is designed to achieve almost the same goals as, for example, the phase-gate method.

A Lean Startup is much more pull-oriented than a phase-gate approach and quickly addresses market risk and customer demand to find product market fit. Rather than focusing on launching a complete, final product, the Lean Startup model promotes finding the customer need and promoting speed and urgency to avoid wasting resources on something that isn't of interest to them. This model focuses on testing and validating assumptions about product-market fit and the related business model as quickly as possible to learn and adapt quickly.

Build-Measure-Learn Feedback Loop

Build-measure-learn is the main component of the Lean Startup Model for developing and testing new ideas. To gain experience and gather feedback, the Build-Measure-Learn Feedback Loop aims to launch a new idea or concept quickly to the market. Rather than testing an existing product, you should start by testing the value proposition and assumptions regarding your product's demand instead. Continually testing and developing the previous version of your product after you have validated your idea. Using this loop, you can validate your ideas and learn where to focus your efforts without investing much time, money, or resources.

Minimum Viable Product

It's a version of your new product used to collect as much validated learning as possible about customers with the least effort possible. Essentially, it's a basic version that will provide enough value for potential paying customers to provide feedback.

Often, it's cheaper and faster to test whether the product or business model should be built. If it should, you can decide what to do next. In other words, MVPs are the smallest products that complete the build-measure-learn loop. It's important to focus only on building the features that you think will add the most value to your customers, set you apart from your competitors, and then test them out.

Management Styles for Different Types of Innovation

Each type of innovation has its own benefits and disadvantages for your company. For these types of innovations to succeed, different management styles are required. 


Disruptive innovation is exemplified by the iPhone. It involves using technologies or developing alternative solutions that are new to your company and, quite often, new to the market. The first iPhone created a new category of smartphones - the touchscreen smartphone. When it was released, it surprised other companies and the consumer market, giving Apple a significant advantage.

Disruptive innovation, however, requires managers with a high-risk tolerance and the ability to balance investments in innovations with the maintenance of existing operations.

discussing business process improvements


A sustained innovation approach seeks to improve current processes without investing too much time and money in reinventing the wheel. This type of innovation fits well with managers. Those who take a proactive approach to innovation. An in-depth understanding of their market. It's obvious their customers' problems and how to solve them; the only question is how to do it most efficiently.

Challenges to Innovation Management

You will face roadblocks both internally and externally in managing innovation. 

Top-Down Management Frameworks

Any company seeking to innovate will face challenges due to old-school management frameworks such as "top-down." Even ten years ago, the world was very different when many management systems were developed. When it comes to progressive ideas, it's better to promote a "flat" company culture instead of following the traditional path. Transparent communication ensures that great ideas don't get squashed before they have a chance to contribute value to your business.

Culture Lacks a Growth Mindset

Company cultures that believe "things are fine as they are" and cultures with a growth mindset differ markedly. A growth mindset in your organization will filter down everything you do. It may be that your employees lack motivation to work on themselves (continual learning) or your product offerings. Your marketing team must do the same when looking at your target audience. In your organization, make it clear that a growth mindset is necessary, not optional.

Poor Infrastructure 

Innovating is crucial to your company, no matter how much lip service you give. While a top-down approach can sometimes be unfavorable, it is still the C-suite's responsibility to offer them the resources, technology, and opportunities to be innovative.

No Strategy

Without a clear goal, most of your efforts will likely be wasted. A business without a strategy is doomed to failure. To achieve innovation, a company needs a strong management team and skilled team members who share its vision. A strategy allows teams to optimize resources and direct their creativity toward finding solutions to issues. If your efforts do not serve your higher business goals, they waste time and money.

holding smartphone for video call team meeting

KPIs for Measuring Innovation

Measuring is key to managing. Innovation is difficult to measure, however. Here are the key performance indicators that allow you to organize and more effectively measure progress:

Input Metrics

An input metric is quantifiable information about your innovation management process, such as the percentage of your R&D budget spent on innovation. The fact that you have input does not necessarily mean that you are getting the results you want from the innovation. 

Output Metrics

You can measure output metrics by observing actual, quantifiable results. It is an output metric when you introduce a certain number of new products to the market over a certain period. A second example is your innovation process's amount of new revenue generated. The cost savings you can achieve by enhancing business processes are also measurable and allow you to track your progress.

Why Innovation Management Matters

Business innovation is critical for one simple reason: it adds value to the organization. You must continually innovate and improve your business if you want it to thrive. To improve a company's profitability, organizations must identify what processes, products, or services can be improved, such as forming new partnerships, outsourcing specific tasks, or implementing new technology.

The McKinsey global survey found that 84% of executives believe innovation is extremely important to their company's growth. To achieve this growth, businesses must formalize their innovation process, negotiate with stakeholders, find the right talent, collaborate with interdepartmental teams, and integrate innovation into their long-term plans. Innovation management can be helpful in these situations.

There are many benefits associated with innovative process administration, some of which include:

innovation management process

Promotes Employee Engagement and productivity

The innovation process promotes an 'out-of-the-box' approach to thinking. Encourage your employees to pitch in their creative ideas when developing an innovation strategy, allowing them to showcase their talents and go the extra mile to make a difference. By feeling valued and belonging, employees will be more engaged. Additionally, when your employees work on something different from their regular projects, it eliminates the mundaneness of the equation, thus increasing their productivity.

Fosters inclusion and diversity

Globalization and remote working have enabled firms to hire the best talent across geographical boundaries. In other words, your workforce consists of a mix of cultures, races, generations, etc. Every employee has the opportunity to voice out his or her ideas when you embed the innovation culture.

The best ideas can come from anyone, be it a gen-z, a millennial, or someone from an underrepresented community. Due to this, innovation is not influenced by race, gender, or label but by sheer talent, thus promoting inclusion and diversity.

Maintains competitive edge and generates more ROI

Software for advanced resource management is a prime example. Without an analysis of the client's needs and requirements, product-based firms would be using primitive tools. As a result of this breakthrough development, they could gain an advantage over their competitors. By instilling a culture of innovation in the workplace, you will be able to attract customers with unique features or new products. As a result of meeting consumers' demands and offering a product that stands out, your client base will increase, thereby increasing your ROI (Return on Investment).

Improves business performance

To evaluate a business's performance, individual metrics are evaluated, such as increased customer retention, employee performance, profitability, competitive advantage, etc. To improve business performance, each of these factors must be addressed. Your business performance can be improved by implementing outstanding ideas.

Enhances quick problem solving and project performance

Innovative thinking can be applied in various facets of business by being creative and different. Project management is one of these sectors. Consider the case of developing a website. The design does not meet the client's expectations due to certain factors. You will likely run into a wall of new ideas if you only allow one graphic designer to see the design or one content writer to see the landing page content. 

managing new business processes and new technology

Alternatively, if the entire team collaborates, everyone will be able to understand the client's requirements differently. Additionally, you can develop a solution more quickly as a team once everyone pitches their ideas and brainstorms. Thus, encouraging innovation also has its benefits in project management.

Wrapping It Up 

Innovation management should be on your radar if you want your business to succeed. It could lead to a lack of direction in your innovation efforts. Therefore, you may not be able to grow and develop your business effectively.

If you need help in developing your innovation process, Universal Creative Solutions offers operations consulting to help your business grow. We look at market trends and analyze your business data to determine where innovation can occur. From there, we implement an organizational framework to help you install innovations into your business to gain a competitive advantage over your competitors. Schedule a free consultation call to learn more.