SCMIS 2007

Professor John Bessant

Meeting the strategic innovation challenge

Innovation matters -- if we don't change what we offer the world (product/service innovation) and the ways in which we create and deliver those offerings (process innovation) we may not survive and we certainly won't grow. So far, so obvious. The challenge for all but the most blind firms is not whether or not to innovate, but how ? Although it looks easy in the cartoons -- the Eureka moment, light bulb flashes above the head and away you go -- in reality it's a complex, risky business, trying to balance creativity with control and direction. Anyone can get lucky once -- the real skill in innovation is being able to repeat the trick, building an organization which can deliver a regular stream of new and improved products, services and processes. The trouble is that even if we do manage to deal with that challenge, the game keeps changing – new technologies, new markets, new competitors, even new rules for the game. Although we can learn from the past, the challenge of the 21st century is to master a whole new set of innovation rules. Not for nothing do researchers talk about innovation management as a dynamic capability.

Perhaps the key to effective innovation management is going to be developing ‘spaghetti skills' – building and running complex and rich networks along which knowledge flows. The logic of open innovation is that organizations need to open up their innovation processes, searching widely outside their boundaries and working towards managing a rich set of network connections and relationships right across the board. Innovation increasingly becomes a corporate wide task and one which extends beyond the boundaries of the enterprise. So the people with skills and experience in creating and managing relationships and networks on an inter-firm basis could play an increasingly significant role. This puts purchasing and supply professionals centre-stage in the emerging innovation agenda.

But seizing these opportunities and playing a strategic role within the new world of open innovation also poses some challenges. In particular, the role has to be recognized and supported – and to enable this firms need to raise their innovation game and update their mental models about how the process works. They need to understand the increasing emphasis on networks, connections and relationships – and that the skill set of procurement professionals could be of strategic importance. Beyond this there is a need to enhance training and skills development - not only to build an understanding of innovation and its management amongst procurement professionals but also to extend and deepen their skill set around finding, forming and getting new relationships to perform.