Management of Multiple Innovations

Management of multiple innovations is a significant phenomenon due to high demand on firms to introduce something radical rather than solely focusing on incremental advancements or improvements over time. Innovation can be an essential source of maintaining sustainable competitive advantage (SCA). Therefore, the power of innovation leads to its’ importance in strategic management. Importantly, management of radical innovations is given more attentions since it is perceived as critical to the long-term survival of many today’s firms. In addition, management of radical innovations requires management techniques different from those used in management of incremental innovations. Despite, when it comes to understanding what hinders and what enhances innovativeness in the firm, it is better to look at multiple innovations radical and incremental innovations. After analyzing articles by McDermott, C. M. (2002), Brown, R. (1991) and Damanpour, F. (1991), it is can be suggested that managerial attitude toward change is essential to effective innovation in the firm, while centralization hinders innovation. But when analyzing the characteristics that enhance or hinder innovativeness of the firm, it is useful to analyze whether the firm is for-profit or not-for-profit, manufacturing or service, in order to better understand the characteristics. In addition, Damanpour (1991) suggests considering the scope of innovation while analyzing determinant-innovation relationship, due to increasing practice of multiple innovations in today’s firms. Finally, it is interesting to discuss whether particular innovation is regarded as radical or incremental by the firm or the market. The following figure shows the S-curve of innovation and small S-curves for each market:


What these small S-curves shows is that the firm should consider that each segment should be treated solely while moving upwards or enlarging market size by entering others segments after the product has reached its limit on the small S-curve. Another important point here is that company may regard this innovation radical first when it is introduced to the market and then, view it as incremental since it advances the product for each segment. While each segment may perceive the innovation radical since it enters into new “market”. For example, first calculator was big and was mainly designed for scientists. Then, it was advanced and with less size for accountants. Consequently, pocket size became attractive for public use, particularly at schools. This example shows how a firm might treat each segment by moving upward, whereas entering directly to the mass market (public) might result in failure. Mainly due to the fact that public may not know how to use the product or why it is useful. At last, analyzing small S-curves in that figure may suggest that after firm introduces radical innovation and the first segment accepts it, then entering into another segment may be less risky and less uncertain. The following figure shows how risk is moving down, which is in agreement what I have said earlier about the perception on radical vs. incremental innovation.


To summarize, management of multiple innovation is very important for the firm’s SCA and for understanding the determinant-innovation relationship. At the same time, analyzing diffusion of innovation with small S-curves may lead to risk and uncertainty reduction. Also, firms may find it useful while avoiding entering mass market and focusing more on each segment.

REFERENCES:
Brown, R., (1991) Managing the “S” Curves of Innovation. Journal of Marketing Management Vol 7. pp.189-202

Damanpour, F., (1991) Organizational Innovation: A Meta-Analysis of Effects of Determinants and Moderators, Academy of Management Journal, Vol. 34, No. 3, pp.555-590

McDermott, C. H., O’Connor, G. C., (2002) Managing radical innovation: an overview of emergent strategy issues. The Journal of Product Innovation Management. Vol.19. pp.424-438