The Innovation Value Chain and Product Management

Morten T Hansen and Julian Birkinshaw published an interesting article in HBR about what they call the Innovation Value Chain.
The article highlights the three main phases of innovation:
*Idea Generation
*Idea Conversion
*Idea Diffusion

Idea Generation:
The aim is to generate ideas from various sources: from with in your own business unit of team; from other business units or teams; from across the company; from customers; end users; competitors; universities; related industries and the list goes on…

Idea Conversion:
The list of new ideas need to be appropriately screened and categorised to determine the degree of technical difficulty to develop in terms of engineering time and resources verses the commercial return on developing such a product or new feature. It could be that the new idea will not bring the company or business unit direct commercial success but will help the company enter uncharted territory or, if a new feature, help maintain the products competitiveness due new developments in a rival product.

Idea Diffusion
Hansen and Birkinshaw state that “Concepts that have been sourced, vetted, funded and developed still need to receive buy in” from various internal and external stakeholders.

The key to the article is that a company's ‘innovation value chain’: idea generation – conversion and diffusion is as strong as the chain's weakest link. Hansen and Birkinshaw suggest that companies need to identify where the weak links are and either create new roles for employees to help strengthen the link – and/or when hiring new candidates seek those who will be able to address weakness in their ‘innovation chain’.

I would say that a company with weakness in it’s 'innovation value chain' needs to either review it’s product management team and come up with a plan to strengthen the product management role or consider adopting product management as a new function with in their company.

Also read:
How Product Managers can avoid innovation traps #part 1
How Product Managers can avoid innovation traps #part2

1 comment:

  1. I see so many organizations look at Innovation from just the perspective of creativity, but as you and the HBR article notes, creativity is only one aspect of Innovation and there is a value chain to achieving innovation. Product Management plays a very important role in the Innovation Value Chain and I would agree with you that if there is weaknesses, look at Product Management.