Managing Innovation: A Process View

Sachin Gupta, Co-Founder & CEO, HackerEarthIf any business leader is asked to describe the word ‘innovation’,what word would they use? How will they define its place in the organization? The very thought of defining innovation may seem intimidating. Is innovation simple? No. But innovation is not complex either. Often when we hear the word innovation, we think of some vague concepts which have no structure, are complex, and is vast. But the reality is the exact opposite. Innovation is just as uncomplicated and as essential as any other core business function. To put it in perspective, consider another core business function, such as finance, sales or marketing.

So, what is Innovation?

Right now, innovation as a business process is at the same place that manufacturing was half a century ago. Everyone is talking about innovation, CEOs and managers know that innovation is a priority, and most companies want to innovate but they don’t know how. Similarly, customer service, which was, for long, thought of as an art, is increasingly getting construed as a science. An increasing number of companies are getting systems and processes in place to measure and manage their service levels, and then there are trainers and external consultants that bring the desired level of change. Why should innovation be any different?

Research by strategy&, published as Global Innovation 1000, has time and again shown that firms which treat innovation more of a science than as mere art are more adept at innovating. Similar, the ten years of investigating the world’s most innovative companies by BCG suggests that even large firms can manage to rule the roost, provided they manage innovation well. Else, innovations should increasingly become the realm of startups, which is not the case, as also corroborated by the innovation rankings by MIT Technology Review, FastCompany, and Forbes.

The IDEO process

It appears that successful companies manage innovation in the same way in which they manage most other functions. In a proverbial ‘standing on the shoulder of the
giants’ act,let me borrow the process map of innovation from IDEO, the world’s foremost design outfit, to bring home the point.

Companies must invest in market research, usability research, case studies, focused groups,and several other ‘techniques’ to gather and assimilate insights

It all starts with ‘Discovery’.In the context of innovation, it is to realize customer pain points, hidden opportunities, unseen patterns, or sheer unresolved constraints. This discovery calls for a trained eye and a bias for action that leads to fresh insights. Companies must invest in market research, usability research, case studies, focused groups, and several other ‘techniques’ to gather and assimilate insights.

Next comes ‘interpretation’, which is to map the several potential problem areas or opportunities to those which the focal firm is adept at addressing. Remember the famous response Henry Ford got when he went about asking people on what did they want, and they said, ‘a faster horse-cart’. The way Ford interpreted their statement changed the course of the history, and he delivered an affordable car made through the famous assembly line and driven by the principles of modern management and workflow. That’s interpreting the pain point on possible avenues of intervention

Only after a good understanding of the customer pain areas, and what is in for the company, the team goes about generating ideas. Remember, ‘ideation’ is not the starting point of innovation, it is, in fact, the third stage! So, good innovations don’t come from innovative ideas; they come from genuine problems. Another virtue of ideation is that quantity matter over quality. Once again, the platform, tools, and methods of generating and capturing ideas come in handy

Next is ‘experimentation’, which builds on the dictum of the innovation which is to ‘fail faster to learn sooner’. Experiments must be economical and should have been ‘designed’ such that one learns something tangible from those experiments. Here again, simple techniques, ranging from clay modeling to mock-ups on the Internet, can help save time and money while offering invaluable insights and ratification to ideas

Finally, the approved ideas and those verified by the customers get to see the light of the day and evolve thereon

As depicted in the text, each of the stages of the innovation process offers avenues for leveraging technology to both lessen the time and cost, and hasten the learning. Techniques from management, process design, technology adoption, and managing talent, all come in handy when it comes to innovation.


Just like manufacturing, in the future, companies will have adopted innovation as a core function of the business. Innovation will have its own budget, human resources, plans, and portfolios. Companies will be able to attribute revenue or cost savings to ideas they implement. While some companies are already there, many hesitate to take the first step because no one within the organization knows precisely what innovation is. Take some time to define innovation and you can take the first step towards making innovation a core business function today.