Question

Describe the process of decision making and innovation? How do companies keep the balance of managing risk while continuously innovating? What is the role of external contacts for innovation?

Answer 1

The process of decision making invovles various steps and they are:

(i) collect more and better information about markets and firm capibilities.

(ii)Accumulate and draw on their own or others experience.

(iii)recognize and reduce bias and error in judgement..

Acquiring the innovation managment

innovation managers exhibit certain skills attitudes that allow them to effectively gather abd assess information.The key to acquiring the innovation management is experience.This includes both quantity and quality of experience.

Innovation Ambition Levels

Core ambition includes initiatives that are incremental and enhancement to core offerings such as new additions.

Adjacent innovation ambition these expand the exsisting business by leveraging what the business already does.

Transformational innovation ambition represents those viewed as breakthroughs of enitrely new offerings.

Challenge

Balancing the mix of core,adjacent is one of the keys to successfully managing risks associated with innovation.Sometimes companies fail to realise that they have to approach the management of risks associated with transformational innovation.The pressure to have a sound risk managment system surrounding innovation is heightened given recent trends that include but are not limited to:

• Market exepectations
• Global expectations
• volatility in structural change

External Innovative Imperative

Comapnies have long incorporated external innovations through a variety of mechanism including acqusitions,partnerships,joint ventures and licensing.But the technical basis of so many innovations today has increased both the need to access new technologies and capabilities from outside of the company and the variety of models for doing so,including corporate venture capital,accelerators and innovation labs.Companies have rediscovered models for external innovation and have ventured backed startups that have disrupted multiple industries.