Management control in radical innovation

Approximate reading time: 2-3 min. A study sought to explore whether, how and why different approaches to management control in radical innovations are more intensely employed: (1) in different phases of the radical innovation process, and (2) in innovation projects showing different degrees of radicalness. Case studies concerning four innovation projects (two radical in nature and two incremental) implemented by two companies operating in the home automation industry in Italy were conducted. The study has valuable managerial implications. The recurrent features in the two cases may provide practitioners with a useful benchmark about management control of radical innovation projects.

 

management control in radical innovations

 

 

For instance, it is interesting to notice how codes of value and corporate culture represent the main “control” lever in the early stages. Therefore, how important it is to spread a common innovation culture all over the organization. This to orient all the resources to the identification of innovative areas.

Second, evidences highlight how relevant is the R&D-marketing interface, and how it can evolve along the project. Even the most innovative projects, in both the companies, require a preliminary demand analysis and forecasting to overtake the first project gates. This implies that radical innovation should not be a purely technology-driven process, especially as market uncertainty increases.

More in general, the case histories suggest the great importance of information sharing among the functions. The study also shows the need to properly develop interface structures between the involved functions to favor it. In fact, the immediate sharing of common objectives of the innovation projects, through a systematic involvement since the early stages of both the technological core (R&D, operations, etc.) and the commercial area (marketing, sales etc.), makes it possible to timely reveal unexpected constraints. This may have beneficial effects on time to market, innovation rate of success and project costs.

 

Conclusions for management control in radical innovations:

  • Spread a common innovation culture all over the organization
  • Develop interface structures between the involved functions
  • Set up common objectives of the innovation projects
  • Systematic involvement of both R&D and marketing areas in the innovation projects

 

References:

Chiesa, V., Frattini, F., Lamberti, L., Noci, G., 2009. Exploring management control in radical innovation projects. European Journal of Innovation Management 12 (4), 416–443.

Available at: http://www.emeraldinsight.com/doi/abs/10.1108/14601060910996909

 

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