*Innovation units encompass all organizational units involved in the development of new product/market combinations, e.g., R&D and product development departments, innovation management, innovation labs/hubs, digital labs, corporate venturing units, incubators, etc.
In today's uncertain and dynamic business environments, innovation has evolved from a nice-to-have add-on to a strategic imperative. Established companies must continuously renew their competitive advantages to adapt to rapid environmental changes and maintain their strategic fit.
To achieve this, innovation departments must unlock a continuous pipeline of strategically relevant new product/market combinations and business opportunities for future profitable growth. However, existing innovation units are rarely organized to deliver such strategic value.
Traditional integrated innovation functions such as R&D or product development mostly focus on incremental innovations within existing product/market categories. Modern separate innovation units such as innovation labs, hubs, or corporate venture builders overcome this limitation and mostly focus on radical or disruptive innovations. However, their separation from the core business hinders the use of the existing business for the development of future competitive advantages, which usually leads to little commercial success and scalability of the new business opportunities - far from the needs of an established company to build its future on it.
But there is another way: Networked "strategic innovation units" can specifically develop organizationally relevant new business for the strategic renewal of their parent company. To achieve this, they must build and apply a specific set of dynamic capabilities through suitable organizational measures. The following white paper presents the required elements of a strategic innovation management system based on the latest academic research and experience from numerous practical projects in an application-oriented manner.
