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innovation cycle

  1. Challenges with Internal and External Resource Management
  2. Why is it important
  3. What factors need to be considered



Challenges with internal and external resource management

When it comes to innovation, the executive team and their ability or willingness to develop an innovative organization is often the turning point on whether innovation projects are successful.

There are still many executives that either just don’t value innovation or they talk the talk, but don’t walk the walk. This makes is very difficult for those employees seeking to create value through innovation to accomplish their goals.


open innovation


Companies that engage in open innovation can generally be considered as visionary leaders in their fields.  They may lead the way because they see new openings or it could simply be that necessity is the mother of invention – they feel pressured by the competition to innovate. Not many companies are natural leaders and since it takes a few years for open innovation to take effect, the real impact of open innovation is yet to be seen in most industries.


TIP: The impact of Internal and External Resource Management in attracting the right partners is significant.



Why is it important?


Open innovation is important, but only if companies are operating with sound business principles internally before they bring in external partners. The better a company handles their existing internal innovation processes, the greater their benefit will be from engagements with external partners. Once a company has an existing internal innovation process that is also capable of integrating external partners, they will be able to attract better positioned external partners.



What factors need to be considered?

Culture change: Many organizations need to change their internal culture.  Organizations that have been used to working solely in-house may find it difficult to accept external contributors.  There may initially be a false perception that the external partnership is due to management’s disapproval of the work being done by the internal resources. Instead, the external partnership is a strategic attempt to increase overall innovation productivity. Organizations also need to embraces a more holistic approach to innovation internally.  They need to engage all business functions in the innovation process; innovation is much more than a new product or technology and it should not be driven entirely by the R&D function.


Skills management: Managers in an innovation-led organization need a strong skill-set.  They need to be good at networking internally and externally, they need to be able to keep the needs of the whole organization in mind, as well as those needs of their department and, above all, they need to be strong communicators.  These skills may be innate for some but even if they are not, they are relatively easy to develop.


Learn from failures: Senior executives should explore how the workforce can become better at learning from failures. The truth is that people and organizations fail more often succeed.  But even a failure can be valuable if the company and team take the time to learn from the failure.  Many failures, in fact, are only near-misses and have a great deal of positive outcomes if studied appropriately.




Building Strategy Based on Resources


If a company has sufficient strength, it will naturally take a competitive position in the marketplace.  Identifying an organization’s strengths helps it to hone its message and use that to gain incremental share.  In some ways, the greatest value in the exercise of evaluating resources is in identifying weaknesses.  For example, if a pizzeria has an excellent product but has a history of poor on-time delivery service, they should not attempt to compete on delivery time, especially if a competitor is successful at meeting a “30 minutes or free” promise.  They should instead use quality ingredients or a specialty oven-type or compatibility with a dietary requirement (e.g. gluten free option) to differentiate their offering.  At the same time, they can find ways to focus on improving the delivery performance by investing more in training or hiring practices but there should be enough awareness that delivery does not become part of the marketing promotion practices for the short term.


Main uses of resources/IP


Below are three clusters of partnership resources that most organizations leverage in innovation related operations: Expertise, Manufacturing and Fiscal. The Expertise/Knowledge cluster relates to the harnessing of knowledge management strategies to build organizational expertise and secure human capital assets. The Manufacturing cluster relates to using infrastructure to strengthen the value chain from procurement to production and commercialization. The Fiscal Asset Management cluster relates to the management of the organization’s the financial assets and the optimization of its intellectual property


innovation map



Persistent shortfalls in meeting company performance targets or weak performance in relation to rivals are reliable warning signs that a company suffers from either poor strategy making or less-than-competent strategy execution, or possibly both.


Other indicators of a company’s successful resource strategy include:


  • Trends in the company’s sales and earnings growth.
  • Trends in the company’s stock price.
  • The company’s overall financial strength.
  • The company’s customer retention rate.
  • The rate of new customer acquisition
  • Changes in the company’s image and reputation with customers
  • Improvement in order fulfillment, days of inventory, and employee productivity metrics.


The stronger a company’s current overall performance, the less likely the need for radical changes in strategy. The weaker a company’s financial performance and market standing, the more its current strategy must be questioned.