The Organisation for Economic Co-operation and Development (OECD) published the first edition of the Oslo Manual1 in 1992. It is a document that states the fundamental concepts that help to measure and understand the phenomena that lead to innovation. For example, it mentions scientific, technological, organizational, economical, and commercial tasks that may contribute (actually or potentially) to innovation. The manual suggests as well that there are, in relation to the company, internal and external factors that affect, positively or negatively, innovative development.
This manual defines organizational innovation as «the introduction of a new method of organization applied to the business practices, work, or external relations of the company»; and adds: «organizational innovations can improve the quality and efficiency of work, stimulate the exchange of information and increase the capacity of the company to learn and use knowledge and new technologies».2
The knowledge of how an organization is structured and how it operates in relation to innovation leads us to fulfill the need of adding the different elements that constitute an administrative process, or, in other words, innovation management (IM). This is the planning, organization, direction and control of activities. It considers as well the organization’s human, technological and financial resources that allow and stimulate the generation of new knowledge and ideas that lead to the development of new products, processes and services, or even allow to improve products, processes, and services that already exist in order to transfer that knowledge to all the areas of activity in an organization.
The very definition of IM sheds light on how this management can be implemented inside an organization. It is clear that a work environment must be created that, within an ethical framework, favors the emergence of new ideas, and that the people who generate these ideas are credited adequately if their ideas were transformed into innovation. It is necessary that the information flows where it can be applied and, thus, be available for those who need it. Moreover, it is top priority to have updated manuals and documentation about the processes.
Once an idea has been identified that can be turned into innovation, it is necessary to translate it into a project in which the expected results are clearly defined, who will carry it out, in what time it should be finished, and, very importantly, how much it will cost.
As we already mentioned in our previous entry Need for Innovation: Facing Extraordinary Circumstances, innovation is an economic phenomenon and must be reflected in the market; therefore, the end goal of the IM process is to apply the product generated by the project, and, in consequence, allow us to obtain a competitive advantage in the market.
Innovation management is an important tool in the arsenal of resources that 21st century companies have at their disposal to face the challenges presented by the global economy.
1 Organisation for Economic Co-operation and Development, OECD proposed guidelines for collecting and interpreting technological innovation data —Oslo manual—, Paris, 1992.
2 Ibid, p. 154.