Understanding process innovation

The need for innovation

Competition in global contexts has increased the pressure for new and efficient processes. As a result, there has been increased attention on the ability of organisations to build new processes.

Despite the popular focus on product innovation, research suggests there are good reasons to believe that much of the impact of open innovation happens behind the scenes and is not always directly evident in the final offering to the customers.

Technology in supermarkets

For instance, the technology used to manage the supermarket experience, eg the automated self-service tills, is often developed by suppliers, and the need for it often comes from customers.

The motivation of organisations

Our research has found that different levels of engagement with external parties, such as customers, suppliers and universities can increase the ability of an organisation not only to introduce new products but new processes as well.

Such levels of engagement are also affected by the motivation of organisations to be seen as complying with legislation – where legislative change may impact process change.

Open innovation activities

That is when an organisation engages with open innovation activities and is motivated to be seen as legitimate, then their ability to introduce new processes increases. This may sound confusing, but its meaning is relatively straightforward.

One of the key motivations for organisations to introduce new processes is to do things more efficiently. Yet, this is not the only one.

Financial organisations

Financial organisations often introduce new processes to comply with legislation. Similarly, multinationals adopt codes of ethics to ensure that their processes comply with accepted ethical standards. These are often referred to as institutional forces and explain how some organisations behave when profit maximisation or cost reduction is not the only motivation for action.

When such institutional forces are combined with efforts to cooperate with external parties then the ability to introduce new processes increases.

There are several takeaway points from this research:

1) The impact of engaging with open innovation on the introduction of new processes

Process and operations managers often find themselves under pressure to make their processes more efficient. Looking externally for ideas, technology and research and development (R&D) can clearly help find solutions to this ongoing problem.

2) The timing of cooperation with innovation partners

You will often find yourself in situations where a new management system is being implemented or a new supplier is being sought. Doing the two at the same time or at least close together will increase the ability to introduce a new process.

3) The link between open innovation and service delivery

As a customer’s experience when going through service is determined by the design of the process, this research indicates that engaging with open innovation can improve overall service delivery as well.

Further information

There are publications out there that suggest open innovation occurs more in processes than products.

Here’s a good example, which you may like to take a look at:

Tsinopoulos, C., Sousa, C. M. P. and Yan, J. (2018) ‘Process Innovation: Open Innovation and the Moderating Role of the Motivation to Achieve Legitimacy’, Journal of Product Innovation Management, Vol.35(1), pp 27-48.