A Framework Approach to Measure
Innovation Maturity
M.G.P.L. Narayana
Principal Consultant
Enterprise Modeling Group
Business Systems and Cybernetics Centre
Tata Consultancy Services Limited
Hyderabad, India
ABSTRACT
Innovation is central theme in mission statement of
majority of knowledge economy organizations. It represents
core renewal process in any organization. Competitive
organizations innovate, continuously. But, how are they aware
that they are improving enough? Three important phases arise
when one look at an organization with respect to Innovation in
its entirety, through a cluster of relationships:
Long Term Strategy: Does organization take the strategy
route?
Innovation Phase: Is the organization learning with
respect to Innovation management?
Implementation: Are there effective implementation
mechanisms?
By no means these are exhaustive; however, the answers
to such questions identify a number of ‘archetypes’ of
innovation capability. This approach gives the possibility of a
quick ‘snapshot’ to focus attention and create the commitment
to improvement. Benchmarking can help learning in several
ways- in particular it offers a powerful motivator for change
since unfavorable comparisons are hard to ignore. Perhaps the
most valuable component of benchmarking is its use as a
framework for structured review and reflection on how the
organization currently performs.
One such framework to benchmark software development
processes is SEI’s CMM (Capability Maturity Model). This
framework presents architecture of a five-step ladder to climb
in order to reflect the improving capability maturity of the
organization with respect to a process. This is achieved by
stratifying key process areas and key performance indicators
with different steps of the ladder. The framework approach is
highly relevant to Innovation Management, too. This paper
explains a framework approach measuring Innovation Process
maturity modeled along the lines of capability maturity
model (CMM) of the software development process.
KEYWORDS
Innovation, Key Processes, Strategy, Implementation
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I. INTRODUCTION
Innovation? The earliest R&D model, which still holds
considerable influence today, was a simple linear
technology push model. A fundamental assumption of such
model was that “more R&D in equaled more innovation
out”. The key to innovation was therefore seen as R&D, and
lots of it. It is very difficult to measure innovative activity.
R&D and patent are the most widely used proxy indicators
of innovative activity, but we know it has many difficulties.
For instance, numerous studies have shown that small
firms and firms in service sectors are less likely to
undertake (formal) R&D, but still found to innovate. A
considerable proportion of R&D activities amongst those
firms that do undertake formal R&D are not concerned with
the development of new products or processes, but are used
to improve firms absorptive capacities. With regard to
patents, we know that many patents are of negligible
c
economic value, that the propensity to patent varies greatly
between firms and industries (and countries), that a sizable
proportion of patents are never used in innovations, and that
a sizable proportion of innovations do not contain patented
advances. Then, what to understand out of the term,
“innovation”?
According to Ahuja & Lampert (2001), “invention
refers to the development of a new idea or an act of
creation, whereby, “innovation refers to the
commercializing of the invention”.
“Innovation = theoretical conception + technical
invention + commercial exploitation” - Trott (1998)
From this understanding, the terms “R&D” and
“Innovation” are used interchangeably following this.
The shift to knowledge based economy experienced in
the recent years, place key interest in the process of
generating innovations and creating the new knowledge.
c
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R&D is still an important means by which the stock of the
knowledge can be increased in an organized way. The
current fourth generation R&D has the following
characteristics [1]:
• The core of the R&D is based on innovation.
• Innovation process is managed by Project Management
Techniques.
• Multiple (Parallel) projects, tied to a long-term strategy.
• Emphasize on linkages (suppliers), alliances (with
leading customers)
II. INNOVATION TRENDS
With the advent of internet and related technologies,
innovation is evolving from the earliest primitive models of
pushing new products onto the market to a sophisticated
fifth generation concept of systems integration and
networking (SIN) [2]. It sees innovation as a multi-actor
process which requires high levels of integration at both
intra- and inter-firm levels and which are facilitated by IT
network revolution. The supplier, customer, competitor and
other partners (academia, industry consortiums, etc.,)
collaborate to speed the process of development while
enhancing quality of output. This evolving “automation of
innovation” concept is highly facilitated by new digital
technologies, as already stated.
If one begins to evaluate innovation management
capability of a company, responses to the following basic
questions should be looked into (Refer Fig. 1):
Long
Innovatio
Term
n
Learning
Behavior
Fig 1: Innovation in Organizational Support Context
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1) Does the organization take the strategic approach to
innovation?
2) Has the organization established effective external
linkages?
3) Are there effective implementation mechanisms?
4) Does the innovation take place in a supportive
organizational context?
5) Is this a learning organization with regard to innovation
management?
By no means these are exhaustive; however, the
answers to such questions identify a number of ‘archetypes’
of innovation capability. This approach gives the possibility
of a quick ‘snapshot’ to focus attention and create the
commitment to improvement. The score on self-assessment
is helpful in the learning process for improved innovation
management. Benchmarking can help learning in several
ways- in particular it offers a powerful motivator for change
since unfavorable comparisons are hard to ignore. Perhaps
the most valuable component of benchmarking is its use as
a framework for structured review and reflection on how the
organization currently performs. One such framework to
benchmark software development processes is SEI’s CMM.
The framework approach is highly relevant to
innovation management, too. Back in the 1980s the UK
National Economic Development Office developed an
‘innovation management tool kit’ which has been updated
and adapted for use as part of a European programme aimed
at developing better innovation management amongst
SMEs. Another framework, originally developed at London
Business School, is now being promoted by the UK
Department of Trade and Industry. There are other
frameworks, which cover the aspects of innovation
management, such as continuous improvement and product
development.
The approach discussed in this paper is to define
objective analysis model to evaluate innovation maturity of
an organization.
III. INNOVATION PROCESS
‘Innovation is the specific tool of entrepreneurs, the
means by which they exploit the change as an opportunity
for a different business or service. It is capable of being
presented as a discipline, capable of being learned, capable
of being practices’ Peter Drucker [3]
It is a common knowledge that the innovation is
complex, uncertain and almost (but not quite) impossible to
manage. The successful innovation management varies
enormously- by scale, type, sector etc.. Nevertheless, there
766
does appear to be some convergence around two key points 2) Process to track regulatory signals.
as inferred by research studies [4]: • Membership with standard making bodies

1) Innovation is a process, not a single event, and needs to 3) Process to gather market intelligence (Market Push)
be managed as such. • Sales & Marketing, Practices

2) The influences on the process can be manipulated to 4) Process to select the R&D projects
affect the outcome, i.e., it can be managed. • Business alignment. Long range R&D by corporate
• Short range projects by operating divisions
From innovation as a strictly sequential linear process • Portfolio Management
to a largely parallel process, the complexity is increasing • Agree and commit resources
enourmously. The concurrent activities, the high level of
functional overlap/integration during the innovation process 5) Process to resourcing the R&D
(i.e., integration within the firm) and the importance of
• Internal human resource allocation
external links/alliances- up stream with key suppliers and
• Evaluate external linkages
down stream with demanding active customers are some of
• Acquire via external R&D contract
the challenges associated with current trends in innovation.
In the advanced technologies; the innovation process seen • License or buy-in
not only as a cross-functional activity, but also as a cross-
organizational activity. The emphasis is on ‘the distributed 6) Process to manage R&D projects
innovation system’. • Use Project Management techniques
• Manage effective external linkages
The innovation networks commonly include suppliers
and customers, but the evolving innovation also includes 7) Process to implement R&D
alliance between firms with different technology capability • Peer reviews
bases for exploitation of ‘dynamic complementarities’. “The • Accelerate or Exit projects
emphasis is shifting from the ability to innovate to the • Risk Management/De-risking
ability to manage the innovation process more quickly and • Publications/Patents
efficiently.” • R&D transfer to R&D delivery Group (for
centrally funded projects)
The following four clustered aspects of the capability • Parallel technical development and development of
perspective should be highlighted as fundamental to the the relevant market. (For product development this
innovative process: is external customer market. For process
development this is internal user market. Both
1) Strategic Intent and the Strategic Management of require ‘change management’)
Innovation • Spin-offs

2) Internal Organization and Innovation Processes 8) Process to R&D transfer to practices/product groups
(Routines) • Prototypes, methodologies (intra firm technology
transfer)
3) Understanding Customer (or User) Requirements
(Market Positions and Paths) 9) Process to learn and continuous innovation.
• Project end reviews & auditing
4) Building and Exploiting Technical and Technological • Benchmarking
Capabilities
• Best Practice learning and sharing
• Measure success (5P’s: Patents, Publications,
IV. MANAGING INNOVATION Prototypes, Processes, People)
The identified key processes (routines) in innovation
V. INNOVATION MATURITY MODEL
management that are superimposed by the above cluster of
aspects of the capability model are:
Keeping in view the R&D generations, as they explain
how the market, technology and organizational structures
1) Process to track technology (Technology Pull)
are exploited to mature the innovation cycle, the following
• Industry Associations
levels are proposed to assess the maturity of an innovation
• Literature, conferences, Seminars program:
• University Collaborations

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1) Basic: It has adhoc processes for innovation. These are business results thro’ the full innovation process [5]. TFig2.
mostly individual driven to pursue knowledge out of refers to Innovation Dynamics wherein the different levels
intellectual curiosity. No prior linkages to market of maturity are identified.
requirements. May be inventing new and disruptive
technologies, altogether. ‘Just doing |R&D| and more of
it!’ or ‘our research should cost exactly what we have
budgeted this year’.

2) Recognized: Projects selected are aligned to business

strategy, either at corporate (long range) or at an
operating division (short range) level. Market study and
tracking technology are commonplace. External
linkages are set up as may be appropriate. ‘Necessity is
the mother of invention’.

3) Managed: Formal Project Management techniques

applied. Formal resource allocation methods.
Engineer/Scientist (dual career) concept. External
linkages are formally managed. ‘The more we practice,
the luckier we get…’ or ‘MBWA-management by
Fig 2: Innovation Dynamics
walking about!’

4) Assessed: Peers assess Projects and outcome from VI. CONCLUSION

external linkages. Accelerate for quick results due to
market conditions, or exit due to unsuitability of a
program. The Prototypes/Processes/People and
techniques transferred to practices or R&D delivery
group. Publications/Patents are commonplace. Change
Management. ‘Constant change to be in constant
control’
5) Learning/Innovating/Improving/optimizing: At this
level the organization has methods not only to improve
a given innovation, but most importantly has process to
continuously learn and improve the innovation process.
The outcome of the launch of innovation is the creation
of new stimuli for re-innovation. Projects are reviewed
and audited and true lessons to be learned. Organization
should avoid ‘re-inventing the wheel’ mode, by
suitably adopting the KM techniques. ‘Innovation is a
way of life’ or ‘our only asset is human imagination’.
As can be seen the R&D programs as they fall into
higher levels, their chances of winning is remarkably
increased. However, the success is not limited to projects at
higher levels. Projects at every level may succeed bringing
ROI to a different level as per market pull and supportive
organization.
Thus, innovation management is not a matter of doing
one or two things right, but it is a concerted all-round
performance. There is no simple magic bullet but a set of
learned behaviors. There are four clusters of behavior,
which represent important routines discussed:
• Successful innovation is strategy-based
• Successful innovation depends on effective internal and
external linkages
• Successful innovation requires enabling mechanisms
for making change happen
• Successful innovation only happens within a supporting
organizational context
Taking these aspects into considerations and keeping in
view of R&D generations a ladder of five levels is defined
as the maturity model for innovation. A detailed process
descriptions mapping onto these five levels are remained to
be seen.
ACKNOWLEDGMENTS

It may be noted that the author has multidimensional
view of highest maturity level. This is particularly true of
knowledge economy industries where the movement of
ideas is utmost important rather than technology per se. The
methodology, which is the real-time learning, is the only
way to increase the content level of knowledge and ensure
Special thanks to Mr. S. Ramadorai, CEO, TCSL who
encouraged me to pursue this model. Many thanks to Prof.
Kesav Nori, Executive Director, Business Systems &
Cybernetics Center (BS&CC), TCSL and Prof. P.N.
Murthy, Advisor, TCS who have provided valuable
suggestions.

T
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 REFERENCES

[1]. “Linking Strategic Planning with R&D Portfolio

Management in an engineering research center”,
Zbignew J. Pasek, Farshid Maghami Asl, Proceedings
of MIM: 5th International Conference on Managing
Innovations in Manufacturing, 2002.

[2]. “Towards the Fifth-generation Innovation Process”,

Roy Rothwell, International Marketing Review, 1994.

[3]. “The Discipline of Innovation”, Peter F. Drucker, from

Innovation & Entrepreneurship: Practice and Principles,
Harper & Row, 1985.

[4]. “Managing Innovation”, Joe Tidd, John Bessant, Keith

Pavitt; John Eiley & Sons, Ltd, Second edition, 1997.

[5]. “Innovation Strategy for the knowledge economy”,

Debra M. Amidon; Butterworth-Heinemann, 1997.

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