Innovation in companies on the table at Knowledge Sharing Breakfast

The Department of Management Studies had asked Erkki Ormala to invite its and the school's partners to hear about the results of their research project on the change in the management of the innovation process in companies.

At the same time there was an exchange of views on how Finnish business innovation might go about creating growth in the economy.

‘Given the competition as it stands, the old approach just will not work any longer,’ said Ormala in his opening address.

He presented the main findings of the research project he had led, entitled New Challenges for Business Innovation, to the invited guests, stressing that there would now be a need for a comprehensive reform of the innovation system and incentives for companies to deploy the latest innovation methods.

The study suggests that the main priority for innovation in companies is now very much the development of current operations and making small-scale changes, leaving the most radical solutions, those liable to establish entirely new areas of business, on the back burner. A total of 58 innovation managers in 52 Finnish companies had been interviewed for the study.

Innovation process to be monitored

In his speech, Jyrki Ovaska, Executive Vice President, Technology at UPM, considered the innovation process that the results of the study had inspired as a whole.

‘We work on the principle that something obviously has to come out of the innovation process,’ he pointed out. He responded positively to the question as to whether the 'innovation pipeline' might leak.

‘There are a lot of ideas and innovations taking root, which will stay in the pipeline and never get out. But better innovation tools should be developed to tackle this challenge.’

Juha Saarnio, Head of Innovation Networks at the Federation of Finnish Technology Industries, reminded everyone that companies would need help to get out of the innovation pipeline to facilitate and and implement future ideas.

‘Too many innovation start-ups still end up in the bottom drawer.’

Minna Nissinen, Senior Vice President, Alma Diverso, said that the initial phase of the innovation process needed emphasising, and remarked that there is no actual process if the initial stage lacks content.  That is why she thinks that leadership needs to be brought up to date.

’We have to turn our attention to the creation of a culture and a climate that encourages and nurtures innovation. There are many who might say “No” to reform to be found within organisations, but the point is, who is it in your company that you can go to talk to about good ideas and who has the authority to say “Yes”?’

The challenges of new innovation methods also relate to how you first get people to think of new ideas, how those ideas are organised, and how you get the golden nuggets themselves to evolve in the process, so that you get something out that radically enhances the market or the sector. However, Juha Saarnio believes that strategy is used to try hard, or even too hard, to drive innovation in companies. 

‘Failures and mistakes can also lead to innovation,’ he pointed out.

Cooperation between companies and universities is one of the mainstays of the innovation system

The conclusions arrived at in the study took the form of a number of recommendations.  Traditionally strong ties of cooperation between universities and companies still need developing, so that they might, for example, benefit from incentive schemes. 

In this way, there would also be greater initiative on the part of universities with regard to innovation partnerships. At present, a cause of concern for companies is that applied problem-oriented research that utilises expertise in the business world is slowing down and the parties involved are distancing themselves from each other.

Top-level expertise and research data at universities should be channelled from these institutions to companies more readily and more rapidly than is the case at present. Erkki Ormala mentioned that no similar research, where the innovation process would be examined as a whole, had been conducted to the same extent in other EU countries. The School of Business is a trailblazer in this respect.

‘We used the results of the study and the proposals for action to produce some training material for companies on the “best practice” model,’ Ormala revealed. 

The research project is to continue: in the next phase innovation in companies and the impact of innovation systems in 11 EU countries and at EU level is to be the subject of enquiry. The project will run for two years and the funding it receives will total EUR 2.4 million.

The study report. (lib.aalto.fi)

The Knowledge Sharing Breakfast guest seminars organised by the School of Business are designed for business managers and decision- and policy-makers. These offer an opportunity to acquire the latest information and take part in an inspirational debate on topical subjects.