Decision making is the key activity in innovation from the business strategy to the evaluation of the results of the practice of the innovation. At this stage it is major decision making of the top management who must:

     accept the innovation strategy into the business strategy;

     provide the resources;

     set up the organisational structure for the innovation; and

     determine the measures against which the innovation has to be
        judged throughout its development and in the final application.

Top management is given the knowledge to do this, but it must decide what knowledge is needed. Knowledge costs money and usually the depth and width of knowledge are set by the money that top management makes available. It is important that this triangular relationship between knowledge, finance and decision making is understood by both top management and the people providing the information. There can be excess costs, inadequate information and poor decision making!

There are 10, 20, 50, maybe even 100 innovation strategies in a large, multinational company. How can they be compared and the decisions made? The decisions can be made on the financial analysis alone but this is dangerous at this early stage. The top management needs also to be given scoring on the other measures, which have been given as important aims for the company. Management can be presented with separate analysis of the different innovations, but needs to be shown the outcomes and inputs of different mixtures of innovations in possible innovation portfolios. It is the total picture that is necessary and not just the individual innovations. Sometimes the directors on a Board make a decision on one innovation strategy at one meeting and another at the next meeting, and the decisions can be counter-productive. It is the yearly presentation of the long-term innovation portfolio that is necessary for good decision making.

Think Break For the two company products that you chose in the last Think Break, imagine that you are preparing for a presentation to the company's Board of Directors, so that they can select the most suitable innovative strategy for further development. Outline each innovative strategy and then using some of the factors in Figs 2.9 and 2.10, analyse the viability of each innovative strategy and the suitability for the company. How would you present the innovation strategies and their analysis to the Board?