Innovation comes from the application of new ideas to existing products and processes. The new knowledge required to spur innovation can arise within an organization or from an external source. Knowledge management and innovation are closely connected because the knowledge management system can identify sources of new ideas within the organization and supply this knowledge to the people and functions that may require it. Knowledge management also may assist in capturing new ideas from outside sources including suppliers, customer feedback, trade journals, seminars and open innovation. These new ideas may be combined with existing knowledge to push through innovation in products, services, processes or marketing methods.
The knowledge management function can help to foster an innovation culture within an organization. Staff may be encouraged to supply suggestions on improving efficiency in production, administration or marketing. The people carrying out these functions are best placed to advise on suitable innovations based on their daily experience. Contact with suppliers and customers also may give rise to innovative suggestions that should be gathered and passed on to the appropriate departments for implementation. Incentives may be offered for staff ideas, or a culture of knowledge management and innovation may be built up where innovative ideas are offered regularly through informal channels or structured internal seminars.
Staff attending outside conferences must be willing to report back on information gleaned from external sources, even where this does not affect their own work in the enterprise. Knowledge management and innovation may be encouraged by increased networking with innovative enterprises and research institutes within an industry and identification of partners for research or joint ventures. Knowledge gathered from such outside links may be useful to the enterprise and should be captured and distributed as required. The circulation of trade journals among departments can be made more efficient and targeted at appropriate key personnel who are willing to identify and distribute useful knowledge.
Knowledge management and innovation are connected by a process in which customer feedback is captured in a structured way through questionnaires or surveys designed to bring out constructive ideas. By closer collaboration with customers and suppliers, it may be possible to set up open innovation networks through which the design of future products may be adjusted to conform more closely to the needs of existing and potential customers. The process may be coordinated by a knowledge manager who knows where new knowledge is being created within the organization and can supply that knowledge to those points in the organization where it may be used to update and innovate.