Ways of Shaping Innovative Companies

Innovating Bottom-up or Top-down
Ruud v Houten
Check out 2 recent articles by professor Deschamps on this question. Deschamps makes a useful distinction between promoting bottum-up innovation and steering top-down innovation to develop an innovative company.
BOTTOM-UP INNOVATION is fuelled by the ideas and initiative of individuals within a company. Companies can stimulate idea generation through hiring creative entrepreneurs and mechanisms such as: innovation performance measures, give “free time” to explore new ideas, network with idea providers, get close to the customer, and use reward systems to recognizing the providers of great ideas. Most important is to establish an innovation culture that encourages creativity and entrepreneurship. Such a culture must be customer-centric by understanding consumers intimately. Oher cultural factors are: encourage organizational creativity, appoint innovation champions, establish an entrepreneuerial culture, and a "can-do"climate and remove or reduce organizational barriers to innovation.
TOP-DOWN INNOVATION is initiated and fuelled by an innovation vision and strategy of a company’s top management. A seamless innovation process is also important (sub-processes: business and technology intelligence, idea management, technology and supply base development and deployment, product and technology strategy and planning, program management, product lifecycle management). Internal and external networking with suppliers and partners and involving them in the innovation process as well as provuiding adequate innovation resources are also important in this form.

Basics of Innovation
Venkatakrishnan
While the points expressed by Prof. Govindarajan and Prof. Trimble are valid, it is also imperative to consider the following.
1. Innovations happen most when there is a need in a constrained situation.
2. It is abnormal to have a constrained situation all the time and every time.
3. Even in constrained situations normal solutions might work and solve the issue.
Hence innovations are more driven by: a) the need to be different, b) to stay ahead in market, c) to satisfy stakeholders continuously if not delight them, d) under constrained situations where normal solutions are not feasible, e) time or effort or environment is a constraint, f) a situation that is open to new ideas and experiment, g) a situation that accepts and takes risks.
Finally: there are no inhibitions.