How constraints influence company innovation processes

Abstract

Optimization of innovation processes within companies is a key issue in the market economy. The main objective of this paper is therefore to present an analysis of innovation processes, and to propose a system of indicators to optimize these innovation processes within companies. To do this, the following tasks are undertaken: a) the concept of the innovation process is discussed and the main stages of its implementation outlined; b) factors which hinder successful innovation in Russia are investigated; and c) the concept of constraints on innovation processes is formulated and tested. The work presented herein is based on the theory of constraints (TOC) developed by E. Goldratt and J. Cox (1992), combined with the concept of innovative process. In the presented research, the main constraints impeding innovation are identified as: resources, results and market constraints. The influence of each type of constraint on the various stages of the innovation process are also identified. Financial indicators which could both a) facilitate the ability of a company to attract funding at each stage of the innovation process, and b) resist constraints on resources, are identified. This paper demonstrates how, in order to minimize the influence of constraints on results, it is important to assess the financial efficiency of project implementation. As a result of the study, a system of key performance indicators which help to overcome the different types of constraints on each stage of the innovative process is developed and presented. The main feature of this system is the distribution of selected indicators throughout the stages of the innovation process. Timely calculation and maintaining close monitoring of the selected indicators can help an entrepreneur to successfully optimize their innovative steps at all stages of the innovation process.