Chemical Engineering June 2022 - 40

You and Your Job
Why Innovation Operations are Critical
The future of the CPI depends on sound innovation. The guidance provided here
will help organizations to shape an effective innovation strategy that can give them a
competitive edge
Chris Townsend
Wellspring
Y
ou would be hard-pressed
to find a company in the
chemical process industries
(CPI) that isn't proud
of its history of innovation. And for
good reason, as responsible chemical
innovation has done wonders
for agriculture, home goods and
many other industrial categories -
not to mention countless everyday
products (Figure 1). Yet for all of the
good work being done, too many
chemical companies are missing
promising opportunities for future
success when it comes to their critical
innovation practices.
It's not that the existing innovation
processes are broken - but they're
no longer sufficient. From bioplastics
to alternative fuels, the chemicals
industry is moving steadily
into uncharted waters. Without the
proper innovation strategies and infrastructure
in place, traditional CPI
companies will increasingly struggle
to keep pace with promising (and
well-funded) upstarts. Although it
may be tempting to treat the pandemic-induced
business shock as
a one-time occurrence, a growing
number of experts are pointing
to the 2020s as an 'exponential
age,' where such dislocations will
be much more frequent. Therefore,
even if these prognostications are
incorrect, now is the time for organizations
to learn how they can innovate
more effectively.
The good news is that CPI companies
still have vast resources
and internal knowledge that, when
channeled correctly, can snowball
into tangible innovation gains. They
just need the strategies and tools to
help them do so.
This article provides practical
guidance on how CPI companies
can revamp their innovation operations,
outpace competitors and surpass
existing boundaries.
40
FIGURE 1. The continued development of innovative chemical products and processes has been paramount
to the success of CPI companies
Build a strategic portfolio
Most companies devote the vast
majority of innovation resources
to incremental opportunities, driving
key improvements into current
products, technologies and markets.
This occurs for two reasons.
First, the corresponding innovation
practices are well-understood
- as an example, every chemical
company knows how to run a
new product development (NPD)
process. At both the team and
executive level, there is comfort in
repeating what is familiar. Second,
incremental innovation is predictable.
By focusing on well-defined
opportunities in well-understood
markets, the organization can
calculate both the likelihood and
magnitude of success. It is much
easier for financial officers to invest
in innovation projects where the
expected returns can be modeled
with relative precision.
Unfortunately, as has been observed,
there
are looming challenges
facing the CPI that are decidedly
non-incremental. That means
that CPI companies must learn how
to invest and manage their innovation
portfolio at a strategic level. The
good news is that this is not as difficult
as it may seem at first glance.
The first step is to separate your
organization's innovation strategy
out from its corporate growth
plan. Most companies focus their
planning efforts on business and
market conditions as they exist
today: known competitors, current
products or existing customer segments.
Although a good innovation
strategy does address these
incremental opportunities, it must
also account for exploratory activities
- those that anticipate the
advent of technologies, markets
and competitors that do not yet
exist. Therefore, innovation strategies
need to be much broader than
typical short- to medium-term corporate
growth, and they also need
to be assessed and measured differently
as well.
From there, it is imperative to put
the right person in charge of the
innovation strategy-setting effort.
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Chemical Engineering June 2022

Table of Contents for the Digital Edition of Chemical Engineering June 2022