Innovation
Innovation is...
Converting new ideas (from creativity) into new products and processes which satisfy
customers better than competitors.
This may involve invention (making a completely new
product).
New product development is vital, but it is also important to find new ways of improving processes like
production and customer delivery.
How to be innovative
1. Vision, challenging aims and leadership
Successful innovators often have a vision, a future ideal based on making something new and worthwhile for
customers to enjoy (e.g. Walt
Disney ,pictured right, wanted to “bring
happiness to millions”).
Every manager (including the chief executive) should encourage innovation and new ideas.
2. Creative corporate culture
Innovation and creativity should be:
- always applied in their work.
New ideas should be valued, encouraged and rewarded.
A no blame culture is vital, in which everyone accepts that innovation involves failure
and making mistakes.
3. Customer satisfaction
a) market research
Find out customers’ needs and how they are likely to change in the future (see market research).
b) innovate, not imitate
Be uniquely superior to competitors through marketing and branding, quality, great design and continuous
improvement .
c) create new markets with revolutionary products
(e.g. iPod and Google).
4. Long-term thinking and risk
You need a long-term research and development (R&D) strategy, but innovation is very risky – many new
products fail.
5. Empowerment, teamwork and purposeful freedom
Innovation results from:
a) control and freedom
The freedom to create directed towards customer satisfaction (what Japanese companies like Honda have called
harmony within discord).
b) small multi-functional teams
(groups of 5 or 6 from different managerial functions like production, marketing and R&D).
c) asking people for ideas
- put the best ideas into action.
- explain why the others wouldn’t work.
6. Brainstorming
This is getting people in small groups to suggest lots of new ideas to satisfy customers better – see
creativity.
7. Reflect and
relax
People must have the freedom and time to think and reflect about possible solutions to customers’
problems without any fear of criticism.
Leisure is a great time for new ideas, so employees shouldn’t:
- work unnecessarily long hours.
- waste time with unnecessary paperwork and meetings.
They should think about a problem, relax and then go back to it.
8. Question everything
Creative people continually challenge the way things are done and what others think (conventional
wisdom).
They constructively argue with other people (constructive conflict) and are passionate about
new knowledge and continuous improvement
For example, a worker at the British match maker, Swan Vesta, saved it millions by suggesting
only putting sandpaper on one side of the matchbox.
9. Constant innovation
Constant innovation is essential because of shorter product lifetimes caused by:
- better customer information (e.g. on the Internet).
Many innovative companies like Sony have parallel development – developing new products
but also their replacements as well.
10. Recruit creative people
Creative people (like Albert Einstein,
pictured right) should be:
- Naturally curious – seeking new experiences and new solutions to problems.
- Passionate about their work.
11. Learn and get outside help
a) open innovaton
This term was coined by the American, Henry Chesbrough (pictured right), to describe help given by outside innovators (e.g.
universities), particularly via the Internet
This has been used successfully by companies like IBM, Proctor and Gamble and Lego.
b) be imaginative
Find new uses for things.
c) connect relevant issues together to solve a problem (holistic thinking)
(e.g. health care is about preventing illness as well as curing it).
d) learn from other people’s experiences and ideas
Jean Nidetch (pictured right) made
Weight Watchers successful by using the idea of group support from Alcoholics Anonymous.
e) use intuition and common sense.
f) experiment
Be adventurous and take risks.
12. Perspiration and perseverance
Innovation is a long process with lots of failures and criticism.
Thomas Edison (pictured right) tried 3,000 different materials for his light bulb and only two
worked – so persevere!
Key quotes explained
“Harmony in discord”
-
Horace ,Roman poet (pictured right)
Innovation needs continual questioning and debate (discord), but these must be directed towards customer
satisfaction (harmony).
“Every act of creation is first of all an act of
destruction”
- Pablo Picasso ,Spanish
artist).(pictured right)
Creativity destroys old and useless ideas and replacing it with new and better ones.
This is what the American economist, Joseph Schumpeter, called “creative
destruction”.
“Who the hell wants to hear actors talk?”
- Harry
Warner (founder of the Warner Brothers film
studio.(pictured right)
Innovation makes old ideas obsolete, so the American campaigner for the blind, Helen Keller, said: “The heresy of one age
becomes the orthodoxy of the next”.
“There is one thing stronger than all the armies in the world; and that is
an idea whose time has come”
- Isaac
Newton (English scientist).(pictured right)
Timing is vital to the success of any innovation.
Best books
Tom Burns and G.M. Stalker , The Management of
Innovation (1961)
Innovation needs informality, loosely defined roles, reward for performance and open communication in teams (an
“organic” or “organismic” structure).
A “mechanistic” structure (hierarchical with strictly defined roles and power from
position) is best suited to stable conditions.
Rosabeth Moss Kanter
(pictured right), The Change Masters (1984)
Innovative companies:
- see problems as a whole and relate all the relevant issues to solving it
(“integrative problem solving”).
- have multi-functional teams with the responsibility to make their own decisions.
- give people in these teams the “power tools” of innovation – money (and other
resources), information and support for new ideas.
(For more detail seeThe Change
Masters in the Business Books section).
Richard Pascale
(pictured right), Managing on the Edge
(1991)
Innovation comes from questioning everything and “constructive contention” (i.e.
challenging other people’s views and constructive argument.
Success is dangerous because it creates complacency or, as Pascale puts it: “Nothing fails like
success”.
(For more detail see Managing on the
Edge in the Business Books section).
Clayton Christensen
(pictured right) , The Innovator’s Dilemma (1997)
Successful companies don’t innovate because they have so much money invested in existing products.
(For more detail see The Innovator’s
Dilemma in the Business Books section).
C.K. Prahalad
(pictured right) and M.S. Krishnan (pictured right below), The New Age of Innovation (2002)
“Co-creation” is vital i.e. innovation in partnership with customers (e.g.
Facebook and Wikipedia).
Peter Drucker (pictured right) , Innovation and Entrepreneurship (1985)
Innovation comes from exploiting these opportunities:
- an organization’s (and its competitors’) unexpected successes and failures.
- changes in its processes (e.g. production), industry and market
structures (see industry
analysis) and customer perceptions.
- population changes affecting customer needs.
- new knowledge (scientific and non-scientific)
|