One of the most popular concepts in today’s business world is innovation yet not many people know what it is all about. There are very few people who are well versed with the concept of innovation, how it works and how you can leverage it to take your organization to new heights of success. It is absolutely important for business leaders to figure out what exactly the innovation is because organizations which innovate are at an advantage over all others.
What is Innovation? Innovation is the process of implementing new ideas to add value for the organization. It is about enhancing existing systems or creating new processes, systems and services. While creativity is about coming up with new ideas, innovation is about practically implementing these ideas. Effective use of innovation in the organization ensures better performance and growth by enhancing efficiency, productivity, quality, competitive positioning and market share.
Trends Effecting Innovation: There are many internal and external factors which affect innovation in an organization. Some of these factors are as under.
Increasing Global Competition.
Advances in Technology.
Increasing Volatility of Resources
Changing and Diverse Market Needs
Increasing Environmental Concerns.
Industry Specific Trends
Innovation Driven Growth: As mentioned above, business leaders have to understand the true concept of innovation to stay competitive in the market. In fact, almost 93%of executives believe innovation-driven growth will be major driver for revenue growth, 40% of them believe that most innovative companies grow. Unfortunately, 37% of business leaders have no idea of innovation or they do not have any clear innovation strategy.
7 Strategies of Leading Innovators: It is pertinent to mention the strategies adopted and formulated by the leading innovators in the world. Some of these strategies are as following.
They have well defined innovation strategy.
They innovate with purpose.
They adopt both formal and structural approach to innovation.
They focus on major part of radicle innovation.
They plan broader range of business model innovation
They explore wider range of innovation operating models
They collaborate more with external partners.
Types of Innovation: There are many types of innovation, most important of which are as under.
Product Innovation: This type of innovation completely changes customer’s perception of the product by making some changes in its specifications.
Process Innovation: Process innovation brings changes to services or product production process and may or may not have an impact on the final product. Mostly, process innovation improves productivity while reducing costs.
Incremental Innovation Reflects small continuous improvements in products or product lines.
Radical Innovation Radical innovation changes the consuming behaviors of the people with respect to certain products or services. It brings a new paradigm to the market segment and modifies the existing business model.
Challenges to Innovation: It is never easy to introduce innovation in the workplace. Different executives put forward different reason as why the innovation is not working for them or whey they are unable to fully benefit from it. For instance, 54% executives think that it is a big challenge to take innovative ideas to market quickly and in a scalable way. Similarly, 53% of them argue that finding and retaining the best talent to make innovation happen is the hardest nut to crack. For 46% executives, developing an innovative culture is a big issue while other 46% and 45% leaders believe it is difficult to find right external partners to collaborate with and have the right metrics to measure innovation and ROI respectively.
In the context of above discussion, following figure represents innovation loop in an organization.
Innovation Transformation: Innovation transformation starts from the beginning of the innovation in an organization till the benefits and financial gains of the process are transferred to the organization. The first step of the innovation transformation is Innovation Audit which is all about uncovering most critical and effective levers in addition to determining best practices for improving innovation.
The second step is the Leading for Innovation which compels leaders to design, develop and deliver multi-month innovation program across global leadership population. Third step of the process is Embedding Innovation which involves design, develop, deliver and advise on holistic and integral embedding of innovation initiatives across the whole organization. The end result of all these steps is the maximized innovation in the workplace and increased profits.