There are a lot of reasons innovation and generation of new ideas are critical for the success of any business. There is no denying of the fact that businesses which do not innovate lag behind their competitors regardless of their industry specific requirements and priorities. Similarly, these organizations can lose their star performers or simply operate inefficiently. In fact, one of the major differences between the market leaders and their rivals in modern economy is the innovation.
It is also a fact that many organization have survived in the past despite little or no innovation at all. They just focus on providing quality products or services in a bid to maintain their competitiveness in the market. However, organizations have to improve their effectiveness and efficiency because of emerging trends like globalization and outsourcing. All these factors combine to make innovation critical for any organization’s success.
Despite all the benefits of innovation, you do not need to ethically innovate in order to survive. You have to analyze that whether your products or services need innovation to survive and succeed or not. Ask yourself a question. Can you be innovative in other ways rather than offering an innovative product? Sure you can because innovation not only helps you to run successful marketing campaigns and generate more leads but it can also make you more creative, leaner and flexible.
You may not need innovation under normal circumstances but the current economic uncertainty requires you to innovate in order to rise above your competitors.
Four Levels or Types of Innovation:
There are basically four different types or levels of innovation which are described one by one in the following lines.
- Business Model Innovation:
In Business Model Innovation, organizations redesign their operating and marketing model around a clear customer need. Subsequently, they realign their profit formula, process and resources with new value proposition.The main components of Business Model Innovation is the value creation, major restructuring of the business and establishment of new business units.
- Process Innovation:
As the name suggests, process innovation includes redesigning and rethinking of processes used to deliver products or services. This might include significant changes in software, technology, infrastructure or equipment. Process innovation incorporates introduction of changes to enhance the capability of logistics, sales process and production operations. Some of the companies which maximized the benefits of process innovation include Toyota, Citroen and Peugeot.
- Market Innovation:
According to simplest of definitions, “market innovation is the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing”. The main purpose of this type of innovation is to explore and open new markets, address customer needs and position a company firmly in the market with an aim to increase its sales.
- Product Innovation:
As the name implies, product innovation involves the introduction of a substantially improved, redesigned or totally new product in the market. Typical examples of product innovation include quality improvements, new specifications and invention of new products. Similarly, businesses can also add desirable functions, materials and components in already existing products. Samsung, Apple and Microsoft are some of the companies which rose well above the competition thanks to effective implementation of product innovation.
Flawed Focus on GDP:
In the context of above discussion, the flawed focus on GDP also plays a great part in unsuccessful or faulty implementation of innovation in the organizations. In fact, Gross Domestic Product is an inaccurate measure of economic well being and therefore, you cannot base your innovation process on GDP. The GP driven economy or innovation does not differentiate between the beneficial and harmful effects of economic activities, making it necessary for organizations to look for other options.
Organizations are quickly shifting from GDP driven innovation to Ethical Economic Innovation which is going to be the next big thing in global economy. The earlier you invest in this type of innovation the better otherwise you will lag well behind your competitors. Many industries such as medical care have successfully formulated clear ethical rules to govern the process of innovation and you can follow suit as well.