Organisations are constantly bombarded by messages about the need to be more ‘innovative’, to increase the rate of ‘innovation’ and to create a climate that supports ‘an innovative culture’. Given this stream of messages you would be mistaken for thinking that there was a definitive statement of what innovation was and how it applies to your business.
In a recent survey undertaken for a major UK public body into the understanding of innovation and how to be innovative, we spoke to 100 companies and obtained 76 different definitions of innovation and how it was applied to industry – clearly indicating that ‘Innovation’ is a widely used, but little understood, term.
Defining Innovation
The problem with defining Innovation is that it is an organisational philosophy, much like the philosophies of ‘Lean’ or ‘Six Sigma’, rather than a single tool or technique, and therefore is open to numerous interpretations and definitions, and most people associate simply with the development of new technologies. My opinion, based on much research and ‘thought time’, is that organisational innovation is broader than the focus on technology and can broadly be summed up as being about three ‘P’s:
* People – creating an environment and systems that motivate people
* Products – developing new products (or services) quickly and effectively
* Process – improving your operational systems (the ones that deliver value)
Whilst many people define innovation as the ‘commercialisation of ideas’, the broader definition of innovation involving the 3P’s, leads me to put forward a more definitive statement about innovation:
‘Innovation is about implementing effective ideas that help a business to achieve either organisational or market needs – and the faster they are implemented the better.’
In this definition, innovation is about organisations recognising relevant market needs, creating appropriate ideas that are able to capture this potential value and then to bring these ideas to life through effective management, organisation and processes.
More important than all of this is the needs of management to create the right ‘climate’ for innovation to succeed, without which none of the above will be possible.
Innovation: The Strands
Innovation is a broad philosophy that affects all parts of an organisation. For ease of explanation, we talk about three strands to organisational innovation, these being – Product, Process & People.
Product Innovation
There is a great tendency to define this as purely developing new products, but we need to consider a wider brief, including:
* Re-engineering existing products and services to reduce costs or to improve functionality, for example, TV technology is constantly being reengineered to reduce costs for basic products or to increase functionality to keep revenues up.
* Enhancing brands to create additional client value, a recent example being the work undertaken to change the brand value of Skoda as a way of increasing revenue.
* Taking existing products to new markets, such as selling recycled 486 PCs to Africa where they would have virtually no value in their traditional market.
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