Innovation – Script
Innovation, the profitable exploitation of ideas, has an important role to play in developing competitive advantage. Innovation goes beyond creativity or ideas, and encompasses the act of bringing these creative ideas into being.
Innovation creates competitive advantage.
Innovation can certainly lead to some impressive breakthroughs. Just consider the printing press, light bulbs and antibiotics. For more modern examples, we can look to Apple, Amazon, and Starbucks to lead the charge. There’s no doubt that radical innovation has created some very successful businesses.
But innovation can also be used to design and initiate smaller changes and improvements, such as:
improving or replacing business processes to increase efficiency and productivity
developing new and improved products and services
adding value to products, services or markets
Introducing innovation can help a business to:
be more competitive
build the value of their brand
establish new partnerships and relationships
Building a culture that supports innovation can help a business stay relevant, meet challenges, and stay competitive.
Businesses that fail to innovate run the risk of:
losing market share to competitors
falling productivity and efficiency
losing key staff
experiencing steadily reducing margins and profit
going out of business
Discipline is a natural ally of innovation, as long as it makes innovation easier rather than more difficult. The most effective discipline is that which is ingrained in “the way we work around here”, and that means strong top-down leadership to authorize, encourage and support innovative activities throughout the organization. In other words, an innovative culture.
As opposed to an informal strategy that guides you as you make daily decisions, a formal corporate strategy requires you plan ahead and rein in impulsive decisions, helping you hit specific goals aimed at taking your company to the next level.
Innovation is the process of translating an idea or invention into a good or service that creates value. Innovation involves deliberate application of information, imagination and initiative to derive greater value from resources.
Innovation is an action, a movement toward great value, both given and derived. A formal business strategy is a road map for employees and business leaders alike, guiding them toward a unique vision and organizational goals. When innovation is included within a formal business strategy, the initiative for value-creation and purposeful, deliberate creativity, becomes embedded in a corporate-wide culture.
In business, we’re paid to take raw inputs and add value to them by turning them into something of worth to other people. A value chain is a set of activities that an organization carries out to create value for its customers. The way in which value chain activities are performed determines costs and affects profits.
Value chain analysis drives change in a critical direction: toward your customers. It helps you identify the ways in which you create value for your customers, and then helps you think through how you can maximize this value: whether through superb products, great services, or jobs well done.
The most important component to innovation is continued analysis and review. Conducting a single value chain analysis will not lead to sustainable competitive advantage. Continuous innovation, creativity, and change are necessary for true competitive advantage to be maintained.
The only way you survive is you continuously transform into something else.
It’s this idea of continuous transformation that makes you an innovation company.
– Ginni Rometty
If we want our companies and organizations to grow, mature, and become strong, we must encourage conflict. Tension and disagreement are essential for growth, change, and innovation.
Positive change comes from challenging the status quo and tradition, when men and women have the courage to question how the organization is conducting its business and how it is treating its customers, employees, and vendors; when the lower ranks within the organization challenge the decisions from on high based on the reality they encounter in the real world that is often far removed from the executive suite.
Rosabeth Moss Kanter says, “mindless habitual behavior is the enemy of innovation”. It is easy for individuals and businesses to get into ‘ruts’ of habit, both in behavior and in thought patterns, and having the feedback, input, and even the debates of others gives us a ladder to get out of the box we’ve been stuck in. Innovation, as Steve Jobs said, “comes from people meeting up in the hallways or calling each other at 10:30 at night with a new idea, or because they realized something that shoots holes in how we’ve been thinking about a problem”.
For good ideas and true innovation, you need human interaction, conflict, argument, debate.
Unhealthy conflict leads to team morale being destroyed and team members who become divided and polarized. It leaves the problem unresolved and leaches resources and energy from the core project at hand. Pointing fingers, placing blame, ignoring the problem, and getting angry are all negative ways that people may handle conflicts and disagreements in business.
Omaha’s own Joe Gerstandt says that the tension of difference, properly harnessed, feeds a group’s ability to make good decisions, generate creative solutions and innovate.
Eliminating negative organizational tension requires us to both acknowledge our differences and disagreements, and also keep some focus on our commonality and agreements. Expect dissenters to support their differing opinions with facts and data, and dig deep to get to the root causes of problems. Do not tolerate personal attacks or any statements made with no aim to build up or edify.
If there is no struggle, there is no progress.
Sustained growth is the ambition of most leaders. While the mergers and acquisitions route has been favoured by some companies, most research has highlighted that growth driven by new market expansion and high-impact innovation has consistently achieved more sustainable success.
Most companies acknowledge that innovation is vital to achieving success, yet more than half of businesses don’t have any innovation strategies in place.
To create a “startup corporation” environment, a big business would need to put a number of things in place, beginning with a different approach to motivation. People would be inspired by the vision and culture of the company, not compelled by its hierarchy and rewards structure. The business would provide the stimulus to inspire new ideas: ways to interact with others from a rich mix of backgrounds through interest groups, idea fairs, and collaborative networks. It would attract players from the company’s landscape to discuss and test ideas. Mechanisms would be designed to enable these diverse people and ideas to be combined.
To truly tap the powers of innovation for business, a corporation needs to design policies and procedures that empower employees and embrace creativity. In an interview in 2010, Steve Jobs said: “You have to be run by ideas, not hierarchy. The best idea must win, not the ‘best person’ with the most power or seniority”.
The goal of innovative and empowering policies is to change the business from a routine group of people who are doing a job to a highly energized team of entrepreneurs who are constantly searching for new and better ways of making the vision a reality.
The organizations most prepared to create the future are those skilled at learning from expedient experimentation. How can an organization improve without first learning something new? Solving a problem, introducing a product, and reengineering a process all require seeing the world in a new light and acting accordingly. In the absence of learning, companies and individuals simply repeat old practices. Change remains cosmetic, and improvements are either fortuitous or short-lived.
A learning organization is an organization skilled at creating, acquiring, and transferring knowledge, and modifying its behavior to reflect new knowledge and insights. New ideas are essential if learning is to take place. Without accompanying changes in the way that work gets done, only the potential for improvement exists.
Learning and innovation go hand in hand.
The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.
– William Pollard
You have to have a big vision and take very small steps to get there.
You have to be humble as you execute but visionary and gigantic in terms of your aspiration.
It’s not about grand innovation, it’s about a lot of little innovations:
every day, every week, every month, making something a little bit better.
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