By: Shanta R. Yapa
Organizations rely on innovations to sustain competitiveness. Managers often talk about innovations. Some use it as an ornament. Perhaps innovation is the mostly abused word by organizations and practicing managers. There are dozens of definitions for the word innovation.
An early definition is Inventions commercialized by entrepreneurs (Schumpeter, 1947). Innovation involves the creation of a product, service or process that is new to an organization. It is the introduction into the market place, either by utilization or commercialization, of a new product, service or process. It does not have to be new to the world rather; it is viewed as the first use of an idea within an organization (Aiken & Hage, 1979) whether or not the idea has been adopted by other organizations already (Nord and Tucker, 1987). The technology (or the product) need not be novel or groundbreaking. An innovation may be a change in industrial practice, which improves productivity. The innovation process involves integration of existing technology and inventions to create a new or improved product, process or system (Jain and Triandis, 1990).
Although product and process innovations are the most popular practices among organizations, business model innovations are posing challenges to well established firms and brands globally. Similarly, there are dozens of different types of innovations as explained by scholars. Among them are incremental and radical innovations, modular and architectural innovation (Henderson & Clark, 1990), disruptive innovation (Chirstensen, 1997), reverse innovation (Govindarajan, 2009), social innovation, collaborative innovation, frugal innovation (Radjou & Prabhu, 2015), open innovation (Chesbrough, 2003), user driven innovation (Hippel) and social innovations.
The objective of this short article is not to explain the breadth and the depth of the domain of innovation. Instead, this is an attempt to simplify innovation and encourage you to better understand and practice it. Is your organization innovative? How many new products and processes you introduced in the past one year? How do you compare the numbers with other players in the industry and also with the globally best? This write up will enable you to understand and practice innovation by answering the following questions. When to innovate? Where to innovate? How to innovate? In the end the importance of use of innovation tools and especially home grown or in-house tools are emphasized. A seemingly complex topic is made clear. Enjoy the reading. It is innovation simplified!
When to innovate?
Being the first to the market can be exciting and very impressive. Yet, you need to understand the challenges embedded. An organization may attempt to introduce a product to a market before the supporting technical, policy and legal infrastructures are ready. Under such circumstances, policies are unsupportive and awareness creation among users will be quite challenging and costly.
The first mover can be at a disadvantage where the subsequent entrants will have an easy time. Yet, there are several first mover advantages such as building brand equity, locking up with best customers and partners in the value chain. If the domain you plan to enter or the product you innovate has no entry barriers for others, economics of the first mover has to be carefully studied. Allowing an established firm to first enter the market clearing all obstacles can be more strategic. You may next enter the market perhaps with a better and appealing product, especially if you are a start-up. Studying where the product/process can be placed on the generic PLC curve is mandatory before undertaking the innovation exercise. Your passion to innovate should be justified with the existing and potential market demand. This is very crucial when you have resource constraints and demanding investors.
Where to innovate?
Where to innovate is another confusing area for many. My suggestion is simple. You need to look for gaps. Gaps in products, processes and business models can offer exciting opportunities to innovate. Where to innovate can be made quite easy if you attempt to see how we can enhance favorable outcomes of a product or a process. Similarly you can question how you may reduce/eliminate unfavorable outcomes. “Where to innovate?” has a short answer; anywhere you can do better, with less and faster to enhance favorable outcomes and reduce unfavorable outcomes be it a product, process or a business model. You will find areas to innovate by examining gaps in the market, risks faced by public and firms, opportunities to offer convenience and comfort, productivity improvement, process efficiency, new functionality, staying relevant, ease of use, waste reduction, energy saving and the list continues. Unlike inventions, innovations need not to be novel to the world. Any new product including incremental improvements or any new process is an innovation to your organization. Therefore, it is about finding a value creation opportunity for an organization and successful implementation.
How to innovate?
Technology is said to be an expression of human creativity. Therefore, innovation which is a combination of multiple technologies can be defined as an integration of human creativity. Think of components of a product or the functionalities. Similarly, you may think about a process. You can innovate by adding, subtracting, multiplying, dividing, removing, eliminating, combining, aligning, integrating, reconfiguring and rearranging the components of a product, steps in a process, modules in a software etc. We often tend to believe that higher the features or components better the appeal of the product or its level of innovation. However, LIMI or less is more innovation (Allan Afuah, 2014) is becoming popular (against MIBI or more is better innovation) among business firms. The Apple Ipad introduced in 2010 with no disc drive and no USB ports is a good example. They sold 2 million units in 4 months.
Answering the above questions of (1) when to innovate (2) where to innovate and (3) how to innovate will enable you to come up with a new idea around which you build the concept, test it with prototypes and decide on a go to market strategy. The subsequent steps in commercialization are straight forward and widely understood. However, they may demand more domain expertise, resources and time. Despite resources and capabilities available many firms struggle to innovate. Therefore, the simplified initial questions will take you through the most challenging part of the innovation process to end up with a conceivable proposition. Other questions you may ask include with whom you should innovate and for whom. These questions will provide answers in selecting the best partners and also creating value for stakeholders.
Use innovation tools especially your own
Use of tools in innovating can make your life easy. Among many tool used in different stages in the innovation process the popular once are brain writing, mind mapping, morphological maps, bench marking, KANO model, product clinics and business model canvas.
Similarly, you may build your own tools. It is easy! Building innovation tools is quite enjoyable. It makes you more creative and confident. It enables you to share with the current and future generations something valuable and leave your footprint in the domain. You may read about the EPIC formula in innovation, the innovation Tautogram and the ISLAM model in innovation in the internet to understand some tools the writer has developed.
We must necessarily change our mindset and seriously engage and support in innovation efforts of start-up firms. Greed for accolades and profits can make innovation efforts short lived and non-sustainable. Innovating for the name sake, harness others knowledge, exploit opportunities unethically will not take us anywhere. Let us be creative, ethical and professional and support each other, the mantra in the age of collaborative and open innovation to prosper. Your nation and the world are looking at you. They rely on you in solving local/global problems and bring prosperity and harmony.
About the author
Shanta R Yapa counts over 30 years of experience in engineering, banking and service sector firms. He is a visiting faculty member teaching business strategy, technology and innovation in postgraduate programs of 16 local and international universities. He is a certified innovation manager. He serves in several boards and committees of industry associations, policy authorities and academic institutions. Email: [email protected]; LinkedIn & FB: Shanta Rajapaksha Yapa.
This article is written based on a speech made by the writer at a Workshop on Corporate Entrepreneurship and Innovation organized by the University of Moratuwa, Sri Lanka on November11, 2017.