14 Sep Is Innovation Crucial For The Success Of A Business
While organizations are aware that innovation is crucial for their customer engagement and achievement of their annual target of organic growth of 4-6%, most companies lose their way when they have to figure out this herculean task of achieving success in innovation. Innovation of products does help companies to sustain themselves in this competitive marketplace and meet the sky-high demands of customers. However, innovation is not always limited to products and sometimes firms may need to innovate and update with regards to their distribution strategy and management of employees.
As companies grow in size, it becomes a challenging task to sustain themselves. While most traditional players suggest in selling more to an existing consumer base, the more ambitious ones would expand into newer markets and implore into newer consumer segments through innovative products, processes and even business models.
Most companies would follow a process-oriented approach to innovation, which would comprise of both frontas well as back-end innovation activities. All these activities are capital intensive in nature and often carry a high risk of failure. However, companies should understand that innovation doesn’t always mean guaranteed returns, and companies should not be lured into innovation for big bucks only. It is important to have some meaningful drivers like Google, eBay and Apple,all ofwhom have democratized their businesses and broken down huge barriers to offer completely new access to information, commerce and technology. For the best product innovation, every company needs to relyon product development to gather data and prioritize items that will have the biggest user impact like these three industry giants.
Before moving onto the best practices of product innovation, one needs to understand what innovation is not. Product innovations may be concerned with the launch or introduction of new products, services or processes. To cite an instance, Thomas Edison was arguably the best inventor but the worst innovator. He was incompetent in commercially developing his inventions, which led to his financial backers to remove him from every business. In contrast to this, McDonald’s hamburger was an innovation. It wasn’t Ray Kroc (the owner of McDonalds) who invented the hamburger, French fries or even the drive-in pickup, his innovation was about standardizing the products, giving customers a meal made with consistent quality, hygienic conditions and at low prices.
What we could conclude is that the perfect product innovation would combine and present existing technologies in such a way that it would generate a complete new market segment. For instance, the Sony Walkman is a device that combined two existing technologies, headphones and portable cassette player to create a complete new market segment. Prior to this, there was no portable personal music device segment that existed in the market.
However, it is also true that while some product innovations worked, sometimes it becomes pertinent to keep some things the way that it is. For example, Coca Cola has been producing the same flagship product for about a century, keeping it the way the customers want it.
Innovation has always been looked upon as a means to enable businesses to stay ahead in competitive market driven economies. However, to make successful innovation programs, the focus of any company should be three-fold:
1) Influence innovation networks among all stakeholders to increase the influx of ideas and ready to use solutions to business issues.
2) The company has to maintain transparency across the entire innovation chain, to track success of such initiatives and anticipate downstream challenges.
3) Lastly, understand the reward systems for teams that are working on disruptive ideas. The collaborative ecosystem would enable the innovation teams to drive new ideas into fruition.
Only the companies that have been successful in building and managing their innovation potential are most likely to profit in such fast moving economies. A solid innovation strategy needs to be implemented and developed which would include the best ideas. Furthermore, no innovation can be successful without the support of a solid leadership at all levels and support functions.