Innovation: A Strategy for Success - Research Paper Example

Innovation: A Strategy for Success In a highly competitive environment, no business or corporate can hope to survive, least of all emerge asa winner, without being innovative. Innovation is the new and not-so-new mantra for success in the business world. It needs to become the oxygen and life-blood of an organization in order to refresh itself constantly and to beat the many challenges that emerge in the global marketplace. This paper briefly examines and illustrates the need, nature, scope, strategies, and benefits of innovation for businesses and corporates. Why Innovate Corporations and business enterprises need to ensure better top-line growth and greater bottom-line profits in order to succeed and to sustain their businesses. This can hardly be possible unless they demonstrate an ability to churn out newer and better products or services that meet the ever-changing needs of the marketplace worldwide. New product development must necessarily take into account not only the latest developments in technology and tastes but also the phenomenal growth in information and knowledge sharing channels. Online shopping, e-commerce and web-based marketing, online market surveys and virtual technology development centres have emerged as ubiquitous realities with the turn of the 21st century. Innovation holds the key to facilitating appropriate change management strategies capable of seizing upon the emerging opportunities and delivering newer products and services with USPs. Corporations need to not only initiate the innovative process, but also sustain innovation in a continuous manner through the design, validation, and implementation of appropriate models for success. As Dr. William E. Coyne observed, "most modern companies now recognize that the best way to increase corporate earnings is through top-line growth, and the best route to top-line growth is through innovation." (2000) What is Innovation Dr. William E. Coyne of 3M aptly observed in the 5th UK Innovation Lecture: Innovation needs to be a corporate character trait, one that is built over time-a tradition. Clearly, the person who starts a company is an innovator; the challenge for those who follow is to sustain that willingness to embrace new things and new ways of behaving" (1996) Innovation is all about imagination and creativity. It deals in new ways with people, products, and processes. It looks inwards and outwards to sense challenges and opportunities, and to adapt the latest strides in information and communication technology (ICT), knowledge management and software development, people management and product development. Innovation looks out of the box to work out ways and means to turn threats into opportunities and challenges into winning strategies. For instance, the UK Department of Trade and Industry, while unveiling the strategies for facing new challenges, defines 'innovation' thus: "Innovation - the successful exploitation of new ideas, incorporating new technologies, design, and best practices - is the key business process that enables UK businesses to compete effectively in the global economy." (2005). The 3M Model A shining example of success through innovation can be seen in 3M, a large transnational corporation that is globally known for a mostly unrelated product mix ranging from Post-it notes to Scotchguard fabric protectors. This company, originally founded in Minnesota in the year 1902 as 'Minnesota Mining and Manufacturing Company', today operates in as many as seven diversified areas that include safety and security, communications, healthcare, graphic displays, transportation, consumer stationery, and industrial business. (3M.com, 2005). Having believed in the power of innovation from the word 'go', 3M brought out the world's first ever waterproof sandpaper in 1920, invented the Scotch adhesive tape and masking tape in 1925, and went on to innovate, invent, and introduce newer and newer products at regular intervals. Today the company has a massive array of product lines with over 50,000 products. With over 8,000 staff out of a 70,000-strong workforce deployed in R&D, and operating with 30 technology platforms in over 62 countries, this company holds the distinction of launching over 500 new products every year. This can hardly be possible but for the strong emphasis that 3M has always placed on innovation. (2005). Innovation Planning The recipe for successful corporate innovation primarily consists in proper planning and linking of corporate objectives with the organisation's capacity for innovation. More than mere intention, it is continual commitment and implementation of ideas that can really make a difference and spell success through innovation. Mark Turrel cites the results of a study conducted by Imaginatik Research to unveil this strong bond that connects organizational goals with idea generation and management of innovation. (2005). When we talk of the innovation planning process, it is not so much a macro-level plan or corporate strategy that matters as much as the micro-level plans for implementing a project to test and develop an innovative idea. Jeffrey Baumgartner has identified six steps in innovation planning, commencing with the initial planning process and ending with the actual implementation of the plan. (2004) The intermediary steps include idea generation, initial evaluation, report, and pre-implementation trials. The planning process should consider some key factors such as the goal or the problem at hand; the participants involved; the budget implications; the resources required and available; the time schedule; and the rewards factor. (2004). First of all, the innovator needs to identify the objective behind the idea - whether the goal of the project is to introduce a new product or service; whether it is for profit or additional revenue generation or as an add-on free service; the target beneficiary in terms of age, income, and other categories; the scope of the project, be it long-term and strategic or simply a technology demonstration exercise. The participant profile in a project also needs to be identified, be it within the organization or outside, be it survey groups or outsourced research candidates. It is also a good idea to announce the reward kitty in advance as a motivator. It could be in the form of cash rewards, promotions, stock options, or even a team reward. Idea Generation There are several methods of idea generation that innovating companies adopt. The most common of them is the brainstorming, and ideas campaign through 'idea-box'. Other methods include mind mapping, innovation audit, and even online surveys for idea generation. Brainstorming is best in case of small teams, especially when there are time constraints. It involves an open forum for spontaneous sharing of ideas that are welcomed without inhibitions and thrashed out and refined in the group for a final acceptance or rejection of various options that surface. Yet another form of idea generation consists in experimentation, which is most suited for technology-based ideas. For instance let us think of Michael Faraday's experiments relating to electro-magnetism. Such an invention can hardly be possible with a mere brainstorming session or ideas campaign. Any idea worth its salt must pass the test of evaluation in order to succeed. Preliminary trial runs such as developing a prototype, or even market-oriented surveys and research are essential pre-implementation steps before the idea can become a unique selling proposition. Workflow Process Innovations Innovations in workflow or imaging, for example, have given excellent results to several companies. Layna Fischer cites the case of AMP and Bank of America, two companies that successfully implemented such innovation strategies (2005). The Credit Operations wing of Bank of America developed and put on stream a novel credit application imaging system with high-speed handwriting recognition features and neural robots in an innovative workflow process. This, hosted on an imaging platform provided by FileNet Corporation, was capable of dealing in excess of 14,000 applications every day, and won the Gold Award for Imaging in North America. (2005). In the other case, Sydney-based AMP, an retirement solutions provider, developed and implemented an innovative workflow and imaging process that improved productivity by as much as 42% (2005). Leadership Matters Most top-level corporate executives today are genuinely concerned about gaining the competitive advantage through innovation, though few are clear as to the best route to take to become more innovative. It is often a difficult task to decide whether the best option would be to recruit more idea-people, or to increase the R&D allocation, or to be one-up and early in product launch, or even to outsource the innovation process. Every company however realizes that if it does not move ahead fast, it would virtually be moving backward. It is also widely recognized in small and large companies alike that leadership has a major role to play in promoting innovation for success. Bryn Meredith holds up the example of Microsoft, a "company with one of the largest R&D budgets in the world" that passionately pursues innovation as a sure path to success (2005). Meredith reports how Steve Balmer, Microsoft's CEO, divulged the company's innovation plans at Stanford's School of Business in May 2005: "We are going to see more innovation in the next five years than we have seen in the past decade. If we are not innovating fast enough, if we are not innovating big enough, then we miss an opportunity to win." (2005). More and more corporate executives are today willing to experiment and encourage the craziest ideas and to adopt an "open door policy" in the matter of technology demonstrations. Meredith quotes Eric Schmidt, CEO of Google who spoke at an IT Expo in May 2005: "You want to see every conceivable demo, no matter how whacky it is. People love that. They get a chance to present All of a sudden the whole corporate culture becomes about leadership and innovation." (2005). Corporate honchos also realize that the top leadership is responsible not so much for actually generating new ideas as for encouraging the engineers and shop floor staff to "run wild" and come up with creative ideas. Schmidt said: "We prefer them to run rampant. The cleverest ideas don't come from leaders, but rather from the leaders listening and encouraging and kind of creating a discussion." (Meredith, 2005). The primary task of a corporate leader in this respect is to create a "Culture of Innovation" that encourages and enables lateral thinking and creative ideas as part of organizational dynamics (Meredith, 2005). This process also involves conscious leadership efforts to eliminate inhibitions, excessive controls, and other barriers that hinder innovation; facilitate stimulation and a rewarding environment to idea generators; provide for idea incubational facilities and projects; and to sustain the culture of innovation on an ever-renewing basis. Innovation Strategies Sustainability and continuity are as much essential in innovation as in any other domain of business activity in order that an organization not only survives but also grows. The Scottish Enterprise has aptly posted this warning on its homepages: "Business as usual equals dead in three years" (2005). An organization must plan, position, and execute a sound strategy for innovation-based growth if it intends to emerge as a winner in the competitive marketplace. Robert Karlsberg and Jane Adler have identified seven steps in a comprehensive strategy for sustaining innovation in an organization (2005). These include: Setting up of a "clear sense of direction" Ensuring "open communication" Minimising bureaucratic procedures and work processes Inculcating a "sense of ownership" Ensuring consistency in "recognition and rewards" Adequately tolerating "risk and failure" Getting rid of "projects and processes" that do not deliver (2005). Innovation can greatly help a business or organization to achieve excellence. Today we live in an era of ever-expanding information, knowledge, technology, and opportunities. A company may ignore the tremendous potential that innovation through knowledge management holds to unlock success only at immense peril to its own survival, least of all growth. The Canadian government, for instance, recognizes this fact through its Industry homepage that discloses a focus on "how to strengthen our science and research capacity and on how to ensure that this knowledge contributes to building an innovative economy" (Industry Canada, 2005). Conclusion A company, business, or nation can survive and grow by embracing innovation as a continual strategy. Thinking creatively is the first step in innovation, which no doubt is a risky activity, but fully laden with the hidden treasures of success. As Scottish Enterprise (2005) vouches, "new products, new processes and new ways of working are the results of successful innovation. They require a steady flow of good ideas, knowledge and resources." Entrepreneurs and business magnates are increasingly conceding the fact that innovation must become a habit, a second nature, and a way of life in workaday operations for any business to gain a competitive edge and to succeed in a rapidly changing business environment worldwide. References 3M.com. (2005). Homepage. Retrieved November 12, 2005, from http://www.3m.com/ ---. (2005). History. Retrieved November 12, 2005, from http://www.3m.com/intl/in/html/3mhistory.htm Baumgartner, J. (2004, November 24). Imagination: the number one tool for innovation and creativity. Retrieved November 11, 2005, from http://www.innovationtools.com/ Coyne, W.E. (2000). Working Paper. Retrieved November 11, 2005, from http://cbi.gsia.cmu.edu/papers/cbi_workingpaper-2000_01.html ---. (1996). Innovation is slippery, treacherous ground. Retrieved November 10, 2005, from http://pagini.typepad.com/pagini/2005/10 DTI. (2005). The Challenge. Retrieved November 11, 2005, from http://www.dti.gov.uk/ Fischer, L. (2005). Excellence in practice, innovation, and excellence in workflow and imaging. Vol. II. Retrieved, November 12, 2005, from http://www.wfmc.org/information/ Industry Canada. (2005). Homepage. Retrieved November 11, 2005, from http://www.innovationstrategy.gc.ca/ Karlsberg, R. & Adler, J. (2005, June 9). 7 strategies for sustained innovation. Retrieved November 12, 2005, from http://www.innovationtools.com/ Meredith, B. (2005, June 13). Innovation: a leadership issue. Retrieved November 12, 2005, from http://www.innovationtools.com/ Scottish Enterprise. (2005). Homepage. Retrieved November 11, 2005, from http://www.scottish-enterprise.com/sedotcom_home/ Turrel, M. (2005, August 10). How to connect corporate objectives and investments in innovation. 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