Innovation in Organization - Essay Example

 Innovation in Organization Introduction Innovation is often referred to as a critical factor fuelling the growth of an organization (Afuah, 1998). Innovation also acts as a driver of future success and is the engine that facilitates business houses to maintain their viability in the global market (Verona and Ravasi, 2003). Both researchers as well as business managers deem innovation as “life-and-death matter for a firm” (Weiss, 2013). The extreme threat of competition and continued need to fight for survival fosters organizations to bring innovation into their system. Researchers from the field of business and management have found that organizations which have the capacity to innovate can respond at a much faster pace to the challenges of the environment than companies which lacks innovative capacities. Moreover, several studies have also highlighted that innovative organizations perform better than the organizations which are non-innovative. However, innovation cannot be an external phenomenon; rather it is purely internal. For a company to get success depending on innovation, it is not sufficient to bring new ideas or products that change the entire market landscape, but the organization must have the ability to absorb the innovation (Agarwal, Erramilli and Dev, 2003; Betz, 2003). The ability of an organization to absorb innovation is critical towards the success of a company. According to Van de Van, Polley and Venkataraman (1999) “organizational creation is fundamental to the process of innovation”. The extent to which an organization innovates is the pre-state for the efficient utilization of the new technologies and resources. The introduction of new technology often tenders complex challenges and opportunities for the organizations that in turn lead to changes in the management practices and emergence of new organizational forms. As a result of that technological and organizational innovation are often stated as intertwined. Schumpeter (1950) also emphasized that innovation in the form of a new product or new process often brings organizational changes and can even be the cause of creative destruction for organizations (Lam, 2004). This study examines the extent of innovation in a chosen organization. In this context, the study will put emphasis on the particular innovation aimed by the organization to deliver to its users, the other possible solutions were considered, the main obstacles and resistance that were met in developing the innovation, networks that were used by actors within and outside the organisation in order to generate, support, and implement the innovation, the procedures that were in place in the organisation to facilitate the selection and development of innovations and the reasons for the success or failure of the innovation. Brief Synopsis of the Company The company chosen for this project is a corporate gift design and manufacturing company. The company currently caters to the domain of innovation of process optimisation. Understanding the situation of market, the company decided to bring some kind of innovation in their system as they consider innovation as one of the major business drivers and is a source of competitive advantage for the firms. Evaluation of product innovation and process innovation, the company identified that the first task is to bring process innovation and simultaneously focus on the innovative and creative services. In the recent past the company has identified certain loop holes in their system of operation and considers those loopholes to be the reason of theirs low market share. The company also identified that there are several steps involved in closing a call and that is affecting the company in the form of increased lead time and declining market share. The subsequent steps will identify the different factors of the company that are mentioned above. Discussion Innovation Class Innovation is often regarded as diverse activity. It can be found anywhere starting from the factory and laboratory floor, coffee shops and universities, or even at wine shop. People are always suggesting and attempting to do things in a better way. A number of scholars have even commented that “there is no monopoly to creative thought” (Greg, 2012). However, the intended innovation needs to be relevant to the context it is being applied. This is principally because of the fact that there are huge differences between a concerned and thoughtful effort and an unsystematic brainstorm. Although both efforts generates new ideas but the application of those ideas in the real world and relevance to the situation greatly differs. In an organized approach, innovation is mostly divided into four categories namely basic research, sustaining innovation, disruptive innovation and breakthrough innovation. A basic research is the type of innovative work being done at the universities or some research and development laboratories. The intention is however to discover how things work. Sustaining innovation on the other hand is the type of innovation that is excelled by organizations (Capon and Hulbert, 2007). One of the companies pursuing this type of innovation can be Apple Inc. In this case a clearly defined problem exists and an appropriate and innovative solution for the same is being pursued by organizations to solve the prevailing problems. Another type of innovation is disruptive innovation. This is a type of innovation which helps companies to create value network and develop new market and eventually disrupts the existing value network and market (Anthony, Johnson, Sinfield and Altman, 2008). Furthermore, it also displaces the previous technology and puts in new technology (Wördenweber and Weissflog, 2005). The last one is the breakthrough innovation, in this context, the problem of the study is well defined but the course of solution is not clear enough. For example, the discovery of DNA structures and transistors the most appropriate examples of breakthrough innovation. In the context of the company of this case, it can be stated that the company has pursued disruptive innovation. This is principally because of the fact that the company has tried to displace their old technology to serve the customers and has tried to implement new technology to serve the consumers. Figure 1 - Innovation Matrix (Source: Greg, 2012) Innovation can be also grouped according to the materialization. There are two broad categories of innovation namely emergent and continuous innovation. However, their root lies at the basic definition of innovation: “something fresh or new that creates value, but there are numerous key differences.” Continuous in often considered to be synonymous with the product or process improvement, progression, fresh iterations, growth, new enhancements, efficiency and incremental changes. On the contrary, emergent innovation is highlighted as something which bring into limelight radical ideas, breakthroughs, paradigm-shifting results, disruption, market creation and raw novelty. In this context, the company is working on the innovation of process optimisation and is aiming to offer the customers with web-based software in which customers will have the opportunity to provide a sample design. Hence, the innovation can be deemed as an emergent innovation as this process has the ability to provide paradigm shifting results and can be a breakthrough for the company (Christensen and Raynor, 2003; Coombs and Hull, 1998). Among the available types of innovation such as product innovation, manufacturing technology innovation, information technology innovation, management system information and organizational innovation, the intended innovation for this company can fall in the category of information technology innovation. Since, this innovation involves high end usage of information and technology; it can be easily regarded as an information technology innovation (Dalal, 2007; Damanpour and Schneider, 2006; Damanpour, 1991). One of the biggest advantages of putting information technology innovation into practice is that it allows lower cost base as well as better customer service. Furthermore, the employment of information technology innovation will allow the company to have better understanding of the customers. Hence, decision of the company to bring innovation into the company in the form of information technology is highly justifies. Particular Innovation Aimed Every company try to bring innovation for the principal purpose of streamlining the business process. The innovation of the companies is also aimed at increasing the value of the company. A number of cases have been found which show that innovation acts as a competitive advantage for a firm. For example, Apple Inc. is a corporation whose business is mostly driven by innovation. The product of the company also reflects high amount of innovation. Hence, a company can also bring innovation for the purpose of gaining competitive advantage in the market place. Another vital part is the customer aspect. Companies also bring innovation into their system for the purpose of satisfying the customers by offering them with creative and quality products. In addition, the service delivery to the consumers is another critical part and is given high importance by the companies around the world. Therefore to improve the service delivery process and offering the customers with high quality products, companies often consider bringing innovation. Lastly, another common cause of bringing innovation into the company is enhancement of the overall productivity of the company. Lean manufacturing and implementation of inventory management software are some of the examples of innovation in companies by which they can enhance the overall productivity of the company. In the similar way, companies bring innovation according to their need or the prevailing problems. As mentioned earlier, the case study has made it evident that the company aimed to bring information technology innovation into their system of operation. The company pursued this information technology innovation with the help of disruptive innovation. The company attempted to optimise the process by which they are intending to deliver the product. The company basically took assistance of information technology and tried to offer customers with a platform that will allow the customers to provide their intended and sample design of the work. It is generally web based software on which the customers can portray their requirements in a meticulous manner. Moreover, the company will also be able to quote the price accurately as the requirements of the customer will be more apparent. Although, the innovation was brought in by the development of a web-based software, but the company is not selling the software as a product to the consumers and as a result of that this innovation cannot be termed as a product innovation. Hence, judging it as an information technology innovation or process innovation is fully justified. The principal intention of the company was to offer the customers with the opportunity to illustrate their needs. This will allow the customers to present their exact needs and as a result of that customers can draw high amount of satisfaction from the end product. The communication between the company and the customers also gets enhanced to a large extent. In general terms, the innovation was aimed to enhance the customer-company communication and understand the needs of the customer better. Apart from that, the implementation of customized product designing software and price calculator will allow the company to minimize the unnecessary steps of communication which may lead to elongated process. However, if nonfigurative basis is considered, the innovation was principally aimed to increase the value of the company by embracing more customers, satisfying them and fulfilling their needs to the highest possible extent. Other Possible Solutions Considered A company has to deal with several challenges in order to deal effectively in the market. Moreover, due to the increased turbulence in the business environment, companies are even finding difficulties to survive. The problems faced by companies in general are of different types and the root causes of those problems are either from the internal environment or external environment of the organization. For example, the problems of a company can be its weak distribution channel, low productivity of the employees, lack of sales skills, incompetent products or low market size. The changing nature of customer needs is also another cause of concern for the companies. Furthermore, the advent of technology, some companies are falling behind for not taking its assistance. The companies which have successfully implemented information technology gain an upper hand over the competitors. As a result of that companies have to make continuous evaluation of their system and if necessary bring the required changes for moving at par with the market trends. . The case study has made it evident that this company has two major problems. One is related with the identification of the customer needs and the other one is related with the process of service delivery. In the context of understanding customer needs, the company initially used to send sales person to know the requirements and the sales person in turn used to convey customer needs back to the designers. However, due to the lack of technical knowledge and expertise in the field of designing, the sales persons often fumble in portraying the need of the customers. As a result of that both customers and designers faces the dilemma. The resultant is that none of the group is able to get their desired results. For example, despite specifying the needs, the customers often did not get what they desired. In the similar way, the designers also fail to get detailed information about the end products, which greatly impacts the manufacturing process. On the other hand, sending the designers directly to the potential customers would have allowed the company to know customer needs in details. However, the biggest problem in this context is the lack of sales skills of the designers. Due to the lack of sales skills of the designers, the company may even end up losing the customer. This will in turn have a fatal effect on the company as they will not only lose revenue and a potential customer, but their image may also get dented. However, in order to address this issue the company has alternatively thought of sending two people to inquire customer requirements. One of them can be from the designing department and the other one can be from the sale team. Apart from that, to reduce even this cost, the company has chosen to optimise the process of understanding the requirement of the client. The second challenge was related with the process of service delivery. In this context the company has earlier chosen to offer the customers with the option to tender their needs over the web-based software platform. However, it still had loopholes as the customers or some group of customers found difficulties in operating with the internet based application. Moreover, in order to know the probable price of the end products, consumers have again reverted to the sales person and got the price quotation. This in turn elongated the process and increased the steps of communication. As a result of that the company have also offered an alternative course to the potential customers. In this context, the company integrated price calculator in the website, so that customers can know about the price at an instant. In the meantime, apart from taking assistance of the information technology, the company also thought of making modifications in their training programs. The company is seeking to train employees in every aspect of the business so as to ensure every employee holds the ability to deal with customers. Main Obstacles and Resistance in Developing the Innovation There is hardly any change in the organization that has been implemented without facing any kind of obstacles. In the similar manner, the company also faced several resistances while implementing the innovation in the organization. In general there are several obstacles or resistances faced by organizations around the world to implement a new and innovative product or process. The resistances appear in the form of consumer resistance and employee resistance. A breakthrough product or process may require the customers to shift their habits and adapt to new tradition and values. In this part only, the resistance takes place as customers are often reluctant to change. A conflict with the consumer belief structure also takes place. In order to ensure, customers to accept a new product or process, there is a need of colossal behavioural shifts in the status quo so that the consumers find the innovation to be acceptable and satisfactory. However, failure to achieve this may cause negative attitude of the consumers towards the product or process. In the similar way, companies often come across the issue of resistance to innovation from the employees of the organization. The employees of organizations sometime act as a strong resistance to the implementation process of innovation. One of the major reasons of the resistance from the part of the employees towards the implementation process of innovation is that, employee’s sometime doubt that their current state of affair may get hampered as a result of change. For example, implementation of a new process, based on information technology will seriously be a cause of concern for many employees who are not enough familiar with the new technology. They doubt that this change can make them outmoded and obsolete from the industry. Believing in this fact, employees bring strong resistance from the company. In the similar way, the company mentioned in this study have also faced certain limitations in the process of implementing the changes. Some of the challenges faced by the company in developing their innovation are as follows: - One of the biggest resistances to the company mentioned in the case study came in the form of managing the sales process. The company attempted to offer customers with a platform or a web based solution in which the customers can portray their needs in a complete form and simultaneously the company can understand the needs of the companies in a better way resulting in better coordination among the customers and the company. However, the obstacle in this context came in the form of customer’s inability to operate the web based software. The company doubted that a number of customers will lack technical knowledge or the required knowledge to work on a web based software and the customers will not be able to operate with it properly and hence may fail to come up with their exact need. This in turn may create confusion and miscommunication among the company and customers. Another major obstacle emerged in the form of the lack of out-knowledge of the employees. For example the designers seriously lack selling skill and on the other hand, sales personnel lacked designing knowledge. This was not at all adhering to the innovation brought up by the company. As per their intended service delivery program, each employee group must have knowledge on other business domains. Another obstacle came in the form of customer preferences. As per the design of the process delivery, the company is supposed to be sending a draft of the work to the consumers, but if the customer did not like, the design may need to be changed. Although, it will mitigate the risk of increased production cost, but can delay the process. Lastly, a strong resistance can come from the part of the employees. The HR department of the company is planning to train and impart knowledge on the employees about the different domains of business. In this context, the employees of the company can strongly resist this initiative. For example, the designers may be reluctant to carry out sales activities and the same applies for the sales team. Networks used by Actor to Implement Innovation In order to generate, support, and implement the innovation within the organization, the company has used networks from both internal and external environment of the organization. One of the network used by the company are the supplier networks. The intended innovation of the company is highly dependent on the suppliers of the company. After an order is accepted by the company, it has to depend on the suppliers for the raw materials and the profitability of the company is also dependent upon the price quoted by the suppliers. As a result of that suppliers are crucial networks for the company. Another network used by the company is internal employees. The support of employees is extremely essential in identifying the problem being faced by the company and develops a simultaneous solution for the same. Information technology network is another critical tool used in the process of generating, supporting, and implementing the innovation. Procedures in Place in the Organisation The company earlier used to operate manually in the market without any assistance of the technology. The process was also simple but at times failed to function properly. In order to take orders from the customers, the company had a separate sales team. The sales team used to visit the customers and know the customer requirement. The sales personnel in turn would revert to the designer by specifying the needs of the customers. In some cases, either due to the improper understanding of the client’s requirement or improper specification of the client regarding the requirement caused serious troubles for the company. As a result of that the company often failed to deliver the exact requirement of the client and that has negatively impacted the company’s reputation. In order to curb this issue, the company launched an online platform where the customer can by themselves specify their requirement and the designers could directly access it to know requirements accurately. Despite, the launch of the online platform the company is finding some sort of complexities in understanding the needs or sometimes customers are not being able to specify their needs exactly due to the lack of knowledge of computers. In order to deal with these issues the company recommended undertaking the following measures: - The company is recommended to follow-up a customer after he/she has provided a draft design. Furthermore, if necessary, the company should also send its consultants to the customer’s place for better understanding of the customer needs. In addition, the company is also recommended to train the employees on different business domain so that employees can handle queries from different domains. Reasons for the Success or Failure of the Innovation The assessment of the case portrays that the innovation of the company was a success. It not only helped the company to enhance their process but has also helped the company to know the requirements of customers in a comprehensive manner. In the similar way the customers of the company were also benefitted by this approach. This is principally because of the fact that they are getting the opportunity to specify their needs in a comprehensive manner. Furthermore, the company has also proposed to offer the customers with sales support if they are not enough comfortable with the web base software solution. Hence, the only conclusion that can be drawn from the case analysis is that the decisions of the company to bring in innovation in the form of information technology innovation as a change of service delivery procedure are fully justified. With this implementation the company also succeeded to satisfy their existing customer base and tapped new genre of customers. The profitability margin and revenue of the company also rose up to a great extent. Lastly, it should be also mentioned that the company must bring such changes at a periodic interval in order to ensure its presence in the market for a longer period of time. Conclusion The case was about the innovation brought up by a company to streamline their service delivery process. The study revealed that the company tried to implement the innovation for delivering better products to the end users. In order to do the same, the company took assistance of information technology and developed an online platform or web based software where the potential customers can render their needs and can know about the possible price they have to pay. This initiative of the company will not only help them in tapping more customers but will also help in converting the general consumers to loyal customers of the company. Therefore, the decision of the company to bring disruptive innovation in the form of information technology is truly justified and can be source of competitive advantage for the firm. Reference List Afuah, A., 1998. Innovation management: strategies, implementation and profits. Oxford: Oxford University Press. Agarwal, S., Erramilli, M. K. and Dev, C., 2003. Market orientation and performance in service firms: role of innovation. 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