Innovations in Organizations - Essay Example

Running Head: INNOVATION IN ORGANIZATIONS Innovations in organizations Name Course Lecturer Date INNOVATION IN ORGANIZATIONS Introduction As the business environment becomes astonishingly complex and increasingly competitive, companies are continually embracing innovation as one of the few remaining durable strategies of achieving competitive advantage. The concept of innovation has actually polarized headlines in the recent years as national and multinational companies seek to pursue and nurture innovation in order to retain relevance in the dynamic environment. Although universally accepted phenomenon, effectiveness of innovation is not simply founded on generation of innovative and bright ideas; it requires establishment of strategies that will promote continuous growth of innovation within the organization. In other words, leaders need to develop an innovation culture that will ensure steady growth of innovation. Innovation is driven by members of the organization which therefore implies that the ways of promoting innovation should be directed towards people. Even so, managing innovation in a diverse workforce is quite a difficult task for managers (Hirsch-Kreinsen, 2008). Ways of promoting innovation in an organization Leadership structure, systems and processes play a major role in promoting innovation. Authors and scholars across the board have recommended the use of ‘stage gate’ as an effective approach to innovation management. The stage gate model, which is now widely used in many companies, is a management tool used to direct, control and manage innovation efforts (Lawson and Samson, 2001). Surveys conducted in relation to this topic reveal that about 60% of companies in the world use one or more forms of the stage gate model. Many of the companies making up this percentage are the best companies which prefer to use a formal kind of innovation process rather than a haphazard one. Companies that use a formal approach to innovation demonstrate satisfaction of innovation performance relative to those that used informal methods. Naqshbandi and Kaur (2011) underscore the importance of managing processes during product development. Although the process of developing new products is usually the same, standardization through management of processes, takes advantage of the similarities and maximizes alternatives thus enhances creativity. Paladino (2007) contends that companies with high performance innovations have put in place a formal process of product and service development. Nevertheless, improved performance of innovation is not necessarily driven by formal processes alone as other factors have to be considered especially in the case of radical innovation. This have to do with leadership practices such as their selection methods, training and development strategies and funding. Management needs to create a climate where innovation will flourish. Essentially, an innovation committee comprising of innovation champions should be developed. The responsibility of the team is to promote, encourage, support, drive and prod innovation in the organization. Besides that, they have an active role in identifying creative thinkers and exposing them to experiences that will spark new ideas. The team also serves as a facilitator of collaboration as innovations are not just made and effected by ‘lone geniuses’. Paladino (2007) asserts that innovations are created by sharing of non-judgmental and thoughtful ideas of many people. Collaboration is basically a process of effective and sustained dialogue among all stakeholders in any given situation. Although involvement of a crowd of people into the venture may contribute to complexity, it is a rich source of diverse viewpoints that greatly promote performance of an innovation. The culture and competencies of people working in an organization also influences performance of innovation. Motivation is key to the success of any innovation project which therefore, necessitates leaders of such projects to possess considerable level of motivation and communication skills in order to boost morale of the team members. Organizational culture on the hand could promote or hinder innovation efforts. In order to promote and manage innovations, companies ought to employ human resource policies that advocate for innovations. In addition, fostering norms that encourage exploratory and creative efforts such as risk taking and correction and tolerance of mistake is also helpful in promoting innovations that require creativity and implementation. This can also be achieved by encouraging team work or group functioning as well as speedy actions to implement the innovations which are characterized by fast obsolescence. Modern organizations are characterized by fear of failure. They have a deceptive notion that innovations are expensive and might cause the downfall of the company if they failed. Whitfield (2000) challenges this idea stating that ‘failure is a prerequisite for innovation’. Ideally, should eliminate the fear of miscues by having leaders who are failure-tolerant both in actions and words. Through coaching and mentoring, they will help other employees to overcome anxieties about mistakes which will ultimately leads to an intelligent risk-taking culture that ensures sustained innovations. A culture of unlearning is also an appropriate means to effectively driving innovation in an organization. Although learning is a key aspect in driving innovation, unlearning is equally crucial as innovation gets updated at a very high rate. Another factor that accelerates the performance of innovation is rewards systems. Employees whose efforts are recognized and appreciated will tend to explore further into innovative ideas for the sole reason of benefiting from the rewards. Networks are also imperative in promoting innovations across and within firms as well as enhance diffusion of innovations within industries. Collaboration among companies is important as it enhances sustained innovations by enabling companies to gain access to capabilities and insights of each other. This form of inter-firm networking is founded on trust. When capabilities, technologies and insights are shared, benefits, risks and costs accrued from the innovation are also shared. In order to achieve this, independent intermediaries are developed serving the role of facilitating the information sharing between the companies without leaking out principal motives or identities to third parties. Tidd (2001) points out that these intermediaries are uniquely positioned to envisage the ideas and opportunities provided by different companies. He further argues that individual companies might never source such kind ideas if they worked on their own. Another way of promoting innovations is by outsourcing for innovation experts. In a business environment that is characterized by increasing consumer demand, companies are concentrating more on production thus lack time to scout for new innovative business ideas. Therefore, they opt to outsource for these reconnaissance professionals who are better in exploring new market ideas and other innovative opportunities. This is mostly common in pharmaceutical industry during the initial discovery stages of drugs. Some companies may also opt for joint venture and alliances depending on the nature of innovation being pursued. Finally, social capital and innovation have a close link. According to research, regions with tight social ties are more likely to have derailed innovations as compared to those which promote creativity, tolerance and diversity. Therefore, companies need to encourage diversity in terms of races, gender, age, culture and professional expertise in order to incorporate rich and diverse ideas. Promoting innovation within an organization comes with a new challenge of transforming workforce management. This is important in connecting or matching employees’ duties with the new innovations. Selection methods need to be reviewed so that highly talented and innovative employees are recruited into the organization. Besides that, teams should be developed to foster sharing of ideas thus reinforce innovations. Training and development strategies also need to be established to equip employees with new skills and knowledge. Management should also engage in coaching and mentoring so as to empower employees to dare innovate. Inherently, rewards systems for should be developed to reward innovative employees. This will serve an incentive for further exploitation into innovative ideas (Taylor, 2006). Innovation in Australia The prominence of innovations in Australia dates back in the 1980s. At the start of this innovative era, the government of Australia established comprehensive policies to abolish trade protection and production subsidies that had dominated for a long period. In addition, the government developed various policies to assist in developments and research as well as facilitate linkages between the government, businesses and researchers. Invent of the Australia’s National Innovation System is clear indication of the government’s commitment in keeping with the pace of globalization. Even with the governments support, the back rests on the abilities of the people to not only innovate but also to adopt to the innovations and to management them effectively. Although Australia has not been ranked among the most innovative countries in the world, it has registered improved innovation capacity over the years (O’Connor et al, 2007). The trend of innovation growth in Australian companies has been irregular being affected by various factors. The intensity of innovations which began in the 80s was driven by the serious decline in innovation performance that was previously experienced. This had consequently caused a commensurate fall in the countries overall prosperity prompting drastic research and developments in addition to other forms of innovations. Competing with greater countries in the region such as India and China, Australia has managed to emerge out as a successful innovator in several areas more notably in pharmaceuticals, automotives and engineering. Besides that Australia has a world class and broad scientific base and has magnificent success in converting knowledge into patents. These factors underscore the notion that Australians are adoptive, innovative and collaborative (Roos et al, 2005). Strong collaboration between the government, researchers and industries in Australia has been a major contributing factor to the increasing performance of innovation in the country. The Australia’s National Innovation System is a good example of such collaborative strategies and has been on the front in coordinating innovations across the country. Companies in Australia have been benefited from the government’s strategies to encourage and promote innovation as well the people’s characteristic of being innovative and adoptive. This is exemplified by Caterpillar Underground Mining (UGM) Pty Ltd which has established success through innovative capabilities. The company has developed core competencies through training and developments of its employees and in talent management. By collaborating with powerful research institutes, the organization has been able to innovate successfully thus achieve a competitive advantage. In addition, support of Australian people and government in encouraging and promoting innovations is imperative to the future of the country. First it will enable development innovative workplaces and entrepreneurial firms. This will be achieved by enhancing environments and environments for business to innovate. Second, it will increase research platforms and capabilities. The government needs to boost public funds directed towards research in government research agencies and universities such as the Commonwealth Scientific and Industrial Research Organization. Third, government interventions will enable rationalization and transformation of tax incentives so that small firms that have been suppressed by tax barriers in the past can thrive. Fourth, the current collaboration between the government, researchers and industries will foster market facing programs that will ultimately reinforce innovative firms. Fifth, the increasing need for innovation in Australia will accelerate the birth of the proposed National Innovation Council which is expected to be the central brain in achieving responsiveness, flexibility and coherence required for fruitful innovative policies (Scott-Kemmis, 2004). Conclusion Innovation is evidently a compulsory requirement for companies that seek to achieve competitive advantage. There are several ways that can be used to promote innovation within organizations. A formal approach to innovation, particularly the use of the stage gate model, is quite effective in integrating innovation into an organization. Creation of an enabling environment characterized by collaboration and sharing of ideas is also a good ingredient in promoting innovation. Selecting competent and creative employees as well as training them on creative and exploratory methods will motivate them to become innovative. Rewarding innovative employees establishes an environment where employees are constantly pursing innovative ideas. Networking is also a fundamental aspect in promoting innovation as the company gets to learn new ideas and concepts from others. Australia has established a steady growth in innovation over the years. This is majorly contributed the government’s commitment through creation of the Australia’s National Innovation System which serves a mediator between researchers and industries in addition to financially supporting innovations in various companies. Besides that, the people of Australia are innovative and adoptive which has greatly enhanced performance of innovations. Collaboration between the government and the people is a herald of an innovative Australia in future. References Hirsch-Kreinsen, H. (2008). ‘‘Low-Tech’’ Innovation. Industry and Innovation. Volume 15, No. 1, pp. 19–43. Lawson, B. and Samson, D. (2001). Development innovation capacity in organizations: A dynamic capacities approach. International journal of innovation management. volume 5, No. 3, pp. 377-400. Naqshbandi, M. and Kaur, S. (2011). A study of organizational citizenship behavior, organizational structures and open innovation. International journal of business and social science. Volume 2, Issue 6. O’Connor, A., Roos, G. and Vicker-Willis, T. (2007).Evaluating an Australian public plicy organization’s innovation capacity. European journal of innovation management. volume 10, issue 4, p.532-558. Paladino A. (2007). Investigating the drivers of innovation and new product success: a comparison of strategic orientations. Journal of Product Innovation Management. volume 24, Issue 6, p.534 – 553. Roos, G., Fernstorm, L. and Gupta, O. (2005). National innovation systems: Finland, Sweden and Australia compared. Learning for Australia. London: intellectual capital services ltd. Scott-Kemmis, D. (2004). Innovation Systems in Australia. Marsh, Volume 1, p.45-72. Taylor, R. (2006). Skills and Innovation in Modern Workplaces, An ESRC Future of Work Programme Seminar Series. Retrieved on 25th May 2012 from www.esrc.ac.uk/ESRCInfoCentre/Images/fow_publication_6_tcm6-6061.pdf. Tidd, J. (2001). Innovation management in context: environment, organization and performance. International Journal of Management Reviews. Volume 3, No. 3, pp. 169-83. Whitfield, K. (2000). High Performance Workplaces, Training and the Distribution of Skills. Industrial Relations. Volume 39, No. 1, pp.2-25. Read More