Creating Innovation in Firms - Essay Example

Creating Innovation in Firms Table of Contents Introduction……………………………………………………………………….3 2. Definition of key words……………………………………………………………3 3. Issues to consider when creating innovation………………………………………3 -People -Environment -Customers -market availability 4. How the above issues could generate value to the company……………………..5 5. Conclusion………………………………………………………………………...6 6. Bibliography………………………………………………………………………7 Introduction As a marketing advisor by profession, I have been contacted by Talent Management Team from Virgin Company Limited to advise them on how to develop and encourage creativity and innovative behavior in their company. Virgin Company is a service offering company and is mostly concerned with giving managerial services to other local companies that may need specialized services. The company has been in operation for a period of fifteen years and it has grown tremendously over the years. Virgin Company Limited has gained a substantial share in the market and is focusing on developing new markets in other parts of the world as part of its long term investment plans. Though the company is mostly concerned with offering its services in its local area, California, where it is based, it sometimes goes national or even international depending on the client’s needs. Virgin Company needs to understand what innovation really means and to what benefit would it be to them if they adopted such strategy. This report intends to address this concern and advise the talent management team on the strategies they can take to promote and maintain innovations that come up in their organization. Key word: Innovation which is the process through which a business idea is transformed into a good or service for the mutual good of the company and the customers. Issues to consider when creating Innovation When creating innovation, many factors need to be taken into consideration. It should be understood that any innovation that one need to up with must be economical in that it contributes positively towards the growth of the company. It must also be customer oriented and as such it must focus on the customer well being and satisfaction. When the customers are satisfied, greater financial returns are likely to be realized (Rouse, 1992). For the management to be able to know how to really create innovation, they must be aware of what are it they really need, for whom it will be developed and by whom and the circumstances under which the product will be created (pg 72). First, people are an important ingredient in the creation of innovation. Any innovation starts with creativity behavior and naturally, it is people who possess this element. People are talented in different ways and it is possible that some people will exhibit more creative behavior than others. One of the ways of identifying creative characters in a person is to focus on his skills, capability and general characteristics. This is the reason why when the companies want to hire new employees, they focus more on their academic qualifications and any past experience that they have had in related industry as the one they are considering for the job vacancy. This though, in my own view should not be the basis through which the management should focus their innovation creation agenda. Many people in the world today are innovative not in accordance with their academic level but from the style that they show creative behavior in what they do. It should be considered that level of qualification can be improved through continued training and education but style is what is naturally occurring in people. Different people have different styles of doing things and when these styles are accompanied by the necessary support, they are likely to bring out innovations that may lead to great value for the company (Krogh, Ichijō & Nonaka, 2000). Secondly, the management should consider where the innovative behaviors are developed and the environment in which they are nurtured to maturity. Some people become creative and develop wonderful innovations but their working environment, which is mostly dictated by the organization culture and working climate limit their growth and subsequent improvement. Organization culture is the traditions and cultures that are held by the company and have been in place for long and some may have been in place from the time of incorporation of the company and cannot be easily changed (Haefele, 1962). Business climate on the other hand is the styles of leadership and the management of resources that have been developed by the company so as to guide the general code of behavior within the company. This is flexible and is within the company’s powers to be flexible to accommodate the innovative behavior in the company. It is therefore important for the management to adopt a leadership style that favor the workers and ensure that the employees are relaxed and can practice their style of innovative behavior (pg 112). As such the management should ensure that the resources that are needed for creativity and innovation are readily available within the company. When the business environment is supportive and allows people to participate in various challenges, more innovative behavior is likely to be realized. Conflicts within the organization should also be solved fast and diplomatically and allow some level of risk taking to give the employees a chance to expand on their creativity. According to (Carlson, 2006) and (Dringoli, 2009), it is important for the organization to consider the products that are being invented and developed in the organization. It is a big issue and mostly concerns the line of production in which the company operates. The products being invented should have the customer interest at heart and should also act to benefit the company. As such, when creating innovation, it should be considered that customers can be a great source of creative and innovative ideas. Research has shown that where there is a good relationship between the customers and the firm, customers feels freer to even voice their concerns about how the products should be like to favor them more. At times, they can even come with ideas that can lead to new product development (Dringoli, 2009 pg 98). It is therefore important to consider how well the customers are treated and the kind of relationship that is maintained between the two to ensure that the company can benefit from them. As earlier stated innovation leads to the development of new products that are maybe expected to improve on an existing product or replace it all together. One of the begging issues that the management should consider at this stage is how they will market their innovation. It would be useless for an innovation to be developed but it does not go into the market and gain its intended value. This causes the management to access the relative advantage that the product has over and above the existing product. This could be in terms of cost, quality, quantity or even the physical appearance of the product. The company also needs to consider the compatibility of the product with the people’s needs, tastes and preferences and their culture acceptability of the new innovation (Gryskiewicz, 1999). How well the product can be tried on in a limited basis is another issue that the management should understand and consider whether the innovation is worth creating or not. How the Above Issues could generate value Once the management have understood the issues that are necessary for creating innovation in the company, it is also important that they understand how these issues can be used to create value for the company. To begin with, people are the main source of creativity and innovation. When the management understands these people and treat them with dignity, respect and allow them their freedom, they will be able to come up with good ideas that can even live long after these people leave the company (Keller, 1998). This means that the company will have more long-term benefits and may contribute to long-term financial returns to the company. Understanding the environment and the organization culture can lead to financial advantage in that the management will always work towards the improvement of the working conditions and environment in which the people work so as to create more freedom and a situation under which they can feely and explicitly air their views (pg 26). This can lead to better growth of creativity, invention and innovation of new products that can contribute towards the growth of the company. Customers, if allowed to be independent and autonomous in their thinking and criticize the company’s products, they can consequently lead to new innovations that could be of vital importance to the company. Their innovations are inexpensive and in some cases absolutely free because they come in form of opinions and suggestions. The company should therefore find ways of taking advantage of these opportunities and benefiting from them. This is also the case with understanding the market to which the innovations are to be channeled. It will serve to save the company the extra costs associated with unutilized innovation or an innovation that hits a dead rock in the market place (Aydogan, 2009). Conclusion It is important for the company to understand the issues that are vital in the creation or development of any innovation. The purpose for what the innovation is being developed; the target market and the people who will make the innovation a reality are important issues to consider. The management team should also consider offering a conducive environment that allow participative leadership style so as to give the employees a challenge to be more creative through the challenges they are subjected to. When hiring employees, the Talent management team should not rely so much on the level of academic qualification as this can be improved through continuous training and education but rather on the style of innovation that a person exhibits. Bibliography Aydogan, N. (2009). Innovation policies, business creation and economic development a comparative approach. New York: Springer. Branscomb, L. M., & Keller, J. (1998). Investing in innovation creating a research and innovation policy that works. Cambridge, Mass.: MIT Press. Carlson, C. R., & Wilmot, W. W. (2006). Innovation: the five disciplines for creating what customers want. New York: Crown Business. Dringoli, A. (2009). Creating value through innovation. Cheltenham ; Northampton. MA: Edward Elgar. Gryskiewicz, S. S. (1999). Positive turbulence: developing climates for creativity, innovation, and renewal. San Francisco: Jossey-Bass :. Haefele, J. W. (1962). Creativity and innovation. New York: Reinhold. Krogh, G., Ichijō, K., & Nonaka, I. (2000). Enabling knowledge creation: how to unlock the mystery of tacit knowledge and release the power of innovation. Oxford: Oxford University Press. Rouse, W. B. (1992). Strategies for innovation: creating successful products, systems, and organizations. New York: Wiley. Read More