Main Drivers of Innovation and Their Influence - Term Paper Example

Innovation Table of Contents Introduction 2 1) Main drivers of innovation and their influence 3 2) Barriers of innovation 6 3) Practical challenges involved in the development of a chosen innovation 7 4) Contribution of creativity, knowledge and product design 9 Conclusion 10 References 12 Introduction ‘Innovation’ the buzzword word of the contemporary generation has captured the imagination and action of politicians, media personals, businessmen and academician alike. ‘Innovation’ combined with ‘entrepreneurship’ has opened the flood gate to a host of new activities which includes opening of new markets, enhancing economic growth and creating efficient firms. The word ‘innovate’ originated from Latin ‘in+novare’ which means “make new”. As far as the definition of innovation is concerned different experts have different opinions. Perhaps the most widely accepted definition is provided by Michael Vance, according to him “Innovation is the creation of the new or the re-arranging of the old in a new way”. Most of the products, services or processes that are considered to be innovative are often found to be either ideas or thoughts of others or rework of already existing products, services or processes (Sarkar, 2007). According to Peter Drucker innovation is perceptual as well as conceptual in nature. Therefore innovation necessitates an attitude to go out and look, ask and listen. Successful innovators are found to be using both left and right sides of their brains. In order to make the innovation process effective, the focus must be simple but intense. Most of the effective innovations are found to be exceptionally simple. (Drucker, 2003). This paper is on iPhone, an innovative product, which has taken the generation by its stride. It presents a comparative study of the major drivers of innovation and their role in the innovation process. It also scrutinizes those factors that hinder the innovation process. A study of various theories has been applied to find out the possible challenges faced by the company while developing this innovative product. The paper also includes a critical evaluation of the role of knowledge, design and creativity in the process of making an innovative product. 1) Main drivers of innovation and their influence In today’s competitive business environment, innovation is the key to success for any organization. Over the past century most of the business organizations had focused only on continual improvement of the products and services in order to gain competitive advantage. However According to Jim Clifton, CEO and chairman of Gallup Management, such approach is not enough in the current state of economy. According to him today’s organizations must come up with completely new ideas rather than marginally better ones. This was exactly what Apple did over the past few years. The company kept on innovating new ideas and successfully implemented them to introduce a product that had never been in the market before. One of such product of the company is iPhone. The word ‘innovation’ suits Apple better than any other company in the world, but the question remains regarding the role of its drivers behind the innovation process. According to Gallup Management, there are four key drivers of innovation and each of them is explained in the context of Apple and its iPhone. Finding and nurturing talent According to Jim Clifton, there are four types of people who drive innovation. They are entrepreneurs, inventors, super mentors and extreme individual achievers (artists, film stars, sports stars etc.). This statement is based on the theory that innovation is dependent on the talent of the employees in the organization. According to Marla Mayne, the senior vice president of a large US bank "One gentleman had results and more than ten years of experience. But just because your stock did well before doesn't mean it will in the future". She meant that experience does not matter as much as talent does. Talented people bring fresh ideas; organizations need to find these people and nurture them by providing suitable ambience. According to Mike Morrison, the dean of Toyota University, innovative environment is essential in order to drive innovation. There are three major elements that constitute an innovative environment. They are knowledge, motivation and technique. One of the main drivers of innovation in iPhone, is the talent and knowledge that the Apple’s employees possess. It provides an excellent environment to think and innovate. According to an employee the work environment of the company is very relaxed. Apple provides it employees with lots of reading material and other sources of information so that they can create better and bigger ideas. Prior to iPhone, Apple had curved out a name for itself by creating iPod. However the company was not satisfied with its creation and wanted to come up with something which is more innovative than iPod. Apple was able to fulfill its desire because of its talented employees who had the capacity to think out of the box Managers’ matter Creativity and innovation are different in the sense that creativity requires ‘action’ in order to become innovation. Organizations must do something with the ideas of their employees and this ‘something’ is done by the managers. Managers are those people who would analyze a new idea and say that “it’s a great idea. We can make a profitable business out of that”. Among the four categories of innovators; entrepreneurs, high achievers and inventors become irrelevant without the support of the final one, super mentors. (Mika, January 11, 2007). Managers in Apple have always played an important role in executing the idea. Without the support of the management the idea of iPhone would have remained an idea only. Relationships Relationships are crucial for the success of an innovation. Talented managers understand the role of relationships in making an innovation successful. Managers have the control of either enhancing or limiting the contribution of an employee to the innovation process and this control is heavily influenced by the relationship between the managers and the employees. The relationship between two managers and that of the manager and the employee are important, but the latter one is more crucial because it leads to the failure of the innovation. Relationship with customers is also important for an innovation to be successful. In the current competitive business scenario, it is very important to have a clear understanding of the needs and wants of the customers before nurturing a new idea. As far as Apple is concerned, it has maintained an effective relationship with its customers throughout the world. This relationship has enabled the company to decipher the specific wants of the customers. Apple is a master in predicting customer demand. After the success of iPod, the company knew that its customers are looking for something better and more innovative than the existing one. Based on this understanding the company decided to come up with the concept of iPhone. Keeping right leaders In order to foster the innovation it is crucial to have the right leader at the top. It has been found that after the retirement of the present CEO, the company is struggling to find a suitable replacement. The main reason is the lack of talent and relationship building skills in the key players for this position. Presence of the right leader at the top position of the company is crucial for the success of any innovation. Apple is led by Steve Jobs. He belongs to the breed of those rare leaders in whom leadership meets innovation. Any organization led by such leaders is bound to be more successful than others. When Apple came up with iPhone, most of the leading newspapers in the world published the picture of the devise along with Steve Jobs. The word ‘innovation’ is better described by the name ‘Apple’ and its leader Steve Jobs. 2) Barriers of innovation It is true that innovation is necessary to stay ahead in the competition, but unfortunately most of the innovative ideas fail to materialize in the real market. There are several factors that can be considered as barriers that hinders innovation. Some of the major barriers that are affect the innovation process are explained here. Scarcity of ideas Ideas are scarce, especially those ideas which could be further worked upon. It has been observed that most of the new ideas are actually other’s ideas or a modified form of some existing ideas. It is difficult to find any idea which is completely unique in nature. There are various psychological factors that act as barriers to the process of generation of new idea. These barriers could be perceptual, emotional, environmental, cultural and intellectual in nature. Problems regarding knowledge sharing Often people are found to be reluctant to share their knowledge because they are of the opinion that transmitting and sharing knowledge would empower their co-workers who are often considered as competitors. This would in turn affect their professional status. However contrary to it, knowledge sharing actually enhances the ability to come up with new ideas. Organizational barriers Barriers of innovation might come from both inside and outside of an organization. Barriers that exist inside the organization can be in the form of low funding, poor leadership, incorrect measures, inefficient employment policy etc. Some barriers exist outside the organization. Various factors like size of the industry, type of the industry, regions where the firm operates often hinders the process of innovation (Stokic, Sorli, 2009). 3) Practical challenges involved in the development of a chosen innovation There are several challenges that an organization face while developing the process of innovation. According to IT giant IBM there are mainly five challenges that constantly show up. These are risk avoidance, inadequate funding, time commitments, incorrect measures and ‘siloing’. Each of these is briefly explained below. Risk Avoidance Human nature does not generally encourage risk. People are more concerned with their own health, peace of mind and wealth. However it has been observed that without taking calculated risk no individual or organization can make progress in the long run. People tend to run away from innovation because of its risky nature. Many organizations by tradition do not nurture innovative ideas. Sentences like “we have never done such things before” come as a reflex when any innovative idea comes up. Moreover when the organization identifies the risks associated with the innovative idea they simply stop working on that idea. So, it can be said that risk avoidance is a major barrier to innovation. Inadequate funding Funding has been one of the main hindrances to the success of any innovation. Managing money to fund an innovation means that money would be taken away from another established program. Moreover the annual funding cycle of the organization might not match up with the real world situations. As a result taking out money at the right time might prove to be problematic for the organization. Some ideas might require a longer time to get properly implemented. In such a case it often becomes difficult for the organizations to supply money on a constant basis. Time Commitments Time constraint is another major barrier of innovation. Management must ensure proper utilization of each and every minute properly. Any innovative idea requires significant amount of time to become a final product which can be sold to the customers. Incorrect measures There are many organizations where principle measures of performance are market share, profits and revenue. The main reason for considering them is that they are quantifiable in nature. However there are several other factors that can also be used to measure the performance. Some of them are knowledge, reputation, leadership and talent. Innovation is an intangible thing which is tough to explain in the form of return on investment. However innovation is one of those things that help the company to gain competitive advantage in the long run. Siloing There exist certain rules, regulations and boundaries in every organization. These rules enable the organizations to get credit, to create identities, to sustain and to survive. It might happen that going beyond these rules and regulations would benefit the company but the company usually defends them. Innovation, by nature tends to create new categories and cross boundaries. This explains the company’s resistance for most of the innovation processes. (IBM, November 2006) 4) Contribution of creativity, knowledge and product design It might seem that creativity is similar to innovation. However in practice there exists a huge difference between creativity and innovation. According to Theodore Levitt of Harvard Business School, creativity is “thinking up new things” whereas innovation is “doing new things” (Clegg, 1999). According to Barry Conchie of Gallup "Creativity may spur innovation, but there's an element of action missing there." (Mika, January 11, 2007). So it can be said that creativity is an important element of innovation. Knowledge is needed for the final execution of an innovation. A great idea will be of no use if it is not handled properly and in order to do this knowledge is required. Knowledge is necessary to understand the importance of an innovation in an organization. On the other hand product design is the ultimate reflection of an innovation. The innovativeness of an organization is reflected through the features and designs of its product. As far as Apple is concerned, its innovativeness is best understood by analyzing the features and designs of iPhone. Before reaching the launch of iPhone, Apple did travel a long distance. The process started with the inception of a creative idea that turned into an innovation with the constant support of the knowledgeable people in the company who understood its significance and executed it to produce the iPhone that we see today. Conclusion Innovation is one of the most important factors that keep an organization ahead of its competitors in the long run. There are factors that either act as drivers or obstacles of innovation. There could be several challenges that can affect the process of development of an innovation. Creativity is an important element of innovation and knowledge is required to understand innovation. Both coupled together has produced an innovation of its kind for Apple. iPhone can be safely called as one of the most innovative products made in the decade . However this has failed to make Apple complacent with its success, for it has come up with a brand new series called iPad. References Clegg, B. 1999, Creativity and innovation for managers, Butterworth-Heinemann Drucker, F. P. 2003, Peter Drucker on the Profession of Management, Harvard Business Press IBM, November 2006, Five barriers to innovation: Key questions and answers, IBM global services center, [Online] Available at: http://www-935.ibm.com/services/us/gbs/bus/pdf/g510-6342-00-5barriers-etr.pdf [Accessed on February 26, 2010]. Mika, S. 11 January 2007, The Four Drivers of Innovation, Gallup Management Journal, [Online] Available at: http://gmj.gallup.com/content/26068/the-four-drivers-of-innovation.aspx [Accessed on February 26, 2010]. Sarkar, S. 2007, Innovation, market archetypes and outcome: an integrated framework, Springer Stokic, D. Sorli, M. 2009, Innovating in Product/Process Development: Gaining Pace in New Product Development, Springer Read More