What is Innovation and its relevance to core strategy of Organization?
About an year back I took responsibility to run Innovation program in my Organization to drive the culture of innovation. If you go across and ask what Innovation means to individuals in an organization, most likely the answer would be different based on his or her own experience. Innovation is a mystery most companies are trying to solve, partially because of how long it takes to see results. Based on my experience would want to share my understanding about Innovation and how industry views it.
Innovation in a nutshell is “ executing an idea which addresses a specific challenge and achieves value for both the company and customer”. Value is often described as “faster, cheaper, better”. Innovation is coming up with new services, process or products to bring growth to the company either based on additional revenue, new Business models and better way to operate.
Why is Innovation so important?
Innovation is nowadays a key strategy of all of the corporates to stay relevant to the market. Many of the known brands have perished because they were not as innovative as compared to their competitors. To name a few of Kodak and Nokia (Phones).
There has been interesting studies that are done and it reveals that most successful and Innovative companies have the below characteristics
- First mover advantage
- Invest more in Disruptive innovation and have more appetite for risk
- Far ahead of their competition
- Builds cultures of innovations across functions
- Innovation is one of their core strategy
There are Types and Frameworks of Innovations and I will briefly touch upon the key concepts. Will share my views on each of the frameworks in a separate blog.
Types of Innovation based on Innovation Matrix — Market point of view
1. Incremental Innovation
2. Disruptive Innovation
3. Architectural innovation
4. Radical Innovation
Based on Organization strategy, type of Innovation is chosen and budget is allocated.
Incremental Innovation: Most common form of Innovation if Incremental. Utilizing the underlying technology changes are done to features, design or process with in the existing market. Most companies engage in this type of innovation in one form or another
Disruptive Innovation: Applying new technology or process to the existing market brings in Disruptive innovation. Known example is Apple iPhone disrupting the mobile phone market.
Architectural Innovation: Tweaking few modular components of the product or service keeping the core components the same is Architectural Innovation. Tweaks are made to meet the new market or segment demand
Radical Innovation: Creating something new for the market with new technology is Radical Innovation.
Types of Innovation based on Source
- Business Model Innovation
- Technology Innovation
- Marketing Innovation
Business Model Innovation: Ability to change the Business model to find new revenue streams and maintain competitive advantage is called Business model innovation.
Technology Innovation: Ability to generate new ideas based on Technology, capability or knowledge to produce a new solution is called Technology Innovation
Marketing Innovation: Finding new markets or creating new value propositions is called Marketing Innovation
Innovation Frameworks:
Below are some of the key frameworks widely used in the industry for Innovation.
- Design Thinking
- Jobs to be Done
- Business Model Canvas
- Doblins Ten Types of Innovation
Design Thinking:
Design thinking is an approach to problem solving that allows to combine right-brain creative thinking and left-brain analytical thinking. It is a non-linear, iterative process which seeks to understand users, challenge assumptions, redefine problems and create innovative solutions to prototype and test. Developed by IDEO, taught at the Stanford d.school
Jobs to be Done:
Jobs to be Done is a theory of consumer action. It describes the mechanism that cause a consumer to adopt an innovation. The theory states that markets grow, evolve, and renew whenever customers have a Job to be Done, and then buy a product to complete it. This makes a Job to be Done a process
Business Model Canvas:
Business Model Canvas (BMC) Fundamentally helps with the Business model innovation for Entrepreneurs and Intrapreneurs. It is a one page overview that lays out both what you do or want to do, and how you go about doing it; enabling structured conversations around management and strategy by laying out the crucial activities and challenges involved with your initiative and how they relate to each other
Doblin’s Ten Types of Innovation:
The model describes itself as The Discipline of Building Breakthroughs and aims to provide a way to identify new potential opportunities beyond products and revisit existing strategies to develop viable innovations.
Instead of solely focusing on developing different features of the product, the ten types of innovation-framework approaches innovation in a more holistic way, claiming that the best results can be achieved when all of the following categories are considered.
Design Thinking and Business model canvas are widely used to solve customer problems or to identify and deliver to market opportunities in a innovative way.
How to bring in the culture of Innovation?
Innovation should be part of the core strategy of an organization. Continuous innovation is possible only when right platform, resources and support is provided to all cross functional team with a well-defined process.
Large Enterprises will need Innovation programs with goal of creating new innovations and building their innovation capabilities. Innovation program typically consists of Innovation labs, Intrapreneur programs, Centers of Excellence (CoE), Idea challenges, Focused Ideation Events etc.
Startups can use the available Design Thinking or BMC frameworks to continuously innovate to deliver products and services.
Conclusion:
Innovation is at the core of the organization for companies to stay relevant to the market, gain efficiency, build services and products which customers love. Innovation should be one of the core values and should be culturally imbibed with every function and employees to be successful in market place.
Originally published at http://srinibala.wordpress.com on June 14, 2019.
