Innovation and Business, Innovation of Business, Business Innovation Ideas
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In economics, Innovation in Business and government policy - something new
must be substantially different, not an insignificant change. In economics the change
must increase value, customer value, or producer value. Innovation of Business
is intended to make someone better off, and the succession of many innovations grows
the whole country's economy.
The term Innovation and Business may refer to both radical and incremental
changes to products, processes or services. The often unspoken goal of
Business
Innovation
is to solve a problem.
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Consider the issues on this page when you're in the thinking stage of Business Innovation. Business Innovation is an important topic in the study of economics, business, technology, sociology, and engineering. Since the Innovation of Business is also considered a major driver of the economy, the factors that lead to Business Innovation are also considered to be critical to policy makers.
When prospective customers had a business or had it on their mind,
traditionally, Softhard Solutions was able
to provide them with accounting software (often also hardware) to run their business
the way they do the business.
There were, at many times, Softhard Solutions' customers who did not quite
have a clear picture of how to do Innovation in Business they wanted to do
or undertake.
This page is dedicated to people wanting to Innovate Business. Its all tips
and 'need to know' how to do Innovation in Business and what to do
before a beginning.
Classic Definitions
The classic definitions to how to do Innovation in Business include:
-
The act of introducing something new: something newly introduced (The American
Heritage Dictionary.
-
The introduction of something new. (Merriam-Webster Online).
-
A new idea, method or device. (Merriam-Webster Online).
-
The successful exploitation of new ideas (Department of Trade and Industry,
UK).
-
Change that creates a new dimension of performance (Peter Drucker Hesselbein,
2002).
- The process of making improvements by introducing something new.
In economics, Business Innovation and government policy - something new must
be substantially different, not an insignificant change. In economics the change
must increase value, customer value, or producer value. Innovations are intended
to make someone better off, and the succession of many innovations grows the whole
economy.
The term innovation may refer to both radical and incremental changes to products,
processes or services. The often unspoken goal of innovation is to solve a problem.
Innovation is an important topic in the study of economics, business, technology,
sociology, and engineering. Since to Innovate Business is also considered
a major driver of the economy, the factors that lead to innovation are also considered
to be critical to policy makers.
Getting Started
Before you get started with your Business Innovation, find out if people are interested in buying your products or services. Find out who your competitors are and whether the market can sustain your business. Conduct some research to see whether your idea is really feasible. This will involve gathering, analyzing and evaluating information to help you formulate your Business Innovation goals.
Innovation in Business increases the likelihood of any business succeeding,
however most people do not know where to start. People often think of innovating
as just invention. Innovation is more than that. It is also about new ideas and
responding to new trends and market conditions, or making improvements to products
and services that already exist.
As a starting point for Innovation of Business, new ideas are needed. These
ideas will form the basis for new products, services or processes which will satisfy
a need, be the result of an opportunity or solve a problem. Ideas can be sourced
from any number of areas including customers or a problem you may have encountered.
While there are no sure-fire ways to guarantee success in creating great ideas,
one of the best ways is to listen to your customers.
Also remember everyone in the business has the potential to be creative. Each employee
will have a different viewpoint or may come from a different background. This will
help in the variety of ideas created. Even the smallest idea can be the cause of
a productivity improvement.
In order to start increasing the flow of ideas required to increase innovation in
your business, there are a number of basic organizational characteristics which
can be addressed to support an innovative business culture. These include:
-
The internal culture of a business and the external culture in which it operates
will influence the ability of a business to innovate. Innovation thrives in a culture
that is not afraid of risk-taking, promotes the value of experimenting, is adaptable
and rewards enterprise. An Innovation of Business usually needs to be led
from the top management of the business.
-
In order for a business to be innovative, it must be flexible and open to new ideas.
Managers need to adopt a positive attitude and focus on the potential for enhancing
competitiveness through innovation.
-
The allocation of resources for innovation including finance and personnel is dependent
on management understanding the benefits of new ideas. Unfortunately business expenditure
on innovation is often characterized as expenditure rather than investment, and
improvements to operational processes may not be seen as innovation at all. Resources
need to be allocated to innovation, even if it is only giving employees time to
come up with new ideas.
-
A free flow of information and ideas up, down and across the business encourages
the development of new ways of performing tasks and can also lead to the development
of new products. Processes which allow employees to suggest improvements and ideas,
circulate these ideas and be rewarded for their entrepreneurial behavior can be
implemented.
- A culture of continuous learning can be encouraged by supporting training programs and on the job training to enhance innovation skills.
There is also a range of support available to help your business to be more innovative. You can obtain information from your local, State or Australian governments, industry associations, chambers of commerce, business enterprise centres or a range of private sector business advisers. For a list of some of these contacts see Australian Governments - Innovation assistance and advice.
Introduction
In the organizational context, Innovation of Business may be linked to performance
and growth through improvements in efficiency, productivity, quality, competitive
positioning, market share, etc. All organizations can innovate, including for example
hospitals, universities, and local governments.
While Innovation of Business typically adds value, innovation may also have
a negative or destructive effect as new developments clear away or change old organizational
forms and practices. Organizations that do not innovate effectively may be destroyed
by those that do. Hence Business Innovation typically involves risk.
A key challenge in Business Innovation is maintaining a balance between process
and product innovations where process innovations tend to involve a business model
which may develop shareholder satisfaction through improved efficiencies while product
innovations develop customer support however at the risk of costly R & D that
can erode shareholder returns.
Conceptualizing Innovation
Innovation and Business has been studied in a variety of contexts, including
in relation to technology, commerce, social systems, economic development, and policy
construction. There are, therefore, naturally a wide range of approaches to conceptualizing
innovation in the scholarly literature.
Fortunately, however, a consistent theme may be identified: innovation is typically
understood as the introduction of something new and useful, for example introducing
new methods, techniques, or practices or new or altered products and services.
Distinguishing from Invention and Other Concepts
"An important distinction is normally made between invention and innovation. Invention
is the first occurrence of an idea for a new product or process, while innovation
is the first attempt to carry it out into practice" (Fagerberg, 2004: 4).
It is useful, when conceptualizing innovation, to consider whether other words suffice.
Recent authors point out that invention - the creation of new tools or the novel
compilation of existing tools - is often confused with innovation.
Many product and service enhancements may fall more rigorously under the term improvement.
Change and creativity are also words that may often be substituted for innovation.
What, then, is innovation that makes it necessary to have a different word from
these others, or is it a catch-all word, a loose synonym?
Much of the current business literature blurs the concept of innovation with value
creation, value extraction and operational execution. In this view, an innovation
is not an innovation until someone successfully implements and makes money on an
idea. Extracting the essential concept of innovation from these other closely linked
notions is no easy thing.
One emerging approach is to use these other notions as the constituent elements
of innovation as an action: Innovation occurs when someone uses an invention - or
uses existing tools in a new way - to change how the world works, how people organize
themselves, and how they conduct their lives.
Note in this view inventions may be concepts, physical devices or any other set
of things that facilitate an action. An innovation in this light occurs whether
or not the act of innovating succeeds in generating value for its champions.
Innovation is distinct from improvement in that it causes society to reorganize.
It is distinct from problem solving and is perhaps more rigorously seen as new problem
creation. And in this view, innovation applies whether the act generates positive
or negative results.
Innovation in Organizations
A convenient definition of innovation from an organizational perspective is given
by Luecke and Katz (2003), who wrote:
"Innovation . . . is generally understood as the introduction of a new thing or
method . . . Innovation is the embodiment, combination, or synthesis of knowledge
in original, relevant, valued new products, processes, or services."
.
Don Sheelen also placed innovation at the pinnacle of modern business stating that:
"Innovation is the lifeblood of any organization." Sheelan emphasizes that
"without it, not only is there no growth, but, inevitably, a slow death".
Innovation of Business typically involves creativity, but is not identical
to it: innovation involves acting on the creative ideas to make some specific and
tangible difference in the domain in which the innovation occurs. For example, Amabile
et al (1996) propose:
"All innovation begins with creative ideas . . . We define innovation as the successful
implementation of creative ideas within an organization. In this view, creativity
by individuals and teams is a starting point for innovation; the first is necessary
but not sufficient condition for the second".
For innovation to occur, something more than the generation of a creative idea or
insight is required: the insight must be put into action to make a genuine difference,
resulting for example in new or altered business processes within the organization,
or changes in the products and services provided.
A further characterization of innovation is as an organizational or management process.
For example, Davila et al (2006), write:
"Innovation, like many business functions, is a management process that requires
specific tools, rules, and discipline"
.
From this point of view the emphasis is moved from the introduction of specific
novel and useful ideas to the general organizational processes and procedures for
generating, considering, and acting on such insights leading to significant organizational
improvements in terms of improved or new business products, services, or internal
processes.
Through these varieties of viewpoints, creativity is typically seen as the basis
for innovation, and innovation as the successful implementation of creative ideas
within an organization. From this point of view, creativity may be displayed by
individuals, but innovation occurs in the organizational context only.
It should be noted, however, that the term 'innovation' is used by many authors
rather interchangeably with the term 'creativity' when discussing individual and
organizational creative activity. As Davila et al (2006) comment:
"Often, in common parlance, the words creativity and innovation are used interchangeably.
They shouldn't be, because while creativity implies coming up with ideas, it's the
"bringing ideas to life" . . . that makes innovation the distinct undertaking it
is".
The distinctions between creativity and innovation discussed above are by no means
fixed or universal in the innovation literature. They are however observed by a
considerable number of scholars in innovation studies.
Economic Conceptions of Innovation
Joseph Schumpeter defined economic innovation in 1934:
-
The introduction of a new good —that is one with which consumers are not yet familiar—or
of a new quality of a good.
-
The introduction of a new method of production, which need by no means be founded
upon a discovery scientifically new, and can also exist in a new way of handling
a commodity commercially.
-
The opening of a new market, that is a market into which the particular branch
of manufacture of the country in question has not previously entered, whether or
not this market has existed before.
-
The conquest of a new source of supply of raw materials or half-manufactured goods,
again irrespective of whether this source already exists or whether it has first
to be created.
- The carrying out of the new organization of any industry, like the creation of a monopoly position (for example through trustification) or the breaking up of a monopoly position.
Schumpeter's focus on Innovation and Business is reflected in Neo-Schumpeterian
economics.
Innovation is also studied by economists in a variety of contexts, for example in
theories of entrepreneurship or in Paul Romer's New Growth Theory.
Transaction Cost and Network Theory Perspectives
According to Regis Cabral (1998, 2003):
"Innovation is a new element introduced in the network which changes, even if momentarily,
the costs of transactions between at least two actors, elements or nodes, in the
network".
Types of Innovation
Scholars have identified at a variety of classifications for types innovations. Here is an unordered ad-hoc list of examples:
Business model innovation
involves changing the way business is done in terms of capturing value.
Marketing innovation
is the development of new marketing methods with improvement in product design or packaging, product promotion or pricing.
Organizational innovation
involves the creation or alteration of business structures, practices, and models, and may therefore include process, marketing and business model innovation.
Process innovation
involves the implementation of a new or significantly improved production or delivery method.
Product innovation
involves the introduction of a new good or service that is new or substantially improved. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension.
Service innovation
refers to service product innovation which might be, compared to goods product innovation or process innovation, relatively less involving technological advance but more interactive and information-intensive.
Supply chain innovation
where innovations occur in the sourcing of input products from suppliers and the delivery of output products to customers.
Substantial innovation
introduces a different product or service within the same line, such as the movement of a candle company into marketing the electric light bulb.
Financial innovation
through which new financial services and products are developed, by combining basic
financial attributes (ownership, risk-sharing, liquidity, credit) in progressive
innovative ways, as well as reactive exploration of borders and strength of tax
law.
Through a cycle of development, directive compliance is being sharpened on opportunities,
so new financial services and products are continuously shaped and progressed to
be adopted. The dynamic spectrum of financial innovation, where business processes,
services and products are adapted and improved so new valuable chains emerge, therefore
may be seen to involve most of the above mentioned types of innovation.
Incremental innovations
is a step forward along a technology trajectory, or from the known to the unknown,
with little uncertainty about outcomes and success and is generally minor improvements
made by those working day to day with existing methods and technology (both process
and product), responding to short term goals.
Most innovations are incremental innovations. A value-added business process, this
involves making minor changes over time to sustain the growth of a company without
making sweeping changes to product lines, services, or markets in which competition
currently exists.
Breakthrough, disruptive or radical innovations
involves launching an entirely novel product or service rather than providing improved
products & services along the same lines as currently. The uncertainty of breakthrough
innovations means that seldom do companies achieve their breakthrough goals this
way, but those times that breakthrough innovation does work, the rewards can be
tremendous. Involves larger leaps of understanding, perhaps demanding a new way
of seeing the whole problem, probably taking a much larger risk than many people
involved are happy about. There is often considerable uncertainty about future outcomes.
There may be considerable opposition to the proposal and questions about the ethics,
practicality or cost of the proposal may be raised. People may question if this
is, or is not, an advancement of a technology or process. Radical innovation involves
considerable change in basic technologies and methods, created by those working
outside mainstream industry and outside existing paradigms. Sometimes it is very
hard to draw a line between both.
New technological systems (systemic innovations)
that may give rise to new industrial sectors, and induce major change across several branches of the economy.
Social innovations
a number of different definitions, but predominantly refers to either innovations that aim to meet a societal need or the social processes used to develop an innovation.
Innovation and Market Outcome
Market outcome from Innovation in Business can be studied from different
lenses. The industrial organizational approach of market characterization according
to the degree of competitive pressure and the consequent modeling of firm behaviour
often using sophisticated game theoretic tools, while permitting mathematical modeling,
has shifted the ground away from an intuitive understanding of markets.
The earlier visual framework in economics, of market demand and supply along price
and quantity dimensions, has given way to powerful mathematical models which though
intellectually satisfying has led policy makers and managers groping for more intuitive
and less theoretical analyses to which they can relate to at a practical level.
Non quantifiable variables find little place in these models, and when they do,
mathematical gymnastics (such as the use of different demand elasticities for differentiated
products) embrace many of these qualitative variables, but in an intuitively unsatisfactory
way.
In the management (strategy) literature on the other hand, there is a vast array
of relatively simple and intuitive models for both managers and consultants to choose
from. Most of these models provide insights to the manager which help in crafting
a strategic plan consistent with the desired aims. Indeed most strategy models are
generally simple, wherein lie their virtue.
In the process however, these models often fail to offer insights into situations
beyond that for which they are designed, often due to the adoption of frameworks
seldom analytical, seldom rigorous. The situational analyses of these models often
tend to be descriptive and seldom robust and rarely present behavioral relationship
between variables under study.
From an academic point of view, there is often a divorce between industrial organization
theory and strategic management models. While many economists view management models
as being too simplistic, strategic management consultants perceive academic economists
as being too theoretical, and the analytical tools that they devise as too complex
for managers to understand.
Innovation in Business literature while rich in typologies and descriptions
of innovation dynamics is mostly technology focused. Most research on innovation
has been devoted to the process (technological) of innovation, or has otherwise
taken a how to (innovate) approach.
The integrated Innovation of Business model of Soumodip Sarkar goes some
way to providing the academic, the manager and the consultant an intuitive understanding
of the innovation – market linkages in a simple yet rigorous framework in his book
, Innovation, Market Archetypes and Outcome - An Integrated Framework.
The integrated model presents a new framework for understanding firm and market
dynamics, as it relates to innovation. The model is enriched by the different strands
of literature - industrial organization, management and innovation.
The integrated approach that allows the academic, the management consultant and
the manager alike to understand where a product (or a single product firm) is located
in an integrated innovation space, why it is so located and which then provides
valuable clues as to what to do while designing strategy.
The integration of the important determinant variables in one visual framework with
a robust and an internally consistent theoretical basis is an important step towards
devising comprehensive firm strategy.
The integrated framework provides vital clues towards framing a what to guide for
managers and consultants. Furthermore, the model permits metrics and consequently
diagnostics of both the firm and the sector and this set of assessment tools provide
a valuable guide for devising strategy.
Sources of Innovation
There are several sources of Business Innovation. In the linear model the
traditionally recognized source is manufacturer innovation. This is where an agent
(person or business) innovates in order to sell the innovation. Another source of
innovation, only now becoming widely recognized, is end-user innovation.
This is where an agent (person or company) develops an innovation for their own
(personal or in-house) use because existing products do not meet their needs. Eric
von Hippel has identified end-user innovation as, by far, the most important and
critical in his classic book on the subject, Sources of Innovation.
Innovation by businesses is achieved in many ways, with much attention now given
to formal research and development for "breakthrough innovations." But innovations
may be developed by less formal on-the-job modifications of practice, through exchange
and combination of professional experience and by many other routes. The more radical
and revolutionary innovations tend to emerge from R & D, while more incremental
innovations may emerge from practice - but there are many exceptions to each of
these trends.
Regarding user innovation, rarely user innovators may become entrepreneurs, selling
their product, or more often they may choose to trade their innovation in exchange
for other innovations. Nowadays, they may also choose to freely reveal their innovations,
using methods like open source. In such networks of innovation the creativity of
the users or communities of users can further develop technologies and their use.
Whether innovation is mainly supply-pushed (based on new technological possibilities)
or demand-led (based on social needs and market requirements) has been a hotly debated
topic. Similarly, what exactly drives innovation in organizations and economies
remains an open question.
More recent theoretical work moves beyond this simple dualistic problem, and through
empirical work shows that innovation does not just happen within the industrial
supply-side, or as a result of the articulation of user demand, but though a complex
processes that links many different players together - not only developers and users,
but a wide variety of intermediary organizations such as consultancies, standards
bodies etc.
Work on social networks suggests that much of the most successful innovation occurs
at the boundaries of organizations and industries where the problems and needs of
users, and the potential of technologies can be linked together in a creative process
that challenges both.
Value of Experimentation in Innovation
When an innovative idea requires a new business model, or radically redesigns the
delivery of value to focus on the customer, a real world experimentation approach
increases the chances of market success. New business models and customer experiences
can't be tested through traditional market research methods. Pilot programs for
new innovations set the path in stone too early thus increasing the costs of failure.
Stefan Thomke of Harvard Business School has written a definitive book on
the importance of experimentation. Experimentation Matters argues that every company's
ability to innovate depends on a series of experiments [successful or not], that
help create new products and services or improve old ones.
That period between the earliest point in the design cycle and the final release
should be filled with experimentation, failure, analysis, and yet another round
of experimentation. “Lather, rinse, repeat,” Thomke says. Unfortunately,
uncertainty often causes the most able innovators to bypass the experimental stage.
In his book, Thomke outlines six principles companies can follow to unlock their
innovative potential:
-
Anticipate and Exploit Early Information Through 'Front-Loaded' Innovation Processes.
-
Experiment Frequently but Do Not Overload Your Organization.
-
Integrate New and Traditional Technologies to Unlock Performance.
-
Organize for Rapid Experimentation.
-
Fail Early and Often but Avoid 'Mistakes'.
- Manage Projects as Experiments.
Thomke further explores what would happen if the principles outlined above were used beyond the confines of the individual organization. For instance, in the state of Rhode Island, innovators are collaboratively leveraging the state's compact geography, economic and demographic diversity and close-knit networks to quickly and cost-effectively test new business models through a real-world experimentation lab.
Diffusion of Innovations
Once innovation occurs, innovations may be spread from the innovator to other individuals
and groups. This process has been studied extensively in the scholarly literature from a variety of viewpoints, most notably in Everett Rogers' classic book, The Diffusion of Innovations. |
![]() Growth and Time of new Technology. |
However, this 'linear model' of innovation has been substantially challenged by
scholars in the last 25 years, and much research has shown that the simple invention-innovation-diffusion
model does not do justice to the multilevel, non-linear processes that firms, entrepreneurs
and users participate in to create successful and sustainable innovations.
Rogers proposed that the life cycle of innovations can be described using the 's-curve'
or diffusion curve. The s-curve maps growth of revenue or productivity against time.
In the early stage of a particular innovation, growth is relatively slow as the
new product establishes itself.
At some point customers begin to demand and the product growth increases more rapidly.
New incremental innovations or changes to the product allow growth to continue.
Towards the end of its life cycle growth slows and may even begin to decline. In
the later stages, no amount of new investment in that product will yield a normal
rate of return.
The s-curve is derived from half of a normal distribution curve. There is an assumption
that new products are likely to have "product Life". i.e. a start-up phase, a rapid
increase in revenue and eventual decline. In fact the great majority of innovations
never get off the bottom of the curve, and never produce normal returns.
Innovative companies will typically be working on new innovations that will eventually
replace older ones. Successive s-curves will come along to replace older ones and
continue to drive growth upwards. In the figure above the first curve shows a current
technology. The second shows an emerging technology that current yields lower growth
but will eventually overtake current technology and lead to even greater levels
of growth. The length of life will depend on many factors.
Goals of Innovation
Programs of organizational innovation are typically tightly linked to organizational
goals and objectives, to the business plan, and to market competitive positioning.
For example, one driver for innovation programs in corporations is to achieve growth
objectives. As Davila et al (2006) note,
"Companies cannot grow through cost reduction and re-engineering alone . . . Innovation
is the key element in providing aggressive top-line growth, and for increasing bottom-line
results".
In general, business organizations spend a significant amount of their turnover
on innovation i.e. making changes to their established products, processes and services.
The amount of investment can vary from as low as a half a percent of turnover for
organizations with a low rate of change to anything over twenty percent of turnover
for organizations with a high rate of change.
The average investment across all types of organizations is four percent. For an
organization with a turnover of say one billion currency units, this represents
an investment of forty million units. This budget will typically be spread across
various functions including marketing, product design, information systems, manufacturing
systems and quality assurance.
The investment may vary by industry and by market positioning.
One survey across a large number of manufacturing and services organizations found,
ranked in decreasing order of popularity, that systematic programs of organizational
innovation are most frequently driven by:
-
Improved quality
-
Creation of new markets
-
Extension of the product range
-
Reduced labour costs
-
Improved production processes
-
Reduced materials
-
Reduced environmental damage
-
Replacement of products/services
-
Reduced energy consumption
- Conformance to regulations
These goals vary between improvements to products, processes and services and dispel a popular myth that innovation deals mainly with new product development. Most of the goals could apply to any organization be it a manufacturing facility, marketing firm, hospital or local government.
Failure of Innovation
Attaining goals must be the ultimate objective of the Business Innovation
process. Unfortunately, most innovation fails to meet organizational goals.
Figures vary considerably depending on the research. Some research quotes failure
rates of fifty percent while other research quotes as high as ninety percent of
innovation has no impact on organizational goals. One survey regarding product innovation
quotes that out of three thousand ideas for new products, only one becomes a success
in the marketplace.
Failure is an inevitable part of the Business Innovation process, and most
successful organizations factor in an appropriate level of risk. Perhaps it is because
all organizations experience failure that many choose not to monitor the level of
failure very closely. The impact of failure goes beyond the simple loss of investment.
Failure can also lead to loss of morale among employees, an increase in cynicism
and even higher resistance to change in the future.
Innovations that fail are often potentially 'good' ideas but have been rejected
or 'shelved' due to budgetary constraints, lack of skills or poor fit with current
goals. Failures should be identified and screened out as early in the process as
possible. Early screening avoids unsuitable ideas devouring scarce resources that
are needed to progress more beneficial ones.
Organizations can learn how to avoid failure when it is openly discussed and debated.
The lessons learned from failure often reside longer in the organizational consciousness
than lessons learned from success. While learning is important, high failure rates
throughout the innovation process are wasteful and a threat to the organization's
future.
The causes of failure have been widely researched and can vary considerably. Some
causes will be external to the organization and outside its influence of control.
Others will be internal and ultimately within the control of the organization. Internal
causes of failure can be divided into causes associated with the cultural infrastructure
and causes associated with the innovation process itself.
Failure in the cultural infrastructure varies between organizations but the following
are common across all organizations at some stage in their life cycle (O'Sullivan,
2002):
-
Poor Leadership
-
Poor Organization
-
Poor Communication
-
Poor Empowerment
- Poor Knowledge Management
Common causes of failure within the innovation process in most organizations can be distilled into five types:
-
Poor goal definition
-
Poor alignment of actions to goals
-
Poor participation in teams
-
Poor monitoring of results
- Poor communication and access to information
Effective goal definition requires that organizations state explicitly what their
goals are in terms understandable to everyone involved in the innovation process.
This often involves stating goals in a number of ways. Effective alignment of actions
to goals should link explicit actions such as ideas and projects to specific goals.
It also implies effective management of action portfolios.
Participation in teams refers to the behavior of individuals in and of teams, and
each individual should have an explicitly allocated responsibility regarding their
role in goals and actions and the payment and rewards systems that link them to
goal attainment. Finally, effective monitoring of results requires the monitoring
of all goals, actions and teams involved in the innovation process.
Business Innovation can fail if seen as an organizational process whose success
stems from a mechanistic approach i.e. 'pull lever obtain result'. While 'driving'
change has an emphasis on control, enforcement and structure it is only a partial
truth in achieving innovation. Organizational gatekeepers frame the organizational
environment that "Enables" innovation; however innovation is "Enacted" - recognized,
developed, applied and adopted - through individuals.
Individuals are the 'atom' of the organization close to the minutiae of daily activities.
Within individuals gritty appreciation of the small detail combines with a sense
of desired organizational objectives to deliver (and innovate for) a product/service
offer.
From this perspective Business Innovation succeeds from strategic structures
that engage the individual to the organization's benefit. Innovation pivots on intrinsically
motivated individuals, within a supportive culture, informed by a broad sense of
the future.
Innovation in Business implies change and can be counter to an organization's
orthodoxy. Space for fair hearing of innovative ideas is required to balance the
potential autoimmune exclusion that quells an infant innovative culture.
Measures of Innovation
Individual and team-level assessment can be conducted by surveys and workshops.
Business measures related to finances, processes, employees and customers in balanced
scorecards can be viewed from the innovation perspective (e.g. new product revenue,
time to market, customer and employee perception & satisfaction). Organizational
capabilities can be evaluated through various evaluation frameworks e.g. efqm (European
foundation for quality management) -model.
The OECD Oslo Manual from 1995 suggests standard guidelines on measuring technological
product and process innovation. Some people consider the Oslo Manual complementary
to the Frascati Manual from 1963. The new Oslo manual from 2005 takes a wider perspective
to innovation, and includes marketing and organizational innovation. Other ways
of measuring innovation have traditionally been expenditure, for example, investment
in R&D (Research and Development) as percentage of GNP (Gross National Product).
Whether this is a good measurement of Innovation has been widely discussed and the
Oslo Manual has incorporated some of the critique against earlier methods of measuring.
This being said, the traditional methods of measuring still inform many policy decisions.
The EU Lisbon Strategy has set as a goal that their average expenditure on R &
D should be 3% of GNP.
The Oslo Manual is focused on North America, Europe, and other rich economies. In
2001 for Latin America and the Caribbean countries it was created the Bogota Manual.
Many scholars claim that there is a great bias towards the "science and technology
mode" (S & T-mode or STI-mode), while the
"learning by doing, using and interacting
mode"
(DUI-mode) is widely ignored. For an example, that means you can have
the better high tech or software, but there are also crucial learning tasks important
for innovation. But these measurements and research are rarely done.
Business Tips
Some tips on how to avoid business failure:
-
Don't underestimate the capital you need to start up the business.
-
Understand and keep control of your finances - income earned is not the same as
cash in hand.
-
More volume does not automatically mean more profit - you need to get your pricing
right.
- Make sure you have good software for your business , software that provides you with a good reporting picture of all aspects of your business operations.
See More Information On:
-
ShopMateWeb Online Cloud Based Business Database Application
-
ShopMate Desktop Automotive Database Software
-
ShopMate Desktop Modules Explained - Screen Shots
-
AzureMate Desktop Cloud Data Storage Explorer Software
-
Software Downloads and Installations
-
MotoShop Automotive Database Software
-
Accountancy - Accounting Theories
- Automobile History - Automotive Fuels