Innovation

Introduction

Innovation is a natural tendency of the human mind to thrive on variety, regardless of the activityinvolved. All the man-made changes that the world has witnessed are a result of this tendency tolook for something different. The urge to try something else is a prominent human characteristic.When properly directed, this urge can have results that enhance the quality of an activity. A positive outcome of this urge to be different is called innovation. There is no end to the newideas in the world, but when these ideas create value, it becomes innovation. Often enough, it isthe application of existing knowledge in a different manner that stands out as an innovative idea.Usually, one idea gives birth to the next and new technologies, processes and methods come into being.Good ideas are of no use unless they are implemented, and implementation in a new way alwaysattracts criticism. It is only by being optimistic in the face of odds that an individual stands achance of achieving something unique. At times, innovation is done by taking an existing idea,concept or product and improving upon it. However what is more remarkable is to be able tothink beyond what already exists, and coming up with a brand new concept. Mankind has comethis far by riding on the benefits of innovative ideas through the ages. It is the problems that people encounter that cause a solution to be sought. Great scientific inventions that we now takefor granted are products of the innovative ideas of great minds. Innovation is a key element in providing growth and for increasing results. Innovation means a new way of doing something; itmay refer to incremental, radical and revolutionary changes. A company that overlooks new and better ways of doing things will eventually lose customers to another competitor that has found a

better way. Innovation by businesses is achieved in many ways. One way leading to innovation isthe use of creativity techniques. These are methods that encourage original thoughts anddivergent thinking e.g. brainstorming morphological analysis. New ideas that have beengenerated by the use of creativity techniques have to be structured and evaluated. In order tocomplete the innovation process the valuable ideas have to be put into practice.According to Peter F. Drucker, “

The best way to predict the future is to create it”

. We are facingchanges that cannot be addressed with traditional methods, because change itself has changed.Solutions that worked in the past now simply cause more problems. A whole new perspective isneeded to approach breakthrough change with success.

Innovation as a Core Business Concept

A business concept or model is a framework for identifying how one’s business creates, delivers,and extracts value. In today's world of discontinuous change, there is no continuity withoutconstant renewal. A survey found that more than 90% of large organizations are committed toinnovation. Yet when managers of these companies were asked to describe their corporateinnovation system, almost none of them could do it. One explanation for this mismatch is thattop management is just paying lip service to innovation and has no intention of really workinghard on it. Another and far more likely explanation is that senior leaders do not have a clear,well-developed model of what innovation looks like as an organizational capability. Since theydon't know what it looks like, they don't know how to describe or build it. Innovation applies toall business activities, not just end products. Innovation can be in logistics such as in the case of Wal-Mart, merchandising like Starbucks, and selling like Dell. Pioneers rethink the entire business concepts & build new business models from ground up. Today greatest amount of

wealth goes to those who create new business models, create new sources of revenue based onchanging technology, changing demographics and changing global demand.According to Gary Hamel,

“True innovation is based on the recognition that a business concept represents a dozen or so design variables, all of which need to be constantly revisited and constantly challenged”

. Managers have to think creatively & holistically about their entire business concept.Strategic innovation differs from product innovation. Companies today can succeed throughinnovative strategies alone. Southwest Airlines, Dell, IBM, EBay etc. succeeded throughinnovative strategies.Innovations need not be risky, but something that changes customer expectations &competitiveness for the better. Only Innovation creates new wealth. Stock Markets reward onlythose with successful innovation.

Innovation as a Change of Strategy

The change of strategy in a company can bring fruitful benefits to it. Dell can be used as anexample here. Dell was known as just a company who manufactured and sold hardware. During2007, when Dell lost it first position to HP for the first time in a decade, Michael S.Dell had tostep back in as a CEO of the company by replacing Kevin Rollins. He took drastic measuresinside and outside the company to increase profitability. He masterminded the change in entire product range. He started changing the company's image from hardware manufacturer to acompany which sells the entire IT solution. Organizations were struggling with IT complexity.Dell forged a path to simplify IT, by building a low-touch uniform infrastructure spanning thedesktop to the data center. By doing this customer got operational efficiency, manageability and