Importance of Innovation and Creativity for Success of an Organisation!

Innovation is the process of creating and implementing a new idea. It is the process of taking

useful ideas and converting them into useful products; services or processes or methods of

operation. These useful ideas are the result of creativity, which is the prerequisite for

innovation. Creativity in the ability to combine ideas in a unique way or to make useful

association among ideas. Creativity provides new ideas for quality improvement in

organizations and innovation puts these ideas into action.

Change and innovation are closely related, even though they are not the same. Change often

involves new and better ideas. The new idea may be the creation of a new product or process

or it can be an idea about how to change completely the way business is carried out.

Successful organisations understand that both innovation and change are required to satisfy

their most important stake holders.

Strategic Importance of Innovation:

For both established organisations as well as new organisations, innovation and change

become important in a dynamic, changing environment. When a company fails to innovate

and change as needed, its customers, employees and the community at large can all suffer.

The ability to manage innovation and change is an essential part of a manager’s

competencies.

Types of Innovation:

Three basic types of innovation are:

(i) Technical,

(ii) Process and

(iii) Administrative.
Technical innovation involves creation of new goods and services. Many technical

innovations occur through research and development efforts intended to satisfy demanding

customers who are always seeking, new, better, faster and/or cheaper products.

Process innovation involves creating a new way of producing, selling or distributing an

existing good or service.

Administrative innovation occurs when creation of a new organisation design better supports

the creation, production and delivery of goods and services.

The various types of innovation often go hand in hand. For example, the rapid development

of business to business e-commerce represents process innovation. But this new process

requires many technical innovations in computer hardware and software. Also as firms began

to use business to business e-commerce, administrative innovation soon followed. Further,

implementation of process innovations necessitated organisational change. “Doing something

new means doing something differently”. Thus, innovation and organisational change go

hand in hand.

Technology and Innovation:

Technology is defined as the systematic application of scientific knowledge to a new product,

process or service. It is also defined as the methods, processes, systems, and skills used to

transform resources into products. Technology is embedded in every product, service, process

and procedure used or produced.

“Innovation is a change in technology”. When we find a better product, process or procedure

to do our task, we have an innovation. Process innovations are changes which affect the

methods of producing outputs. For example, manufacturing practices such as just-in-time,

mass customerisation, simultaneous or concurrent engineering – are all innovations.

In contrast, product innovations are changes in the actual outputs themselves. Technological

innovation is daunting in its complexity and pace of change. It is vital for a firm’s

competitive advantage because today’s customers often demand products that are yet to be
designed. As technologies develop, product obsolescence increases and innovative products

will have to be introduced into the markets.

Managing technology requires that managers understand how technologies emerge, develop

and affect the ways organisations compete and the way people work. Technology can greatly

affect an organisation’s competitiveness and managers have to integrate technology into their

organisation’s competitive strategy. Managers need to assess the technological needs of their

organisations and the means by which these needs can be met.

Understanding the forces driving technological development and the patterns they follow can

help a manager anticipate, monitor and manage technology more effectively.

i. First, there must be a need or demand for the technology. The need acts as a driving force

for technological innovation to occur.

ii. Second, it must be theoretically possible to meet the need using the knowledge available

from basic science.

iii. Third, it must be possible to convert the scientific knowledge into practice in both

engineering and economic terms.

iv. Fourth, the necessary resources such as finance, skilled labour, time, space and other

resources must be available to develop the technology.

v. Finally entrepreneurial initiative is needed to identify and put all the elements together.

The diffusion of technological innovations:

For successful diffusion of a new technology over a period of time it should have the

following attributes:

(i) Great advantage over its predecessor.

(ii) Compatible with existing systems, procedures, infrastructures and ways of thinking.
(iii) Has lesser complexity than its predecessor.

(iv) Can be easily tried and tested without significant cost or commitmeChange and

innovation are closely related, even though they are not the same. Change often involves new

and better ideas. The new idea may be the creation of a new product or process or it can be an

idea about how to change completely the way business is carried out. Successful

organisations understand that both innovation and change are required to satisfy their most

important stake holders.

Why is Sustainability Important for Business?
Increasingly, businesses are making strategic decisions around the type and extent of their
corporate sustainability policies. In addition to environmental and social benefits, companies
that incorporate sustainability into decision-making processes can reap significant financial
advantages and attract more interest from investors, which is a key to long-term profitability.

Yet sustainability can have a variety of meanings, depending on the business context. On this
article, you will understand how the concept is applied in terms of the environment,
employment practices and business practices.

Environmental sustainability

Environmental sustainability can be applied in many ways, such as creating alternative routes
in a production process to reduce waste generation and increase water and energy
efficiencies. Investment in renewable energy is also growing momentum among big
organisations, with many building their own solar or wind farms, in order to phase out the
consumption of fossil fuels and reduce their carbon emissions.

Climate change, one of the biggest challenges of our time, continues to influence the way
companies are doing businesses. Research undertaken by CDP shows that last year, 215 of
the world’s largest companies reported that they saw nearly $1 trillion at risk from climate
impacts, but also $2 trillion in opportunities. Thus, climate leadership is a key to ensure the
profitability of organisations over the next decades.
Attaining the carbon neutral certification under the Climate Active Program – a program
from the Australian Government that certifies companies, products, events or buildings that
are able to neutralise their GHG emissions – is a great incentive for organisations to show
climate leadership. The certification contributes to improve the image of companies, as
consumers have been asking for urgent climate action.
Sustainability and employment

Businesses with strategies that are sustainable in the long run pay their workers’ salaries and
benefits that allow them to live a sustainable life within their community. This builds loyalty
within the organisation, benefiting the company through increased productivity and
creativity, as well as lower levels of fraud and mismanagement.

Besides, when organisations look to improve the health and well being of communities, they
are able to motivate employees who are genuinely interested in contributing to the success of
the business.

Sustainability in business practices

Pushed by growing demands from consumers for products and services that cause minimal
effects to the ecosystems, corporations have shown interest in bringing sustainability aspects
to the core of the business. Another driving force behind this is the pressure from investors,
who are already considering the level of corporate social responsibility, in other words, the
role of businesses to address the needs of society, as a decisive factor on their choice of
organisations to allocate capital.

Sustainable investing – the process of incorporating environmental, social and governance

(ESG) factors into investment decisions – is becoming a common practice. Corporations are
going beyond the desire of profitability, which is shown by their growing efforts to build
internal environmental policies and also take part in global tendencies, like the alignment
with the Sustainable Development Goals (SDGs) – topics suggested by the United Nations to
guide organisations on the development of policies towards sustainability.
Therefore, the incorporation of sustainability principles into business practices is becoming
mainstream. Companies who don’t follow this tendency are likely to lose credibility from
investors, as well as opportunities to generate revenues and the chance of being an example to
society.