Importance of Innovation to organizations in today’s environment

The number and types of businesses are growing exponentially each day, there is increasing
competition among similar industries to such an extent that continuously providing something
different and better than your competitors is no longer only a growth strategy but has become a
necessity for survival in the industry, and this situation raises the demand of innovations. Innovation
is a way to make substantial improvements in a current system to make it more proficient and
productive by introducing new ideas and features that are useful and practical. For an organization it
could mean introducing changes to its existing internal processes of manufacturing or services, or
finding new products or modes of business altogether, the scale of these changes could be small or
big, but its main objective remains the same, to increase the performance and productivity of the
organization. Therefore, organizations need to invest in innovation to improve and grow. (Watson,
Richard T, Information Systems, Chapter 1, Being a systems innovator, 2007)

Innovation, A coping mechanism.

Every Organization experience a rough growth period or a strategic problem once at a time during
the span of the business. Therefore, sometimes innovations become a way to cope with an ordeal,
finding a solution for an unexpected problem arising or an urgent need to find alternative ways outs
from a stuck situation. It also helps employees who emerge successful from such experiences, to
increase their cognitive abilities and problem-solving skills. Moreover, dealing with such situations
they could end up with radically new ideas or ways of doing things. Teams of such employees
become an asset for an organization to cope with future challenges. But at the same time, the idea
introduced should be relevant for the current times and also take into consideration future
outcomes or predictions. . (Watson, Richard T, Information Systems, Chapter 1, Being a systems
innovator, 2007)
For Example, During the financial crisis of 2008. When Netflix recognized that entertainment
spending was decreasing fast, the company introduced video streaming, a move that resulted in
a 57% increase in stock prices by the end of 2009.

(https://www.forbes.com/sites/forbesbusinesscouncil/2020/09/10/crisis-inspired-innovation-
finding-opportunities-in-times-of-uncertainty/?sh=1b02393a3b5c Gray Ryan, Crisis-Inspired
Innovation: Finding Opportunities In Times Of Uncertainty, Forbes, September 10, 2020)

As clear from this example, the solution Netflix came up with not only took them out of the current
crises but also aligned with their future prospects as most of the organization’s investments
nowadays are into online streaming and they are one of the most successful online streaming
services providers. Therefore, solutions are always there no matter what may the problem be, all it
requires is one out-of-the-box idea to steer the organization out of trouble, and often such solutions
become epitomes for other companies in the industry as many companies started online video
streaming services inspired from the success of Netflix.

Innovation brings knowledge

While going through an innovation companies go through search and storage of a lot of data and
information for research and analysis which ultimately increases their current databases of
information. Therefore, innovation brings a fresh perspective and useful information to
organizations expanding their existing knowledge base which is eventually used by the organization
to adopt and stay relevant in a modern environment and in the future too. Moreover, This freshly
increased knowledge base helps organizations to find and recognize methods and strategies that
remained unanticipated for them earlier, and these strategies further help organizations to grow in
their industry financially and mark new achievements. (Watson, Richard T, Information Systems,
Chapter 1, Being a systems innovator, 2007)

For Instance, in 2018, a coal mining company Freeport wanted to increase mining capacity at one of
its mines in Bagdad, Arizona. Reduced coal prices hindered the expansion program, so the company
had to wring out more coal from that mine without expansion. As part of innovation, they used an AI
system, that used their existing knowledge base built through decades of mining experiences, to
enhance plant operation processes. The engineers and metallurgists worked hand in hand with the
data scientists. After analysing the mining processes, it came up with possible ways to optimize the
current processes and adaptation of these ways helped in 10% increased production from the mines.

(https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/how-six-companies-are-
using-technology-and-data-to-transform-themselves Smaje Kate, How six companies are using
technology and data to transform themselves, Data driven decisions, McKinsey Digital, August 12,
2020)

Therefore, a knowledge base collected along the growth of the companies through various ups and
downs becomes a treasure and resource base for tackling future problems by providing a foundation
for the latest technologies to be used for problem-solving.

Innovation increase effectiveness

For the growth of an organization, it is essential to increase the productivity and effectiveness of all
the systems within that organization. It is crucial to invent ways to reduce cost and time spent on
repetitive tasks or processes which do not directly impact the growth of the business. These tasks or
processes consume more resources than their effective output. (Watson, Richard T, Information
Systems, Chapter 1, Being a systems innovator, 2007)
For example, I have worked for Public Works Department in India, working on road construction
projects. Usually, on bigger projects, for quality control, on-site laboratories are established on
multiple stretches of the road, but our department also executes a lot of smaller projects in or
around urban areas, and for maintaining quality control on these products, test samples were to be
collected by quality testing engineers of Central Research Laboratory for testing in the laboratory. In
this system, a lot of crucial time and resources were wasted as many site engineers had to wait for
the schedule of sample collection visits and test results afterward, and therefore it used to take
them a lot of time to make decisions for further planning. But three years ago, Central Research
Laboratory of our Department launched Mobile Testing Vans equipped with apparatus along with
quality testing engineers required to conduct most of the on-site field tests and give results on the
spot. This idea of sending mobile laboratories to sites on smaller projects saved a lot of resources
and more importantly saved crucial time in getting test reports, helping site engineers to make
needful decisions quickly. Thus, increasing the efficiency of the department.
Moreover, a lot of manufacturing organizations are introducing robots into assembly lines in
manufacturing plants or storage facilities to fasten the processes and at the same time free a lot of
people from these monotonous and risky jobs to be positioned in more impactful positions where
they can resolve problems and bring new ideas that directly impact the business, like designing new
processes or inventing more attractive marketing strategies.

The Lear Corporation uses flexible, lightweight UR5 cobots to assist with assembling car seats. The
UR5 has a small footprint (Ø 149 mm), enabling it to work in tight spaces, where it can perform tasks
such as helping to assemble automotive seats and rest frames. At Lear, the UR5 completes a screw-
driving action 8,500 times per day, which has optimized the company’s production time.
(https://www.universal-robots.com/blog/6-examples-of-industrial-robots-in-the-automotive-
industry/ Universal Robots, 6 EXAMPLES OF INDUSTRIAL ROBOTS IN THE AUTOMOTIVE INDUSTRY, 4
November, 2020)

Implementation of the latest technologies and using the latest methods of production help reduce
production costs and increase productivity and efficiency in the organization which ultimately earns
more trust in the company from its customers.

Innovation Keeps Organizations Relevant

Development in technologies is changing markets around the world so rapidly that it has become
difficult for many businesses to keep up with the change, so to succeed in this environment
innovating, adapting, and accepting these changes has become the only way to achieve relevancy
and be profitable. According to Deloitte, only 12% of the Fortune 500 companies from 1955 are still
in business and half of the S&P 500 companies will be replaced in the next ten years
(https://www.viima.com/blog/importance-of-innovation Kylliainen Julia, The Importance of
Innovation – What Does it Mean for Businesses and our Society?, VIIMA, April 26, 2019)

Earlier businesses that had newly entered the market had to come up with new and unique methods
or products to establish themselves and penetrate the industry but these everchanging technologies
and customer bases have forced even successful business enterprises to always innovate and
venture into new ideas to remain ahead of their competition and sustain a relevant position in the
market.

Innovation Helps Organizations Differentiate Themselves

For an organization surrounded by extreme cut-throat competition in the industry, so much so that
it starts to affect its profits and growth, in such scenarios, Innovation in the form of trying new ideas
and strategies or simply trying something that their competitors have not thought about yet, will
give it a chance to differentiate itself from its competition and attract a new customer base, thus
putting it back on track with profit and growth.

Whole Foods is a firm in retail grocery which had successfully differentiated itself from its
competitors by introducing innovative and strategically planned marketing techniques. It used
traditional marketing methods along with the latest creative methods like storytelling, and the
digital experience of inbound marketing based on their understanding of customer demands. It
shows shoppers to look for a healthy, diverse, and wholesome selection of food items when they go
grocery shopping. Moreover, It focuses on local stores, taking away that feeling of the big chain and
introducing a bright, unique, and cheerful store design that's as easy to navigate as its website. It
also hosts events, runs multiple blogs, and has an app showing the future of grocery shopping.
(https://blog.hubspot.com/insiders/branding-differentiation Shepard Bethany, 10 Companies That
Brilliantly Differentiated Themselves From the Competition, HubSpot, January 9, 2019). By using
these creative ideas of sales and promotions they were able to produce a unique image of their
brand in their customer's minds when it comes to grocery shopping thus successfully leading ahead
of their competitors.

The Trendhunter innovation assessment report put me in the category of daring moderator which
according to the report is the type of personality that is complacent in nature which makes me a
person with whom everyone is comfortable to work with and react immediately to sudden
challenges with innovative ideas with a clear mind. I remain consistent in work performance hitting
deadlines on time but on the downside, I work under strict guidelines following all rules which leaves
less space for experimentation and ambitious innovation, therefore, most of my innovative ideas are
based on my knowledge and past experiences. Based on my work experience so far, I found this
assessment to be quite near my actual personality at work. The reason I think of these personality
traits instilled in me is due to the rigid and reactive nature of the organization, for which I worked.
Because it was a government organization, it was tightly bound by strict rules and regulations, thus
leaving very tight room for employees to experiment with their work.

For instance, in 2015 I was working on a project of widening of a road Bhadson to Sirhind via
Tarkheri in Punjab. At halfway length, this road passes through the village Tarkheri with a U-shape
bend in the road, due to the close proximity of houses in this village this small road section was
narrower than the remaining length therefore was risky for villagers to enter and leave the road.
Surveying this problem, I immediately came up with the idea of making a Bypass around the village
so the traffic will bypass the village without entering it. But as the proposal moved forward the
administration rejected this idea as it involved land acquisition costs for the new bypass and
additional costs for its construction, they did not want to go above the planned budget for this
project. So for me, another alternative to suggest, from my experience was putting extra
precautionary road signage on this particular section of the road. This idea was accepted as it was
within budget, but it was a demoralizing experience because it was not as effective an idea as the
earlier one, but due to strict regulations, my organization avoided it.

To conclude, all these above-mentioned benefits are just a few of many examples of how
innovations can help businesses come out of a crisis and learn from their mistakes, so that, they can
adapt and improvise fresh ideas and methods in their business process to get back on the track of
prosperity and growth. Moreover, the latest technologies like machine learning and robotics have
changed the way businesses are done, and only companies who introduce more innovative ideas
and introduce these technologies into their business systems and methods will sustain themselves in
the future. Organizations which do not allow experimentation and research will not only start to lose
business but employees as well, as workers in such a firm will feel their jobs are mundane and
demotivational. To put simply, innovation is the need of the hour on which the sustainability of
organizations relies.