DK - Innovation

Dorling Kindersley Limited

The Penguin Group

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First Published in paperback in 2008 by Dorling Kindersley Limited. ISBN: 9780756655556
Copyright 2008 Dorling Kindersley
Text Copyright 2008 John Bessant

This Digital Edition published 2010. ISBN: 9780756666088
Digital conversion by DK Digital Content, London and DK Digital Media, Delhi.
No part of this publication may be reproduced, stored in a retrieval system,
or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the copyright owner.

In todays dynamic and turbulent world, organizations face a stark challengechange or perish. Unless they keep renewing their products and services, and update the ways they create and deliver them, they risk being overtaken by competitors. Innovationthe process of changeis critical to the success of all organizations, large or small, in both the private and public sectors.

Most managers understand the importance of the topic. But making it happen requires a systematic, hands-on approach. We have to learn to manage innovation, and Innovation provides a framework for doing this. Key elements in successful leadership of innovation include developing a clear strategic vision and communicating it, searching for innovation triggers, choosing a balanced portfolio of projects, and delivering these projects on time and within budget.

Innovation is about human creativity, organized and applied across the organization. As a manager, you need to understand how the innovation process works and how you can mobilize this creativity. By using the guidelines and tools in this guide, you will develop the skills you need to become an architect of change within your organization.

Innovation is vital to the success of any business. But before you can apply it to your own organization, you need to understand what it is, why it is important, and how it applies to different business areas.

Tackling the Basics

The word innovation today appears everywhereon company websites, in advertisements for everything from hairspray to healthcare, on the lips of politicians, and in news features. However, while the word itself is popular, the concept of innovation remains poorly defined.

Defining innovation

The word innovation comes from the Latin words in and novare, meaning to make something new, to change. In principle, thats something anyone can doimagination and creativity come as standard equipment for human beings. And its something weve been doing since the earliest days when our ancestors lived in cavesthe reason that we dont still live there is because of innovation. Working out better ways of hunting, mastering fire and tool-making, learning about agriculture, construction, transportationquite simply, the history of civilization is about innovation.

Making innovation practical

Theres still plenty of room for ideas to improve the world we live inand we are still really good at coming up with them. But innovation isnt just about bright ideas; its also about putting those ideas into practice. No matter how good the idea, it will not benefit your organization if it cannot be transformed into a practical change in the work process that increases efficiency or profit. A working definition of innovation would be: innovation = ideas + implementation.

Understanding the issues

Thinking about managing innovation raises three key issues. First, why should we innovate? Innovation always involves risks, and the rewards are not always obvious. Second, what can we change? You need to understand the options for innovation before you can make decisions on where to focus your efforts. And finally, how can we make it happen?

The innovation process

Look at all areas

Human history shows that any area of life can benefit from innovation. Think about ways of improving even the most well-established systems in your organization.

Keep an open mind

Consider all ideas, no matter how strange, in their initial stages. Something that appears totally impractical at first may lead to useful thinking about other, more workable solutions.

Understanding the Benefits

In Charles Darwins famous theory of evolution, survival depends on an ability to change. Those species that do not adapt and change to cope with an altering environment simply die out. The same can be said to be true of business organizations as well.

Innovating to survive

If you do not change what you create and offer the world (your products and services), you run the risk of being pushed aside by organizations that do. And if you want your businesses to grow, you are unlikely to achieve this if you do not offer new products and services in new ways. This survival idea may be obvious in a competitive business worldbut it is just as important in nonprofit organizations and public services.

Innovating to make a profit

Innovation is essential to survival, and also to development and profit. There are many ways in which innovation can improve an organizations revenue and customer base, and defend against competitors. These range from making existing processes more efficient, to producing something before competitors can imitate it, to completely rewriting the rules of competition in your market.

Profiting from innovation

Novelty in process

A faster, cheaper, or more efficient production process gives you an instant advantage.

Right timing

Getting into a market early establishes your brand before the competition has time to develop.

Added complexity

Offering something too complex for others to imitate places your product at a premium.

New competitive factors

Changing the base of your competition (eg, from price to quality) can undermine your rivals.

Protecting intellectual property

New trademarks and patents generate revenue through fees for their use.

Product or service novelty

Offering a product no one else has access to guarantees you will have no competition.

Rewriting the rules

Offering people something absolutely novel can create an entirely new market.

Setting a Pace for Innovation

In order to manage the process of making innovations happen, it is important to understand the different ways in which change can be categorized. In this field it is not a case of one size fits allyou need to tailor your approach. One way is to look at how much newness is involvedfrom incremental small steps to radical leaps forward.