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‘For most
people, most corporations and to most management, innovation is
an extremely uncomfortable and extremely difficult process. The
reason is that, fundamentally, innovation is by definition both
disruptive and revolutionary.’ (John Dembitz, director of
Charter house Japhet)
Of all the
desirable characteristics of management, innovation is probably
the hardest to achieve. People and organizations alike are
resistant to change. But like starting a car by pushing it,
after a while (with luck) the engine starts and the car moves
off. You have to leap aboard and start controlling it, or it
will race away and cause havoc. Companies with the winning
streak appear to have set the wheels turning and have jumped
into the driving seat before they move too fast.
Before you
can make innovation work for your company you have first to
establish how hard it will be to get vehicle moving.
Innovation
rarely, if ever, just happens. It requires imagination,
coordination and a sense of purpose. So it’s not that
surprising that many companies find it hard to innovate.
Therefore, before prior to looking at how to create an
environment where innovation will flourish, we should first
demolish several common and highly pervasive myths.
The first is
that innovation is the province of specific departments, notably
research and development. Experience across a wide range of
companies shows that, in reality, even technological innovations
depend for their success upon innovation in other functions such
as marketing and production. Innovation is a process that
properly involves everyone in the company, from shopfloor to
boardroom.
The second
myth is that the essence of innovation is having ideas. Not
true. It is quite probable that everybody in your firm has at
least one valid idea the company could conceivably make us of.
The problems lie in drawing them out of people in a manner in
which they can be properly evaluated, in making sure the
inevitable filtering mechanism within the organization does not
reject the really viable ones, and in bringing them to
fruition. More precisely, innovation is about putting the right
idea into practice at the right time and selling it in the right
way. The idea is merely the starting point, and there are a
great many hurdles to jump before it becomes a successful
innovation. The paradox is that, in spite of the abundance of
ideas inside and outside the company, top management in most
companies actually receives far too few viable ideas for
innovation.
The third
myth is that continuous innovation is the province primarily of
the high-tech industries. In reality, the mature industries of
ten show the greatest opportunity for innovation. Wherever
established ways of doing things have become heavily ingrained,
the regular march of progress is almost certain to throw up
better ways.
The fourth
common myth is that most companies need to innovate only in
order to get out of trouble. The company that waits that long
is in deeper trouble than it imagines. As the hospital example
above demonstrates, innovative choices facing tomorrow’s company
are to seek competitive edge through effective use of
innovation, or to risk being outflanked by a faster-moving, more
innovative competitor. Could your company afford to be shut our
of a large part of its market?
The fifth and
last myth is that innovation is cheap. It is almost always more
expensive than initially estimated. Moreover, most innovations
take a while to pay off, and during that time they are likely to
be a drain on profits or cashflow or both. It is therefore of
little value to pay lip service to innovation without providing
the resources to fund it not just in the ideas and investigation
stages, but beyond into implementation and the long haul to
market viability. That seems obvious, you may say. Yet, along
with inadequate market research, insufficient funding is the
most common reason for the failure of product innovations.
What can
be done
If innovation
is to become part of the fabric of a company’s culture, it has
to be taken seriously by everyone. A;; employees have to be
aware that top management is committed to innovation as a means
of progress and competitive advantage.
You will
therefore need to establish a clear policy and objectives for
innovation. It’s no use just telling people to innovate
blindly. To be really useful, innovation has to operate within
defined objectives. Top management needs to spell out to
employees where the company is now; where it wants to be in
terms of size, type of product and kind of organization; and the
kind of innovations it requires to take it there.
The employees
(and also the suppliers, if you have the confidence to involve
them in this way) also need to know that their contribution is
genuinely wanted. The limitation on corporate funds obviously
limits the number of ideas the company can pursue. But
involvement in innovation is a many-staged affair. At every
stage of implementation, new, usually minor but sometimes quite
significant innovations need to be made. Without all these
smaller innovations by ordinary people, the big ideas either
will not work or will not work half as well.
You need to
keep plugging away at the innovation theme. Keep reminding
people that innovation is important, and they will keep
responding to the challenge. But if you slacken the message
off, they will assume you have lost interest. So echo it
whenever possible in company literature.
The
innovation policy sets out the main ground rules for managing
innovation. Among other things, it should spell out where the
company wants to be in the innovation stakes. Does it want to
be the leader, with all the benefits that entails in terms of
high market profile? Or does it want to be a less exposed
follower?
The problem
with being an innovation leader is that it is expensive. Not
only do you have all the development costs, but you also have to
overcome the acceptance barriers within the market – again,
often a costly exercise. “Innovating second” allows you to
watch your competitors remove the bugs and make the market aware
of the product or service, before you launch into the same
market having learnt from his mistakes.
“Innovating
last” is a recipe for failure, because the key players in the
market will normally by then have an unassailable position.
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