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Innovation is...


Converting new ideas (from creativity) into new products and processes which satisfy customers better than competitors.


This may involve invention (making a completely new product).


New product development is vital, but it is also important to find new ways of improving processes like production and customer delivery.



How to be innovative



1. Vision, challenging aims and leadership

Successful innovators often have a vision, a future ideal based on making something new and worthwhile for customers to enjoy (e.g. Walt Disney ,pictured right, wanted to “bring happiness to millions”).

Every manager (including the chief executive) should encourage innovation and new ideas.



2. Creative corporate culture

Innovation and creativity should be:

  • valued by all employees.
  • always applied in their work.

New ideas should be valued, encouraged and rewarded.

A no blame culture is vital, in which everyone accepts that innovation involves failure and making mistakes.



3. Customer satisfaction


a) market research 

Find out customers’ needs and how they are likely to change in the future (see market research).


b) innovate, not imitate

Be uniquely superior to competitors through marketing and branding, quality, great design and continuous improvement .


c) create new markets with revolutionary products 

(e.g. iPod and Google).



4. Long-term thinking and risk

You need a long-term research and development (R&D) strategy, but innovation is very risky – many new products fail.



5. Empowerment, teamwork and purposeful freedom


Innovation results from:


a) control and freedom 

The freedom to create directed towards customer satisfaction (what Japanese companies like Honda have called harmony within discord).


b) small multi-functional teams 

(groups of 5 or 6 from different managerial functions like production, marketing and R&D).


c) asking people for ideas 

  • put the best ideas into action.
  • explain why the others wouldn’t work.



6. Brainstorming

This is getting people in small groups to suggest lots of new ideas to satisfy customers better – see creativity.




7. Reflect and relax

People must have the freedom and time to think and reflect about possible solutions to customers’ problems without any fear of criticism.

Leisure is a great time for new ideas, so employees shouldn’t:

  • work unnecessarily long hours.
  • waste time with unnecessary paperwork and meetings.

They should think about a problem, relax and then go back to it.



8. QueInnovationstion everything

Creative people continually challenge the way things are done and what others think (conventional wisdom).

They constructively argue with other people (constructive conflict) and are passionate about new knowledge and continuous improvement

For example, a worker at the British match maker, Swan Vesta, saved it millions by suggesting only putting sandpaper on one side of the matchbox.



9. Constant innovation

Constant innovation is essential because of shorter product lifetimes caused by:

  • increasing competition.
  • better customer information (e.g. on the Internet).
  • improving technology.

Many innovative companies like Sony have parallel development – developing new products but also their replacements as well.




10. Recruit creative people

Creative people (like Albert Einstein, pictured right) should be:

  • Naturally curious – seeking new experiences and new solutions to problems.
  • Highly self-motivated.
  • Passionate about their work.



11. Learn and get outside help



a) open innovaton

This term was coined by the American, Henry Chesbrough (pictured right), to describe help given by outside innovators (e.g. universities), particularly via the Internet

This has been used successfully by companies like IBM, Proctor and Gamble and Lego.


b) be imaginative 

Find new uses for things.


c) connect relevant issues together to solve a problem (holistic thinking) 

(e.g. health care is about preventing illness as well as curing it).



d) learn from other people’s experiences and ideas

Jean Nidetch (pictured right) made Weight Watchers successful by using the idea of group support from Alcoholics Anonymous.


e) use intuition and common sense.


f) experiment 

Be adventurous and take risks.




12. Perspiration and perseverance

Innovation is a long process with lots of failures and criticism.

Thomas Edison (pictured right) tried 3,000 different materials for his light bulb and only two worked – so persevere!



Key quotes explained



“Harmony in discord”

- Horace ,Roman poet (pictured right)

Innovation needs continual questioning and debate (discord), but these must be directed towards customer satisfaction (harmony).




“Every act of creation is first of all an act of destruction”

- Pablo Picasso ,Spanish artist).(pictured right)

Creativity destroys old and useless ideas and replacing it with new and better ones.

This is what the American economist, Joseph Schumpeter, called “creative destruction”.




“Who the hell wants to hear actors talk?”

- Harry Warner (founder of the Warner Brothers film studio.(pictured right)

Innovation makes old ideas obsolete, so the American campaigner for the blind, Helen Keller, said: “The heresy of one age becomes the orthodoxy of the next”.




“There is one thing stronger than all the armies in the world; and that is an idea whose time has come”

- Isaac Newton (English scientist).(pictured right)

Timing is vital to the success of any innovation.



Best books


Tom Burns and G.M. Stalker , The Management of Innovation (1961)

Innovation needs informality, loosely defined roles, reward for performance and open communication in teams (an “organic” or “organismic” structure).

A “mechanistic” structure (hierarchical with strictly defined roles and power from position) is best suited to stable conditions.




Rosabeth Moss Kanter (pictured right), The Change Masters (1984)

Innovative companies:

  • see problems as a whole and relate all the relevant issues to solving it (“integrative problem solving”).
  • have multi-functional teams with the responsibility to make their own decisions.
  • give people in these teams the “power tools” of innovation – money (and other resources), information and support for new ideas.

(For more detail seeThe Change Masters   in the Business Books section).




Richard Pascale (pictured right), Managing on the Edge (1991)

Innovation comes from questioning everything and “constructive contention” (i.e. challenging other people’s views and constructive argument.

Success is dangerous because it creates complacency or, as Pascale puts it: “Nothing fails like success”.

(For more detail see Managing on the Edge  in the Business Books section).




Clayton Christensen (pictured right) , The Innovator’s Dilemma (1997)

Successful companies don’t innovate because they have so much money invested in existing products.

(For more detail see  The Innovator’s Dilemma  in the Business Books section).




C.K. Prahalad (pictured right) and M.S. Krishnan (pictured right below), The New Age of Innovation (2002)


Innovation“Co-creation” is vital i.e. innovation in partnership with customers (e.g. Facebook and Wikipedia).





Peter Drucker (pictured right) , Innovation and Entrepreneurship (1985)

Innovation comes from exploiting these opportunities:

  • an organization’s (and its competitors’) unexpected successes and failures.
  • changes in its processes (e.g. production), industry and market structures (see industry analysis) and customer perceptions.
  • population changes affecting customer needs.
  • new knowledge (scientific and non-scientific)


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