Innovation, wherein something new and of high value is created, involves an entire process cycle from identification of opportunity, ideation and invention to prototyping & successfully implementing the idea. It thus creates new opportunities and growth avenues for an organisation.
Today, with new technology, changing customer preferences, growing markets, new geographies, and an open market with multiple brands/products, garnering a substantial market share is becoming tough. Pricing alone is no longer the differentiator. Organisations realise that they are addressing an aware customer, and also, that they are one among many who are doing so. Innovation and product differentiation therefore, becomes inevitable, if an organisation has to survive.
Approaches to innovation
Some of the effective approaches towards successful innovations are as follows:
Innovation is not perfection: There is no such thing as a perfect product. Companies may run prototype tests and customer studies, but the success of a product cannot be guaranteed until it is eventually launched in the market. The aim is to develop & launch a product/service and continue working towards improvement of its features. Google, for instance, works on the principle of ‘launch early and often’. While this gives them the market advantage of being the early innovator, they also understand the pulse of the market quickly and continue working on refining and improving the product. The quest for perfection in innovation, though idealistic, may not always have positive results. While this could take years for an organisation, the competitor could capture the market first with a similar product, albeit in a best-testing mode. Time is, therefore, very critical in the innovation process.
Innovation is universal: Creativity has no boundaries and no constraints of education, experience or hierarchy. The same applies to innovation as well. It is the freedom of thought that leads to constructive action. And this is not guided by levels, roles or academic accomplishments. Many organisations set up special teams to work on innovative ideas, processes and technologies. Moreover, innovation cannot be restricted to a select few. It is not necessary that only a designated set of people or teams can produce the desired results. Also, the belief that only senior or experienced members in organisations can innovate is also a myth. The concept of thought leaders definitely supports an organisation in developing a vision, providing a focus to work, but the thread of being innovative and encouraging employees to get into a constructive and creative thinking mode has to run across the length and breadth of the company.
Innovation should be a free for all processes: Ideas can, and have come, from the most unexpected people and the most unexpected situations. For instance, a store operator at Kinko's, a document processing store chain, noticed that the demand for copying reduced drastically during Christmas time. Customers, he realised, were so busy with buying Christmas gifts that the photocopying work in the office took a backseat. Needless to say, December revenues were low. He came up with a creative idea - to provide customers with the unique option of using the colour copying and binding facilities to create their own customised calendars. Personal photos were also allowed to create these special calendars. He experimented with this idea in his store and it turned out to be popular. Not only did customers come to create and buy these calendars, they also brought along documents to be photocopied. The operator then called the CEO of Kinko's and explained the idea. This idea was then provided as a service in all the outlets. The idea was not only a big hit across all stores, but also translated into big revenues for the company.
Innovation is not necessarily improving or refining what exists: A discussion on innovation in any organisation normally starts with developing new products, adding new features to existing services, and the like. What can we add to the existing product to make it more appealing to customers? This no doubt leads to extra cost, but is also likely to result in feature overload and information fatigue. Instead, innovation can be a two-way street. It need not always accentuate what exists. Innovation can also result from trimming the frills; in other words, firms can look at 'innovation by subtraction'. Some features of the existing product or service can be taken away, making it more customer friendly and cost-effective. The introduction of ATM machines revolutionised the concept of cash withdrawals in banks. This concept has replaced the conventional systems in banks, with tremendous cost savings for both the bank and the account holder.
Innovation is dynamic: History is witness to the failure of a number of ambitious ventures that could not hold on their own due to a lack of continuous innovation. Success and innovation are never constant. A path breaking innovation today will become an obsolete technology tomorrow. Therefore, organisations should realise that innovation is not a one-time process and that they have to invest time' and effort not only in recognising new ideas and evaluating feasibility, but also in making innovation management a part of the everyday working system. When Polaroid developed the instant photography camera, it created ripples in the market and was a runaway success. Soon there were competitors developing similar products. Polaroid tried to sustain its success on its obsolete technology. While competitors were working and launching the new age digital technology cameras, Polaroid stayed focussed on instant photography. In early 2008, Polaroid closed down three factories and laid off 450 people.
Recognising failures: Soichiro Honda, the founder of the Honda motor company once said, “Many people dream of success. But success can only be achieved from repeated failures and introspection. Success represents 1 per cent of your work that results from the 99 per cent that is called failure.”
Failure is inevitable when attempting something new and untried. The education system, especially during formative years, instills failure as a negative trait. This fear manifests itself in adults, especially in their workplace, and prevents them from taking the road less travelled. Therefore, for an organisation looking to develop an innovative work environment, the key to success lies in how these failures are viewed, managed and interpreted.
The first step is communication. It is important for the management, and therefore the thought leaders, to communicate that when employees are given the liberty to be innovative and succeed, they are also given the freedom to fail. It is also imperative to distinguish between ‘honourable’ and ‘incompetent’ failures. An honest attempt that did not yield results will be an honourable failure, while failure due to lack of basic competency or skills is incompetent failure. Employees should know that the organisation will never penalise or criticise honourable failures. People should be encouraged to talk about the failures in the same light as they would talk about their success. Honourable failures should be used as learning experiences. They should be shared across an organisation as case studies or illustrations.
When the Jacuzzi brothers came up with the innovative idea of the whirlpool bath for arthritis patients, the concept became an instant success. But it was an absolute sales debacle. The product was exorbitantly priced and out of reach of the common man. It was a complete sales failure. The brothers reworked this novel idea from a different perspective and relaunched the same product. But this time, the target segment was the affluent segment of society and the whirlpool bath was positioned as a luxury item. The rest, as they say, is history.
Revisiting the hiring process: An integral part of any work culture is people. Work culture is formed by the people, for the people. The management only plays the role of a facilitator. Therefore, an organisation encouraging an innovative work environment should pay special attention to the hiring process. What kind of people are being hired? Do these people have the skills to take the organisation forward? How are our employees different from that of competitors?
When hiring, the interviewer has to understand the difference between a questioning mind that is seeking answers and a bad attitude. While bad attitude will cloud the climate of innovation, questioning will accelerate the process. Moreover, if a manager hires people he understands, it is likely that the company will never get people better than him/her. Tom Watson Jr, the legendary President of IBM, for instance, was famous for hiring ‘wild ducks’ - people with unconventional ideas and risk-taking ability. There is always a tendency to hire or create clones. Sometimes managers find that the outstanding contributors are among those employees whom they do not like very much.
Developing lateral leaders: The success of an innovation process lies in the hands of the ‘leadership’ team. While the ,management can create an environment conducive to innovation, the managers have to lead from the front. It is, therefore, necessary to train and develop leadership that is not just tactical, but lateral as well. As opposed to just following the ‘Action - Result – Improvement’ model, it would help if managers could also include thinking and creativity. There is no doubt that bottom line is the top priority of every manager, and every business needs budget as a barometer to measure success. But budget is not the only strategy to success. Nokia would not have moved from being a wood pulp mill to the world’s leading cellular phone manufacturer by merely budgeting. Similarly, Wipro could not have become one of India's leading and recognised IT outsourcing companies from its humble beginnings as a vegetable oil manufacturing company with managers who only believed in balancing budgets.
Leadership means taking the business from where it is today to someplace new and different. This cannot be achieved, if leaders just worked by the rule book.
Surpassing competition
Innovation is the only way to stay on top and ahead of competition. Top managements understand this today. However, what was a ‘nice-to-have’ some years ago is a ‘need-to-have’ today. The message that has to be communicated is that need for innovation in an organisation is not just important - it is urgent.
The industry perspective
Several companies undertake initiatives to promote Innovation for the well being of the organisation as well as the employees. Some of them are mentioned below.
ITC e-Chaupal: One of the single-largest, integrated technological initiatives for rural India by a corporate entity. It empowers the farmer with real-time information, thus enabling better and faster decision-making. e-Chaupal, launched in 2000, today has spread across 9 states & 40,000 villages, and empowered more than 4 million farmers through 6,500 e-Chaupa! internet kiosk installations. It has also developed direct marketing channels that have helped reduce multi-level handling & transaction costs, and made logistics more efficient. It helps farmers to order high-quality agricultural inputs for their crops, keep track of the domestic and international agri-markets, prevailing market prices, best practices in farming and weather forecasts, in their local language.
Siemens Automotive: Siemens has a scheme called ‘Ideas Unlimited’, a democratic idea generation process that has elicited 4,000 suggestions from employees in the last year, of which 2,979 ideas have been implemented, saving Siemens approximately $ 1.44 million. The key to success lies in its simplicity; there is no paper work. The owner of every accepted idea is rewarded. Incentives plans are drawn up for managers and idea to accept and implement ideas.
Tata Motors: Tata Motors introduction of the Nano, when viewed from the innovation point of view, it becomes a classic case. of social innovation. Nano was aimed at changing India’s socio-economic pyramid. Middle and lower middle class families who could only think of travelling by two-wheelers or public transport are able to afford a four-wheeler with this launch.
CREDITS: Suresh Lulla, Founder & Mentor, Qimpro Consultants Pvt. Ltd.