‘Innovation is the process by which opportunities that have been identified through individual and organisational creativity are exploited’ Lowe and Marriott, 2017
Most organisations need to adapt constantly to an ever-changing business environment or customer needs. To ensure their survival and growth, new opportunities need to be exploited through effective innovation.
What is innovation?
Innovation is the practical application of creativity in an organisation. Creativity is especially needed in the early stages of the process, whereas innovation happens much later. Successful innovation builds on the idea of an incremental and efficient manner to solve a problem or develop a new product, service or process. Innovation can be categorised most simply into two main types:
An improvement in an existing thing (product, service, process)Radical innovation
An entirely new way of doing something
Every department of your organisation can contribute to innovation by adding value. Innovation can have an adverse effect on organisations that fail to innovate and get left behind, for example, Kodak, Woolworths or Blockbuster.
- Bring in new ideas to ensure survival
- Meet changing expectations
- Increase efficiency / reduce waste
- Ensure regular flow of new products / services or reduce cost
- Gain competitive advantage
- Drive industry sector to further innovation
Some questions to ask when deciding whether to innovate:
- Does it fit the strategy?
- Is it feasible in practice?
- Does it fit with the organisation’s policies?
- Are there any risks?
- Who are the stakeholders?
- What other factors could have an impact
Innovation is about making sure that good ideas turn into on- time, high quality and predictable products, services or processes. This does not happen by chance. You need to manage it carefully. Successful innovation requires a balance of:
- ensuring the efficiency of the current operation, whilst
- having the capability to create and develop new opportunities. There are four different approaches to innovation. Your organisation needs to decide which approach best suits its strategy:
To manage innovation effectively, you and your organisation need to establish a thorough process that includes:
- Idea generation
- Prioritisation, in line with your organisation’s strategy, customers, available resources
- Data gathering and testing
- Review and revision
The skills you need to manage innovation (adapted from Tidd, Bessant and Pavitt, 2005) are:
Continual and Continuous Improvement
Although sometimes used interchangeably, ‘Continual Improvement’ refers to changes or improvements to existing products, services or processes, whilst ‘continuous improvement’ is an ongoing effort that focuses on incremental improvements within existing products, services or processes through, for example, Lean and Kaizen techniques.
Continuous improvement, then, is an ongoing improvement effort through many small incremental steps rather than one overwhelming innovation. It is based on the view that incremental changes will add up to major improvement over time. It is a long-term practice that needs to spread through everything your organisation does. Ideas come from your team members and they take ownership and are accountable for improvements. Some organisations set up continuous improvement teams with considerable authority and empowerment.
Lean thinking, for example, is described by Womack, J. P. and Jones, D. T. (2003) as “the most single powerful tool available for creating value while eliminating waste in an organization”, whilst Six Sigma is a data-driven quality-control methodology for methodology for eliminating defects in a business process.
Implementing Continuous Improvement
- Examine your processes regularly to discover and remove problems, without apportioning blame.
- Eliminate activities which provide no value, and improve customer satisfaction.
- Have regular feedback and open communication with your team members, colleagues and stakeholders; continuous improvement is reflective.
- Encourage further ideas.
- Measure the impact of the change; decide if you could use it for other problems.
Lean Principles and Continuous ImprovementThe Lean Enterprise Institute (LEI) (2017) describes a continuous five-step thought process for implementing Lean techniques, beginning with ‘specifying value from the standpoint of the end customer’ until ‘a state of perfection is reached in which perfect value is created with no waste’. The process is then repeated.
Blank, S & Newell, P (2017). What Your Innovation Process Should Look Like Harvard Business Review
George, M. L., Rowlands, D., Price, M. and Maxey, J. (2005). The Lean Six Sigma Pocket Toolbook George Group Lowe, R & Marriott, S (2017). Enterprise: Entrepreneurship and Innovation Routledge
Lumsdaine, E & Binks, M (2006). Entrepreneurship: from Creativity to Innovation Trafford Publishing
Satell, G (2017). Mapping Innovation: A Playbook for Navigating a Disruptive Age McGraw-Hill
Tidd, J, Bessant, J & Pavitt, K (2005). Managing Innovation: Integrating Technological, Market and Organizational Change John Wiley and Sons
How well do you innovate? Test yourself with our Scorecard.
If you’re a member, you can test yourself on your Innovating skills and see if you meet the standard.
Spotlight on What is Innovation
06 March 2018
Spotlight on Managing Innovation
19 February 2018
Spotlight on Continuous Improvement
19 February 2018
Spotlight on Lean and Six Sigma
04 December 2018
11 April 2018
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