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Starting and growing a business is as much about the innovation, drive and determination of the people who do it as it is about the product they sell."
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Jetzt kostenlos anmeldenStarting and growing a business is as much about the innovation, drive and determination of the people who do it as it is about the product they sell."
- Elon Musk
Innovation is an important process for all businesses to adopt. Without innovation, businesses might eventually lose customers and market share to more innovative competitors. So how can businesses implement innovation into their overall strategy? Let's find out.
There are a couple of different types of innovation a business can pursue.
Innovation is a process. It is not something that a business does once or twice when innovation is necessary, rather, innovation is a continual process within the organisation. Innovation is a creative process that is undertaken by a firm to create new or develop existing ideas, processes and products - to add value.
Disruptive innovation is a form of innovation that makes very expensive or complex products accessible to a larger number of people. This type of innovation disrupts the market completely by making the business environment more competitive
Important Note: it is essential for all businesses to pursue innovation, as it can result in a sustained competitive advantage - helping the business stay competitive.
There are two main types of innovation:
Product innovation: when a business develops new products or services that were previously unavailable or did not exist. Completely new products are often developed in order to meet changing consumer wants and needs. Product innovation can also take form as the development of existing products - when existing products are modified (i.e. Better performance, easier to use, etc) in a way that adds value. Product innovation is useful for differentiating products from competitors' products.
Process innovation: includes improving existing processes to improve the efficiency of the business. An example of process innovation would be implementing a new system or equipment that increases the capacity and speed of production.
Innovation can come from either inside or outside of the organisation.
Intrapreneurship is a type of internal innovation - coming from within the organisation.
An intrapreneur is an individual (i.e an employee or manager) that acts like an entrepreneur, the only difference being that intrapreneurship comes from within an established organisation. The way intrapreneurship differs from entrepreneurship is that risks and rewards are taken and received by the established company rather than the entrepreneur.
De Jong (2016) argues that there are three main characteristics associated with intrapreneurship: risk-taking, innovation and proactiveness. A company can encourage risk-taking and innovation by allowing employees to work on personal projects that are unrelated to their current work projects and by creating smaller subunits or cross-functional teams that allow for a wider range of ideas and perspectives on tasks or projects.
Kaizen is a Japanese approach to business philosophy in which continuous improvement is implemented in order to facilitate efficiency and innovation.
The approach assumes that since employees are the most familiar with the day-to-day processes of the firm, they are most likely to notice issues. Therefore, the Kaizen method encourages employees to be creative in how to fix existing problems and come up with new ideas and processes. These changes tend to be small and do not require major investment to implement. This is where the idea of continuous improvement comes from - the innovation is incremental rather than disruptive.
The Kaizen cycle for innovation is as follows:
Get all employees of the organisation involved.
Outline and identify specific problems.
Encourage solutions and choose a set of ideas.
Test whether the ideas work as a solution to the problem.
Continuously analyse the results of the test.
If the results are positive, adopt the solution.
Repeat each step continuously.
Research and development (R&D) is often used for product development. This is a process companies undertake to promote innovation. R&D can be an internal function of the company, where the company has a separate functional department set up specifically for R&D, or it can be external to the company. Research and development usually take place through the following process:
Market research: to assess and analyze the needs and wants of consumers. Has there been a change in demand? Are there any opportunities in the market that have not been addressed by current product offerings?
Development: During this stage, the initial product and prototypes are being developed.
Testing is when the prototype has been made and is being evaluated. Products can be tested by giving access to the prototype to a sample group of customers. The sample group then provides feedback on their experiences with using the product.
Place and promotion: finally, if the product is successful it will be distributed through specified channels and consumers will be informed about the product through promotional activities.
Innovation is intellectual property (IP) and can be protected through patents, trademarks and copyright.
Intellectual property refers to intangible assets or the creativity of the company (like ideas, processes, a brand name, etc). These can be legally protected to stay more competitive and reduce the threat of competitors.
A patent is granted to the inventor of an idea, process, design or invention for a period of time in exchange for the full disclosure of the invention. Patents are quite difficult to obtain as the invention has to be new and applicable.
A trademark is any symbol, word or phrase registered to be representative of a company, brand or product. When a trademark is registered, it is legally recognized as representing the company or brand. A trademark has to be recognizable and distinguishable - to differentiate it from other competitor companies and brands.
The Apple or McDonald's logos are examples of a trademark.
Copyright is used to protect artistic creations like music, videos, photography, writing, etc. Copyright is not something that an individual has to specifically apply for - it is granted automatically.
Desirability, feasibility, and viability are some of the criteria used for assessing innovation.
Innovation assessment helps in analysing the innovations that a business has currently.
Product innovation and process innovation.
Intrapreneurship, and Kaizen are some of the steps in innovation assessment.
Benchmarking, and value analysis are some tools used for innovation assessment.
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SIGNUP SIGNUPFlashcards in Assessing Innovation30
Start learningInnovation is:
All the above answers are correct.
What is innovation?
Innovation is a creative process that is undertaken by a firm to create new or develop existing ideas, processes and products - to add value.
What is disruptive innovation?
Disruptive innovation is a form of innovation that makes very expensive or sophisticated products accessible to a larger number of people.
What are the two types of innovation?
Product and process innovation.
What is process innovation?
Process innovation includes improving existing processes to improve the efficiency of the business.
What is product innovation?
When a company develops a completely new product or improves an existing product by adding value.
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