Innovation

In business innovation means something new, it must be substantially different, not an insignificant change. The change must increase value, customer value, or producer value. Innovations are intended to make someone better off, and the succession of many innovations grows the whole economy.

Innovation is about creating value for the innovator as well as the user. The term innovation may refer to both radical and incremental changes to products, processes, or services. The often unspoken goal of innovation is to solve a problem.

Innovation solution may lie in the technology (product etc.) employed or it may lie in altering a business model (processes, value proposition, value chain, complete offering, services, etc.).

Innovations fall into three camps, radical, semi-radical, and incremental. Each has an associated risk level and is usually correlated with a time frame. For example, radical innovation may require a large amount of investment usually taking in excess of 18 months to develop.

Key success factors to successful innovation include:

• Customer information and data.
• Exert strong leadership on the innovation strategy & portfolio decisions
• Integrate innovation into the company’s basic business mentality
• Align the amount and type of innovation to the company’s business
• Manage the natural tension between creativity & value capture
• Neutralise organisational antibodies
• Recognise that the basic unit of innovation is a network that includes people and knowledge inside and outside the organisation
• Create the right metrics & rewards for innovation