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Principles of Innovation

Entrepreneurship - Innovation

They are the underlying laws and rules to be generally followed or can be desirably followed during the process of innovation.

  • Innovation commences with the advent of new ideas

New ideas emerge when people try to answer questions, solve problems or overcome obstacles. The process of innovation is thus indebted to the obstacles that arise when we are surrounded by unsolved problems and unanswered questions. Therefore, for innovation process to flourish, required is an environment that encourages inquisitiveness and welcomes problems.

  • Innovation needs a system

All organizations have innovation systems both formal and informal. The formal system is created by the leaders and the managers and the informal extends beyond the established channels.

  • Innovation is work

Innovation requires versatile knowledge, great ingenuity, talent, diligence, purposeful work, commitment, persistence and highly focused thought process.

  • Passion drives innovation

Passion is the fuel that propels the ideas and is a valuable company asset in addition to talent and skills. Passion transforms the resources into profits.

  • Co-locating drives effective exchange

Co-location refers to the physical proximity between the people working in an organization. It helps build trust among them which further increases the likeliness of greater exchange of ideas among them, cross-fertilization of these ideas, and stimulation of creative thinking and critical analysis of these ideas during their formative stage.

  • Leveraging the differences
    • The differences, such as language, culture, race, gender, beliefs and thinking that generally act as barriers to bringing people together can be fruitful for innovation.
    • Using these differences constructively in the right direction can help enhance the trust and tolerance among the people and in turn enhance and sustain the innovation process.
  • Innovation involves analysis of opportunities
    • Purpose innovation starts with the analysis of opportunities and their sources.
    • All these sources have different importance at different times and at different places.
    • The search for the sources of opportunities must be organized and should be carried out regularly in a systematic manner. All these sources must be analyzed systematically in a well-organized manner.
    • Pinpoint the innovative opportunity and exploit it advantageously.
  • Go out to look, to ask, to listen
    • Analyze how the innovation has to be carried out so as to ensure that the opportunity is availed advantageously.
    • Perceive whether the adopted approach to innovation would meet the expectations and needs of the users and consumers.
  • Simple and focused
    • The innovation aimed at creating new uses and markets needs to be focused and in sync with specific need which it requires to cater to. The goal of innovation should be clear and unambiguous. Innovation should be focused on a specific need that it must satisfy and on a specific end result that it must produce.
  • Innovation should be capable of being started small with limited capital and resources, manpower and limited market
    • The changes required to ensure the effectiveness of the innovation effort can be incorporated successfully only if the innovation process is carried out at a small scale and requires people and money in fairly modest quantity.
  • Innovation affects society and economy
    • It brings about a change in the behavior of people and in the way people work and produce something.
    • Innovation should therefore be close to the market, focused on the market and driven by the market.

 The Ten Principles of Permanent Innovation

“Innovation is the process of creating new ideas and turning them into new business value. Permanent innovation is the process of doing it continuously, by developing an organizational culture that embraces innovation as a core value, practices innovation as a core methodology, and produces innovation as a consistent output” - Langdon Morris

  • Innovation is essential to survival of businesses and is strategic in nature.
  • Innovation can be incremental, breakthrough product and technologies, new business models and new ventures.
  • The sooner the innovation begins, the better are the prospects of increased market share and profits.
  • Innovation happens when people come together, interact and exchange ideas.
  • Innovation should be driven methodically to ensure consistency, predictability and sustainability.
  • Innovation strategy must leverage all four viewpoints: Top-down, Bottom-up, Outside-in and Peer-to-peer.
  • Great innovations begin with great ideas. Identification of these ideas requires recognition of unknown and unfulfilled needs.
  • Effective innovation requires careful targeting and using resources wisely.
  • Rapid prototyping accelerates the learning process and is central to effective innovation methodologies.
  • Innovation cannot be achieved without leaders whose words and actions support and enhance innovation efforts and methods and who work diligently to eliminate the hurdles that hinder creativity and innovation.

Failure of Innovations

Failure may also creep in as a part of the innovation process. All innovations involve risk and profits are the rewards of undertaking this risk. While innovation typically adds value, innovation may also have a negative or destructive effect as new developments clear away or change old organizational forms and practices. Organizations that do not innovate effectively may be destroyed by those that do. Hence innovation typically involves risk. All innovations begin with creative ideas that have strong potential but may fail due to rejections or postponements that may be caused by both internal and external factors. The internal factors may be the budgetary constraints, lack of people with the required skills, incomplete definition of goals, etc. The external factors are beyond the organization’s control but influence it directly. These failures cause not only monetary setbacks to the organization but may also affect its reputation in the market, the morale of the employees and the wastage of scarce resources. Most common reasons for unsuccessful innovations that are common across all organizations are listed below. They act as dark clouds of suppression of an innovative effort.

  • Poor organization and leadership
  • Poor communication and limited access to the information
  • Poor definition of goals and further improper alignment of actions to goals
  • Poor participation of employees in the innovation process
  • Poor delegation of responsibilities and monitoring of process results

Innovation is Inevitable

Poorly implemented corporate initiatives might deteriorate the growth of an enterprise. It may lead to a reduction in quality levels and stagnation in sales. Innovation leads to faster growth, increased market share and better corporate positioning. Innovation is the prime strategy for the first decade of the twenty-first century. If you don’t innovate, customers stop buying your products, processes and services, sales drop, revenues drop, shareholder returns drop, stock prices drops, employees leave.

With rapid changes in business environment and technology, newer products coming from new competitors and shorter product lifetimes, there is a need to replace the products sooner. The products available in the market place are becoming increasingly difficult to differentiate. Customers are more sophisticated, segmented and demanding, and expect more in terms of customization, novelty, quality and price.  With markets and technologies changing fast, and good ideas quickly copied, there arises a need to devise new and better products, processes and services. Innovation is thus vital for both success and sustainability of business.

Innovations may be accompanied with criticisms but criticisms can lead to new business opportunities.

Author: Oxygen
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