How to Foster Innovation in Business Organizations

Uma Shankari By Uma Shankari, 21st Nov 2013 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Business>Leadership

To be effective, organizations need to ingrain innovation as part of their culture.

Why is Innovation Essential for Success in Business

In today’s competitive world, success cannot come from merely aping successful policies; instead, it calls for innovative ways of doing things and revolutionary changes in thoughts and processes. Innovation is what sets an organization apart from the competition. It is the ability to perceive the world in new ways, to find hidden patterns and make connections between seemingly unrelated phenomena, and use these to generate new ideas, products, processes and services, or vastly improve their quality.

Innovation involves exploiting new technology and employing out-of-the-box thinking to generate new ideas. Innovation comes from a blend of minds and the collaboration of multi-discipline teams with different backgrounds. Innovation in an organization requires networking of individuals and departments; and even at an individual level, it requires the networking of right and the left brain: right-brain for imagination, artistry and intuition, and left-brain for logic and planning.

Can New Ideas Alone Make Innovation Possible?

New ideas, even when backed by powerful vision, are worthless by themselves. You need to move from idea to execution, and that is where the majority of companies stumble. Execution needs networking of planning, R&D, and production and involves several iteration to ensure they meet the stated visions and goals.

How To Incorporate Innovation as Organization Culture

Many businesses involve customer input into their R&D to provide innovative solutions. This should be an on-going effort, and not a one-time brainstorming blast. The employees interacting with the customers should be trained to hear not only the spoken words but also their unspoken or implied needs. Every expression of idea should be respected, without passing on any critical judgment, so that creative ideas are not discouraged. Ideas need not focus just on product improvement alone; internal process and workflow improvements are essential too. Ultimately, these improvements are the ones that contribute to lowered costs and increased quality and customer retention.

What often looks like breakthrough innovation is actually a small advance or twist on an established idea or a remix of existing ideas. A recent example of innovation that is often quoted in the media is Tata Motor’s Nano car. The Tatas realized that there were large numbers of people who currently used two-wheelers and even the lowest priced cars were out of their reach. Ratan Tata decided to go with thin profit margins in favor of gaining a large customer base and offered Nano for half the price of the closest competitor, Maruti Udyog, at about $2,500 retail, making it the most inexpensive car in the world.

To make this inexpensive car, Tata Motors challenged existing design conventions and omitted several luxuries like air conditioning to make it cost-effective and functional. The car currently meets all Indian emission, pollution, and safety standards, though it only attains a maximum speed of about 65 mph. The low price point has left other auto companies scrambling to catch up.

It is not enough for the management to solicit advice or ideas to solve their problems, they should provide flexible yet disciplined work environment, trust, and freedom that makes allowances for failure of their innovative ideas. There should be a regular forum where employees can brainstorm the repercussions of introducing new concepts and their relevance. Innovation can introduce unpredictable changes in the normally orderly business systems. Hence it is important to allow autonomy to their employees and not impose unrealistic deadlines on assignments. Instead of relying on the number of hours clocked in, there should be other parameters to evaluate the creative ideas and their execution.

To make innovation a regular, repeatable feature, organizations should include innovation in their vision statement, add it to the job description of key players and use it in performances reviews, so that they are encouraged, in turn, to include it in their milestones and goals.


Business Management, Encouraging Innovation, Innovation, Management Role

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author avatar Uma Shankari
I write on society, relationships, travel, health, nutrition and fitness.
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30th Nov 2013 (#)

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