Expert Opinion

The front end, or input, of any innovation process lies in ideas, and the ability to introduce new products, services, and processes depends on the pool of ideas available and the ability to generate new ideas.

Ideas and innovations within the organisational context are contributions made with the objective of improving the operations of the organisation. New ideas might relate to:

• New products and services

• Improvement of current products and services

• Improvement of processes (e.g. as used in continuous improvement initiatives), and include information and communication technologies, manufacturing/service process technologies and/or product development technologies.

The overall aim of an innovation strategy is to harness new knowledge and ideas in order to deliver new value to customers. A key objective of innovation is to create results that have a positive impact on the business. It is important that organisations proactively seek feedback and suggestions in order to improve performance, and there should be mechanisms established that encourage and facilitate the provision of ideas and feedback from all possible sources.

Many performance frameworks have a key focus on innovation. The Baldrige Criteria for Performance Excellence for instance (an international standard for Business Excellence practices), includes ‘Managing for Innovation’ in its 11 Core Values and Concepts in recognition of the importance of this issue. The Criteria states:

“Innovation means making meaningful change to improve an organisation’s products, services, and processes and to create new value for the organisation’s stakeholders. Innovation should lead your organisation to new dimensions of performance. Innovation is no longer strictly the purview of research and development departments; innovation is important for all aspects of your business and all processes. Organisations should be led and managed so that innovation becomes part of the culture and is integrated into daily work”.

Specifically, the following items require companies using the criteria to describe, and have in place actions, to accomplish innovation:

• 1.1.a.2 - How do senior leaders create an environment of empowerment, innovation and organisational agility?

• 3.1.a.2 - How do you listen and learn to determine key customer requirements and expectations?…How do you use this information for purposes of product and service planning, marketing, process improvements, and other business development?

• 5.1.a.1 - How do you organise and manage work and jobs to promote cooperation, initiative, empowerment, innovation and your organisational culture?

• 6.1.a.6 - How do you improve your value creation processes to achieve better performance, to reduce variability, to improve products and services, and to keep them current with business needs and directions? How are improvements shared with other organisational units and processes?

The identifiable benefits of encouraging innovation include:

• Increased competitive advantage (resulting in increased sales);

• Improved operating efficiency or effectiveness (resulting in reduced cost);

• Increased revenue;

• Reduced ‘time ‘to market’ for new products and services;

• Implementation of improvements to existing products, services or processes;

• Increased efficiency of the innovation process itself;

• Increased customer and stakeholder satisfaction.

In new and dynamic markets the rate at which new ideas and innovations are introduced can be a key determinant of competitiveness. In markets where new products and time to market are order winning criteria, ensuring that the idea/innovation introduction rate is better than your competitors can be essential. However, it must be remembered that not all innovations and ideas involve new products or services, or even major new concepts. Many new innovations are creative ideas and suggestions for small improvements to already-existing products/services/processes and, in total, may be just as vital to the organisations future and competitiveness as a totally new innovation or idea.

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