Innovation refers to anenterprise-wide pervasiveattitude focusing on theprocess of convertingnovel ideas intosomething of value.

Innovation provides a wayto improve overallperformance throughsmarter ways ofconducting organizationalactivities.

 

Unfortunately, innovation is often conflated withstrategy.

Strategy, after all is a coherent and substantiatedlogic for making choices, while innovation is amessy business which creates novel solutions toimportant problems.

Put simply, strategy is about achieving objectives,while innovation is about discovery, we never knowexactly where we’re going until we get there. 

In other words, while strategy creates a clear pathto a goal, innovation is often confused.

 

Competency: Every organization has its own history and set ofcapabilities which determine its innovation competency. An old-lineindustrial firm can’t just wake up one day and decide to operate likea hot Silicon Valley tech startup overnight, nor should theytry. However, every enterprise can improve.

Tim Kastelle, who researches innovation, has built a powerfulframeworkbased on competence and commitment that will help youclimb the ladder from laggard to world-class innovator.

Strategy: As an manager knows, resource allocation is critical tostrategy and therefore needs to be an integral part of aligninginnovation to strategic objectives.

 Again, professor Kastelle provides valuable guidance with hisversion of thethree horizons model which suggests a 70/20/10 splitbetween improving existing products and processes, searching outadjacencies and exploring completely new markets.

Management: Even the most competent firm which deploysresources wisely still needs to manage innovation effectively.

 

The major approach they took is to focus oncustomer communication and responded to theirrequirements.

They made changes and altered the way they dobusiness to make their customers morecomfortable.• Wooden shelves for books• Bar, live music etc.

Focused on small improvements to make thecustomers happy & taken initiatives to measure thedifferences.

 

gerecxvcx

 

 

 

 

 

 

 

 

 

 

 

The Innovation framework combines 3 views oninnovation:• Resource view : Input : capital, labor and time

Output: return on investment

• Capability view: Input: culture, conditions to support innovation

Output: new skills, expansion of knowledge domains

• Leadership view: Input: to what degree the leadership supports innovation

• Process: organization structure, market opportunities, incentivestructure, incubators

 

Input Matrix Output Matrix

Resource R&D Expenditure % of

Total Expenditure

Increase in Sales

Capability Time & effort spent on

customer communication

& surveys.

Number of new change

implementations.

Leadership % of employees

recognize strategic focus

on innovation

Ratio of number of

changes proposed to

number of changes

approved for

implementation