Innovative Process

8/8/2019 Innovative Process

http://slidepdf.com/reader/full/innovative-process 1/9

2010

SMOE

K .Povenesan

B.Eng(H ons) M al,M Sc (Adelaide)

[RESEARCH PAPER ON INNOVATIVEPROCESS]An argument on what the innovative process is and how you would go about implementing this in an organisational setting.



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Innovation in a company setting, is to create or change something, be it a product, a route to market, or

even back-office business process to generate revenue or provide a cost-savings opportunity. I would call

it as “DARE FOR A CHANGE”. Change is like a wave. Either once can ignore it, in which case the change

will overtake him and will drown him or one can get a surfboard and ride the wave. It may not take him

where he thought he would be, but it will be a whole lot better than drowning. Organizations that are

innovative are change-ready.

According to Peter F. Drucker, “The best way to predict the future is to create it”. We are facing

changes that cannot be addressed with traditional methods, because change itself has changed. Solutions

that worked in the past now simply cause more problems. A whole new perspective is needed to approach

breakthrough change with success.

A business concept or model is a framework for identifying how one’s business creates, delivers, and

extracts value. In today's world of discontinuous change, there is no continuity without constant renewal. A

survey found that more than 90% of large organizations are committed to innovation. (In this case, i’ve

taken my company as a case study) Yet when managers of my companies were asked to describe our

corporate innovation system, almost none of them could do it. One explanation for this mismatch is that

top management is just paying lip service to innovation and has no intention of really working hard on it.

Another and far more likely explanation is that senior leaders do not have a clear, well-developed model of

what innovation looks like as an organizational capability. Since they don't know what it looks like, they

don't know how to describe or build it. Innovation applies to all business activities, not just end products.

Innovation can be in logistics such as in the case of Wal-Mart, merchandising like Starbucks, and selling

like Dell. Pioneers rethink the entire business concepts & build new business models from ground up.

Today greatest amount of wealth goes to those who create new business models, create new sources of

revenue based on changing technology, changing demographics and changing global demand.

According to Gary Hamel, “True innovation is based on the recognition that a business concept

represents a dozen or so design variables, all of which need to be constantly revisited and constantly

challenged”.

Managers have to think creatively & holistically about their entire business concept. Strategic

innovation differs from product innovation. Companies today can succeed through innovative strategies

alone. Southwest Airlines, Dell, IBM, EBay etc. succeeded through innovative strategies. Innovations need

not be risky, but something that changes customer expectations & competitiveness for the better. Only

innovation creates new wealth. Stock markets reward only those with successful innovation.

I would propose my company a local oil and gas corporation an innovation process which can be

supported by current organizational structure and I selected after considering companies strengths and



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weaknesses with minimal tolerance for risk within the company. Will the culture within the corporation

support innovation development procedures? Another question that ponders me, which will be discussed

later section.

Practical innovation is about taking ideas and new thinking and focusing them into a direction and then

executing that direction; in other words, starting with the thinking, creating the strategy (strategic planning)

and then executing the strategy. This focuses the innovation on real-time problem solving.The innovation process is divided into two broad modes of thinking: “Divergent” and

“Convergent”. The “Divergent” mode lies at the heart of the Strategic Innovation approach. It is open-

ended, exploratory, and inquisitive, deploying non-traditional, creative thinking and future visioning

techniques. It includes “exploratory” consumer/customer insight research, qualitative exploration of

industry/market trends, and speculates on possible industry discontinuities, etc.

It is here, with the notion of “Divergent thinking” that my organization often fails in their attempts to

innovate. Believing that it is frivolous, “blue sky”, time consuming and slows time to market, they choose to

minimize or neglect it.Impatient for short-term success, driven by quarterly scorecards, or constrained by a corporate mindset

that has to demonstrate activity and quickly “get to the answer”, my corporation find it hard to step back

and diverge. This often results in predictable, uninspired, incremental innovations that clog the pipeline

and take a great deal of time and resources to manage.

In reality they could have far greater impact had they taken the time to diverge at the outset,

acknowledge their “blind spots” and explore potentially fruitful areas, and fill the pipeline with well-

grounded, “bigger ideas” that offer greater potential.

It is “Divergent” thinking, then, that opens the door to the possibility of identifying breakthroughs. Mycompany have no difficulty generating ideas for new products. During this “Divergent” mode it is important

to explore other areas for innovation, such as new ways to work with external partners, communicate with

consumers or enable faster time-to-market. This is true even if the effort is focused on new products, since

these other factors directly impact the success or failure of the new product concepts.

Subsequently, through “Convergent” processes that call for traditional business tools, techniques and

data analysis, potential opportunities are evaluated, prioritized, refined and then often moved through a

formal decision-based Stage Gate process until the most promising ones are implemented. Throughout

the entire process, a focus on short-term opportunities that leverage “low hanging fruit” is paired with thesearch for mid- and long-term breakthrough growth strategies.

While the elements of the process generally occur in a particular sequence there is not one single, rigid

road map – the path is non-linear, modular and responsive to the needs of the moment. It is flexible and

creative, providing the glue, the spark and the artistic magic that weaves together the dimensions of

Strategic Innovation in real-time.



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The elements of the Managed Innovation Process vary depending on the business challenge (growth

strategy, product innovation, packaging innovation, etc.), but broadly speaking is as follows:

The process is designed and managed to create strategic alignment – the enthusiastic internal support

among key stakeholders required to galvanize an organization around shared visions, goals and actions.

Industry Foresight provides a “top-down” perspective that seeks to understand the complex forces

driving change, including emerging and converging trends, new technologies, competitive dynamics,

potential dislocations and alternative scenarios.

Consumer/Customer Insight provides a “bottom-up” perspective, a deep understanding of both the

articulated (explicitly stated) and unarticulated (latent or unrecognized) needs of existing and potential

consumers/customers.

My firms’ innovation process includes wide range of activities implemented from the genesis of the

initial idea through its realization. This therefore involves research & development, industrial legal

protection, launches of production and ultimately use of innovations in practice.

One of the first challenges in the innovation process is to generate ideas. Almost 60% of my group of

companies responded that they are unable to generate enough innovative ideas to build a pipeline of new

products or support ongoing process change. To fill this pipeline, 56% of them suggest that our

organisations rely on cross-functional teams, while some 40% work with consultants. But even with these

teams in place, results are often disappointing. But it gets worse: when asked about the most difficult part

of the innovation process, very few of them suggest that ideation is the biggest bottleneck. Almost 60% of



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them report that taking good ideas and bringing them to implementation—whether introducing a new

product or transforming a business process-is by far the most challenging aspect of corporate innovation.

Companies like Google and Apple best typify the corporate culture that actively generates innovative

activity. I would like to have the same in my corporation as one of the key factors is the ability to accept

some loss of control. All companies face a trade-off between control and adaptability. At here, we shall be

explicit about our willingness to live with a bit less control in exchange for more flexibility.This loss of control isn’t really a loss-it’s largely a transfer from senior managers to the wider

companies’ community. As responsibility for coming up with exciting new process and product ideas gets

pushed out further into the organisation- although not in all case everybody gets to make all decisions; it

also becomes more important to tolerate mistakes. We shall have an approach of deliberate

experimentation, which means we need to be more tolerant of failure.

This appetite for risk is another recognised element of a successful innovation culture, especially in the

technology field. Risk-taking must be one of our core values. The day we stop taking risks is the day we

know that some other O&G Company will take advantage of technology innovation better than we do. Weshould willingly take risks in supporting new projects. The tendency is to play it safe when funding is low,

but we need to remember that the greatest risks have the greatest payoffs. In addition, individuals or small

groups should be given sufficient latitude to develop new ideas, which take time and are often only

accepted with difficulty by others.

Cultural transformation has to start at the top. Culture is a function of how senior management thinks

and acts - I say that leadership commitment is the most important element of a culture of innovation. And

this can be as much about what leaders don’t do as what they do. At Google, they are blessed to have

company leaders who are comfortable getting out of the way of the smart people they’ve hired. They’recomfortable with a degree of messiness.

While leading is important, it’s also crucial to get the right people in the door in the first place - staff who

are flexible and enthusiastic about change. People who innovate should get recognition and appropriate

compensation for what they do, especially young people. We should not allow institutional boundaries to

impede interdisciplinary research. Some of the most important innovations of the future can be expected

from such collaborations. Excessive bureaucracy is distracting, time-consuming, and destructive to

creativity.

The critical ingredient to a culture of innovation is the remuneration and incentive structure. Mr Charan,the innovation author, puts it this way: “What is company culture? It’s what people do routinely without

being told. Once innovation is integrated into the firm’s main decision-making process, and people are

being evaluated on and praised for their innovative activities on a regular basis, a culture of innovation will

emerge naturally.” Having worked with the CEOs of many of the world’s largest companies, he suggests



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that this is something few companies do well. Just under half listed a mismatch between staff incentives

and operational metrics as either a “very significant” or “significant” barrier to innovation.

Conclusively, I’ve learned that for implementation, below are important criterions;

Attitude is everything. Ideas implemented enthusiastically by the rank and file get done easily and

quickly, whereas ideas from the top down are slow to communicate and have lower probability of

success. Proactive listening & measured opportunity develops skills that lead to change with the right

attitude.

100 Employees with big ideas are always more enthusiastic about implementing their ideas than

ideas of a few smart exec’s.

Employee operations’ knowledge is greater than that of management and leads to better and more

cost effective ideas for improvement.

A culture of change (innovation) is an overlooked corporate asset. When change in a culture is

sustainable, new ideas become more and more sophisticated over time. All employees feel compelled

to continually find new ideas for productivity improvement and internal growth (new product and product

enhancement innovation). Intellectual property (know how and corporate agility) grows from using it and

disseminating it.

Innovation is a Team effort - Over and over again, we have seen the team excel. An individual may

initiate the idea but the team makes it work.

Learn by doing - This grows "know-how" and intellectual properties, the real value asset.

Common purpose generated – the Company create a sense of belonging, achievement, status and

recognition from the boss, peers, family & friends. And this work environment is fun!



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Appendix 1:



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Figure 2: Innovative Process

(Adopted from Michael Stanleigh, http://www.bia.ca/articles/inno-vision-to-reality.htm )



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References:

Matthew Shinkman, "The innovators;How successful companies drive business transformation," AnEconomist Intelligence Unit briefing paper Sponsored by SingTel , 8 (2008), pp. 10-20.

Michael Stanleighy ., 2008 , From Vision To Reality: The Innovation Process http://www.bia.ca/articles/inno-vision-to-reality.htm Accessed 2010-03-13

Ram Charan., 2008, The Game Changer; How You Can Drive Revenue and Profit Growth withInnovation. Crown Business pp. 115-121

Peter F Drucker., 1999, Management challenges for the twenty-first century. Harper Business

Gary Hamel., 2007, The future of management , Harvard Business Press, 4(3): 80 - 98.

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Innovative Process

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