Many great companies of today and in the past have remained in their top respective industry segments because of INNOVATION within. There are large ones like GE and McDonalds and very small ones, maybe just like your own. There are many definitions OF INNOVATION you can choose from: “the act of introducing something new”, “the successful exploitation of new ideas”, the Peter Drucker one—“change that creates a new dimension of performance. Whichever one you choose, they will all mean the same. In economics, business and government policy,- something new - must be substantially different, not an insignificant change. In economics the change must increase value, customer value, or producer value. Innovations are intended to make someone better off, and the succession of many innovations grows the whole economy. The term innovation may refer to both radical and incremental changes to products, processes or services. The often unspoken goal of innovation is to solve a problem. An important distinction is normally made between invention and innovation. Invention is the first occurrence of an idea for a new product or process, while innovation is the first attempt to carry it out into practice. An innovation is not an innovation until someone successfully implements and makes money on an idea. Extracting the essential concept of innovation from these other closely linked notions is no easy thing.
There are a number of types of innovation that have been identified by business school teachers: Business model innovation, Marketing innovation, Organizational innnovation, Process, Product, Service, Supply chain, Substantial, Financial, Incremental Breakthrough or radical, New technological systems, Social. Eric von Hippel has identified end-user innovation as by far the most important and critical in his classic book on the subject, Sources of Innovation. Innovation by businesses is achieved in many ways, with much attention now given to formal research and development for “breakthrough innovations.” But innovations may be developed by less formal on-the-job modifications of practice, through exchange and combination of professional experience and by many other routes. Stefan Thomke of Harvard Business School has written a definitive book on the importance of experimentation. Experimentation Matters argues that every company’s ability to innovate depends on a series of experiments [successful or not], that help create new products and services or improve old ones. Once innovation occurs, innovations may be spread from the innovator to other individuals and groups. This process has been studied extensively in the scholarly literature from a variety of viewpoints, most notably in Everett Rogers’ classic book, The Diffusion of Innovations.
One driver for innovation programs in corporations is to achieve growth objectives. Companies cannot grow through cost reduction and re-engineering alone. Innovation is the key element in providing aggressive top-line growth, and for increasing bottom-line results. Systematic programs of organizational innovation are most frequently driven by: Improved quality, Creation of new markets, Extension of the product range, Reduced labour costs, Improved production processes, Reduced materials, Reduced environmental damage, Replacement of products/services, Reduced energy consumption, Conformance to regulations. There is often failure in organized company programs too before success is achieved. Some research quotes failure rates of fifty percent while other research quotes as high as ninety percent of innovation has no impact on organisational goals. So do not be discouraged. The following are common across all organizations at some stage in their life cycle. Here are the five top failure problems: Poor goal definition. Poor alignment of actions to goals, Poor participation in teams, Poor monitoring of results, Poor communication and access to information.