INNOVATION DEFINEDInnovation is not a random event; it is the process that transforms ideas into commercial value. It includes discoveries made by the R&D function, but it also involves the knowledge and efforts of people in all business functions of an organization (Sales & Marketing, Finance, Operations, Customer Service, etc.). In a phrase, innovation is a team sport!
GOAL of INNOVATION Moreover, CIMS believes that for the long term well-being of the firm, innovation must be learned, practiced, measured, and, continuously improved. Companies cannot grow through cost reduction and reengineering alone. While many managers may feel more comfortable controlling costs and expenditures, innovation is key to providing aggressive top-line growth and for increasing bottom-line results.
TYPES of INNOVATION Generally, there are three different types of innovation: (1) product and service innovation which focuses on improving a company's products and services; (2) operational, or process innovation, which focuses on making an internal business process a core strength, such as Toyota has done through its lean automotive production process; and (3) business model innovation. which focuses on creating a new formula for the enterprise to make money. Google, for example, has reinvented the way companies make money by advertizing on the Web. And, Apple has changed forever the way music is sold and distributed. CIMS prides itself in helping to demystify innovation. Here are some more definitions that are intended to help organizations classify, plan, and execute their innovation initiatives: 1. Product and Service Innovation Ideas about possible market opportunities made possible by new technologies is often the point where innovation begins. Product and service innovation focuses on bringing to life new capabilities - some, that future users can't even express - that benefit both customers and the companies who provide them. Organizations engaged in product or service innovation preoccupy themselves with listening to customers, differentiating their offerings, and speed of execution. Examples are Nintendo's Wii gaming system (product innovation) and Virgin Atlantic and Southwest Airlines (service innovation). 2. Process Innovation Process innovations can increase bottom-line profitability, improve efficiency and productivity, and increase employee job satisfaction. They can also deliver enhanced product or service value to the customer. They frequently involve the implementation of a new or significantly improved production or delivery method. For example, Dell revolutionized the way computers were ordered and delivered through its "direct" order fulfillment model. 3. Business Model Innovation Business model innovation involves changing the very way business is done in terms of capturing value. It often involves companies shedding "non core" business functions and reconfiguring its value chain. Business model innovation emphasize external collaboration and partnerships. Proctor & Gamble, as well as Eli Lily, are exemplars of companies today employing open, collaborative innovation models.
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