We hear all sorts of talk these days about the importance of innovation. But what exactly is innovation, and what is its value in the workplace?
According to the Spring 2006 MIT Sloan Management Review, innovation is about new value, not new things. So presenting something "new" or "better" can be risky. The wrong product (such as 'new coke') or the right product at the wrong time can devastate a company's image, or worse yet, destabilize a company's competitive edge. So where should we innovate? How? When?
Perhaps one factor to keep in mind is timing. Back in the 1930's, a law student named Chester Carlson became frustrated with the slow copying process of mimeograph machines. His invention of xerography was revolutionary, but it wasn't until 1950 that photocopiers were marketed to businesses, after the Haloid Company (eventually to become the Xerox Corporation) took a risk on Carlson's invention.
The point is that many innovations are wonderful, but they don't always pay off right away.
Speaking of Xerox, we all know of their success in the photocopy industry. Yet many are unaware that they blew a huge opportunity when they invented the first personal computer, but their leadership failed to capitalize on it. Sometimes innovation is missed by those who should be looking for it.
Something else to consider is financial projections. New ideas can be a gamble because nobody has a crystal ball: Trying to roll out a new idea may end up wreaking havoc with your cash flow.
In his book Renovate Before You Innovate: Why Doing the New Thing Might Not Be the Right Thing, Sergio Zyman says "only one of every 58 new product introductions succeeds." To make matters worse, success in these new roll outs often occurs at the expense of other products or services offered by the company.
On the other hand, if you're in tune with your market and innovation hits you at the right moment, you can create a booming success. The iPod is just one example of a product exploding on the scene at the right time.
But successful innovation doesn't need to be huge. From my own personal experience, I have learned it is wise to value even the little innovations.
Most of us can point to an occasion when one small, simple idea was implemented, and that first idea led to yet another idea, and the second idea led to a third, and so on. As the chain continued, it wasn't until the fifth or sixth idea that a huge "ah-ha" made itself known, creating an entirely new - and valuable - product or service. Yet if we had ignored the first simple suggestion, that one big profitable idea might never have crossed anyone's mind.
Again, innovation is about new value, not new things. Research by Mohanbir Sawhney, Robert Wolcott, and Inigo Arroniz in the Sloan Management Review reveals twelve ways a company can look for opportunities to innovate.
Space limitations prohibit examining all twelve categories here, but the researchers suggest that when company leaders are aware of where innovation can make the biggest impacts they can make better strategic decisions.
Some companies can make the most gains through creating new products and services. Others through improving their internal processes. Still others can make gains through innovative changes in their supply chain or in their organizational structure.
The idea is to be aware of where you can innovate, how realistic the innovation will be to implement, how well the innovation will be received, and what kind of 'hidden costs' might be at risk.
It is also important to remember that innovation can occur on multiple levels and in multiple arenas, so think expansively and keep an open mind about how to improve the value of what you do. Foster an environment of creativity by letting people present new ideas without fear of negative consequences.
Granted, not all ideas need to be - or can be - implemented, but they shouldn't be ignored, and they certainly shouldn't be set aside before they've been seriously considered. No matter how big, small, new, or old is your industry, innovation can always be foundóif you're open to it and looking for it.