Business Strategy- A structured path to Innovation (Part 2)

Business Strategy- A structured path to Innovation (Part 2)

 

(Conceptual abstract from my book Monetising Innovation (A Bloomsbury Publication), focussing on the section on Business strategy to innovation. This write-up was published in Indian Management, January 2016, journal of All India management Association. Detail in www.gautamborah.com)

Innovation…..so near yet so far

The subject of Innovation is protean, and so are its various notions.

Innovation, as viewed by Porter is, ‘A new way of doing things (termed innovation by some authors) that is commercialised. The process of innovation cannot be separated from a firm’s strategic and competitive context’.3 The OECD Oslo Manual has defined innovation as, ‘The implementation of a new or significantly improved product (good or service) or process, a new marketing method, or a new organisational method in business practices, workplace organisation, or external relations’.4 A common feature of innovation is that it must have been implemented which signifies that the idea needs to be converted to a product or a service required by the customer.4 According to Hamel, ‘A management innovation can be defined as a marked departure from traditional management principles, processes, practices, or a departure from customary organisational forms that significantly alters the way the work of management is performed. Simply put, management innovation changes how managers do what they do.”5 In this context, innovation can span across strategy to operation, and from product to process. Hansen and Birkinshaw have mentioned that the innovation value chain in an organisation comprises steps such as – Idea Generation, Conversion, and Diffusion.6

As per Ventresca, innovation needs to be viewed as a system building activity, comprising stages of invent, develop, innovate, transfer and consolidate, and grow and compete (IDITC).7 Govindarajan and Trimble have examined innovation from a holistic dimension beyond the realm of mere idea generation or a strong individual leadership. In this purview, innovation has been defined as ‘Innovation = Idea + Leader + Team + Plan’8

The definition of innovation by Freeman, and quoted by Afuah, is quite precise, concise, and specific from the perspective of desired outcome – ‘Innovation is the use of new knowledge to offer a new product or service that customers want. It is Invention + Commercialisation’.9

My book Monetising Innovaton perpends innovation from the perspective of business results and has defined it by the following simple equation referred to as the Innovation Equation10:

Innovation = Creation + Commercialisation + Business Result

So, what is perplexing here is, if Innovation is so simple to create and commercialize to invoke business results, why do the likes of Roman Empire and Pan Am World Airways fall from grace?

The reason lies what can be adverted as the Fox Dilemma….

A whack or two to innovate….a fox dilemma11

One of the Aesop’s Fables narrates the story about a contemptuous fox and a worldly cat.

During one of his sojourns to the neighborhood jungle, the cat happened to meet this fox, who was known for his artful exploits in many skills.

They exchanged pleasantries when they first met at a crossroad in the jungle, under the big banyan tree. They conversed for some time on the current scenario and challenges of living in the jungle, when the fox started swaying to boast of his clout. ‘You know’, the fox said, ‘I have mastered a few hundred problem-solving techniques. No matter what the danger is, I have a solution to come out of the problem’. ‘And’, he continued, ‘I have done this many times’. The cat was abashed, because he did not possess any of the fox’s skills. He mewed, ‘I am really feeling demeaned in front of you, the great fox…the only skill I have mastered is to climb trees’.

The fox burst out in laughter. At the same time, there was a clamour from the direction of the nearby village.  It was the sound of a pack of dogs from the village barking and galloping furiously at them. There was no time to think, except to save their lives.

The fox was at his wit’s end now. He was baffled at which one of his masteries he should use in this situation. However, the cat was very clear and started climbing up the big banyan tree and perched safely on a trunk high above the ground. While he was watching the happenings, the fox was still confused and was not able to judge the best technique to resort to. He was thinking and thinking, while the dogs were still charging briskly at him with  vengeance. It was now becoming too late for the fox; the doom was nearing with force. The dogs now charged together and bucked on the fox in no time, and gleefully earned the best prey of the day.

Unless equipped with a structured approach, the woe of driving innovation in a firm more often than not, starts right here. The ‘Fox Dilemma’ of being confused with too many options or the wrong option surfaces every time one contrives an initiative on innovation.

Professed by numerous researches and successful innovation examples, it is amply clear that business innovation doesn’t happen by chance. It imperatively calls for a structured approach, one crafted either by a conscious design, or that is underlying the visible layers of a company due to the way it works. According to Govindarajan and Trimble, “In all great innovation stories, the great idea is only Chapter 1.”12

At this point, a structured framework like ICaM (Innovation Capability Model) can act as an ameliorative for a business manager to drive innovation in a firm, following a pragmatic and structured approach with the use of optimum resources.

My book Monetising Innovation (Bloomsbury Publication) discusses the ICaM Framework with details of how it is deployed for result oriented Innovation.

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