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INTRODUCTION
What, in practical terms, does innovation look like? Where might we find it? Where should we try to arrange for it to happen?
From product to process and service;
and from operation to support
People are familiar with rapid product innovation in fields such as computers and pharmaceuticals - particularly where advanced technology is concerned. Where the 'product' is a service, customers may perceive innovation in other ways, for example in quality, reliability and price. Other prime targets for innovation are a company's markets, selling, distribution, advertising and promotion.
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PRODUCT BECOMES A SERVICE
For a construction company, the familiar building site 'portaloo' is bought as a service rather than as a manufactured product. The supplier takes it away at the end of the week, and replaces it with one that has been freshly cleaned and restocked.
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Innovation can apply to internal processes and systems. Firms need innovation in their management and operational processes. This means applying new techniques and ways of working that are more cost-efficient and effective in their use of resources, more streamlined, quicker to market, and quality enhancing.
From the familiar to the novel
Many of these target areas for innovation are not themselves new, though the need to innovate is becoming more pressing. However, beyond this level lies a new agenda and some completely new opportunities for innovation. The internet and the fast-developing world of e-commerce and e-business demand it.
So does today's socially aware business. There is a need here to be innovative in how an organisation relates to its social and ecological environment, and how it responds to consumer power. This is not just a case of reacting to pressure and changing expectations, it is also about how to gain competitive advantage by creating a reputation for socially responsible behaviour.
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SOCIAL INNOVATION
Large corporations and former pressure group adversaries such as Greenpeace are now forming partnerships. In these arrangements, the pressure group vets and certifies the company's behaviour as complying with society's social and environmental expectations.
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Human resource management
Innovative practice can have an impact on the kind of people that are employed, and on the way in which they are selected, developed, motivated and rewarded. Innovation can affect the full spectrum of human resource management policies and practices.
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ELECTRONIC PROCESSING OF JOB APPLICANTS
Applicants are asked to send in job applications electronically. A computer programme scans them for pre-determined criteria and composes a rejection letter for those not being shortlisted. It sends a response by e-mail to the applicant without any real person having vetted the application. While the computer could send the response instantaneously (while the sender is still logged in), the computer is programmed to delay the response by 24 hours to give the impression that a human hand is at work and that a person has read the application.
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Opportunities to be innovative extend outside the company to non-employees, to outsourced services, and to partners and allies within a network of relationships in the modern and the virtual organisation, and in all sectors: private, public and voluntary.
Innovative employment is the subject of much discussion and action. Organisations are flattening, roles replacing jobs, competencies replacing knowledge and skills, non-core work being outsourced, people working from home, short-term contracts replacing permanent ones.
Such HR innovation and changing employment practices have significance in their own right. But they also have a knock-on effect: they can have an impact - positive or negative - on the business's ability to be innovative in its marketplace. Without managing innovation positively at the basic level of how the organisation employs people, it is likely to be more difficult for the organisation to be innovative with its products and services.
Individual vs. organisational innovation
Creativity flows from individuals' ability. By contrast, innovation is a tangible outcome that benefits the business. Innovation depends on what surrounds individuals.
A popular starting point in many organisations is to look to individuals' recruitment and training to achieve innovation. Companies also increasingly rely on teamwork. But it is important not to neglect the organisation's culture and its management systems. These often block the path to innovation. If they are positive, they can license and foster innovation.
Agenda-specific innovation
How and where innovation will be manifested will vary with the particular kind of organisation, its opportunities and threats, its current agenda and where it is in its life-cycle. While most firms can be more active across the full range of innovation opportunities, in practice they need to consider carefully the various targets for innovation as part of a well-planned business strategy.
Pinning the term down
Given such wide potential application, innovation is quite a problematic term, not easily tied down. It signifies a broad concept generally associated with ideas and change. But it means different things depending on people's jobs, the nature of the business, and what the organisation is currently needing.
Innovation for a high-technology start-up operation means something very different from an ageing state monopoly looking for a new lease of life. The former may need to be innovative in finding sources of funding; the latter in how it dismantles the legacy of the past before it can move forward.
Innovation is an umbrella term covering a wide spectrum of activity. Breaking it down we may find that an organisation's particular needs are to develop a new range of products, or to bridge the gulf between its creative/ideas people and its innovative/application people. Innovation may target products, marketing, distribution, advertising, promotion, production, employment practices, business partners, structure, work environment, annual reporting, and so on. The innovation agenda may be either outwardly focused on business factors (markets, customers, price, etc.), or inwardly directed at organisational factors (employees, production, structure, etc.).
In summary, some people equate innovation in their minds solely with technological change, the design of new products, or mere invention. But innovation is all of these, and much more, as the above shows. When other people start talking about innovation, make sure you are speaking the same language.
© William Tate, Prometheus Consulting, 2003
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