Business Innovation and Entrepreneurship

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Business Innovation and Entrepreneurship

INTRODUCTION

Every innovation starts with an idea that aims to make an existing process or product better, to improve the original design or to cater to different needs. Creative idea is the foundation for innovation. But what comprises an excellent idea? How does a person in power able to differentiate an idea that is only good in theory and those that actually answers real-world demands.

In order for a business to be successful, they need to realize the ever changing demands of the modern world. It is no longer enough to stay plain and original. Every business needs to cope with these changes which are the usual drivers for innovation. The responsibility lies with the management’s ability to identify opportunities through these changes. They also need to set a clear vision on what the company wants to achieve and how they want to achieve it. This as the guiding principle will enable them to match the right ideas to what is relevant in reality.

The focus of this paper is to discuss important analytical tools used to recognize ideas that could lead to innovation of processes. It also discusses the criteria used to deduce which ideas are suitable and feasible for the organization.

  1. LATERAL THINKING

There are two methods of thinking, Vertical Thinking and Lateral Thinking. Vertical thinking uses logic and traditional methods while Lateral Thinking avoids any common sequence and creates solution through a different point of view. In business, Lateral thinking is more encouraged when making decisions and coming up with ideas geared towards innovation in the organization.

Lateral Thinking’s simplest definition is the ability to think outside of the box. This term was first coined by Dr. Edward de Bono in 1970. It describes the manner of solving problems through different perspectives. It encourages leaving the obvious and common, and being open to the change of concepts and perceptions. Dr. Bono described Lateral thinking as being concerned not with the existing factors but in changing what already exists.

It is common to find solutions through usual and predictable ways especially if the current ways still work, but the use of Lateral thinking provides a better and wider scope of opportunities to innovate. That is why lateral thinking is a very important criterion when identifying ideas to cultivate for an organization.

  1. VISIONING

Visioning is the process of forming mental image of the desired future to serve as motivators for the present action. It pictures the success of a goal achieved on a specific time, it does not dwell on the present but on the future and for long term.

The ability to visualize is a very important characteristic of a leader. It is important for a leader to have a wide imagination that will enable them to set goals, set plans and anticipates possible risks and problems that they might encounter, as they venture through the realization of their goal as a company. The company’s vision is the clear guide for choosing the course of action; every decision should answer to what the company’s vision is aiming for. It is the leader’s responsibility to be the driver and make sure that the organization is functioning with one goal in mind.

Visioning affects cultivation of innovation because when people have a clear idea of what they want and the success ahead, creative ideas flow more freely which benefits the whole organization. The key is to think ahead and see how an idea will affect the whole organization for the long term.

  1. PROBLEM SOLVING TECHNIQUES

Having the idea and a guiding vision is not the end of the Innovative cycle. An organization needs to be equipped for any hindrance towards getting their goal. It is essential to have the ability to analyze a problem and find ways to solve them without sacrificing quality or integrity of work.

Different people have different ways of dealing with difficulties. In business, it is important to be objective when dealing with problems and interruptions. That is why it is important for leaders and management to be aware of the different problem solving techniques that can be utilized when faced with such circumstances.

Problem solving techniques are steps that can be used to identify the problems that are hindering the goal. The steps include acknowledging that a problem is present, defining what the problem is, planning a fix to the problem, identifying the resources available to be used, monitoring the progress and appraising the efficiency of the solution. These are the basic and simplest approach a person can follow.

There are more detailed strategies that can be used by bigger companies when dealing with difficult problems. Some of the more commonly used are Kepner-Tregoe Problem Solving, Six Sigma, Root Cause Analysis, Fishbon and TQM.

Kepner Tregoe Problem Solving. This approach dwells with setting the objective, finding different options, weighing the pros and cons and choosing the best answer. This approach limits the biased decisions as much as possible. The four basic steps are Situational Appraisal, Problem Analysis, Decision Analysis and Potential Problem Analysis.

Six Sigma Tools. This approach is very systematic and strategic. It follows the DMAIC model and focus on root causes to process problems. The end goal of Six Sigma is to have quality improvements and improved standard of process or product. It also focus on savings gained through the project.

5 Whys or Root Cause Analysis. This approach is quite subjective and dependent on whoever is analyzing the problem. It is simple but proven effective when finding the root cause of a problem. The 5 Whys steps are straight forward and starts with asking “why?” to the problem, once an answer has been given, the next “why?” will be asked until a root cause can be identified.

Fishbone Diagram. This is another known tool used for finding root cause with the goal to correct the actions. This approach is also known as Cause and Effect diagram or Ishikawa. It groups causes into different categories with the causes cascading from the main categories that forms what looks as a fishbone, hence the name.

TQM Tools. This approach is more robust in a way that it requires involvement of the whole organization for their implementation. The goal of this approach is to build quality process. Some common TQM practices are Process Management, Customer Involvement, Strategic Planning etc.

  1. ANALYTICAL TOOLS
  1. SWOT ANALYSIS

SWOT Analysis is an analytical method which utilizes techniques that centres on the strengths and weaknesses. SWOT stands for Strength, Weakness, Opportunity, and Threat. This technique deals with the positive and negative of both internal and external factors. The idea is to cover the full scope of the problem and to assess all possibilities.

This technique can be applied at any stage of the innovative cycle. It is used to discover new opportunities or answers to problems to existing processes or products. It is also used to narrow done possibilities and to arrive to the best way to solve the problem. The technique is also helpful when reviewing plans mid-course, this can result to discovering new opportunities while still on the process and can also lead to discovering imperfections on the current plans.

SWOT is a proven effective technique for discovering new opportunities in business. Since it deals with all the facets of the business, the data is accurate and provides a strong foundation for coming up with a reliable action plan. The strength of this technique makes it a very important tool for Project Management.

  1. PESTLE ANALYSIS

Pestle Analysis is another tool used for Business Analysis. Pestle stands for Political, Economic, Social, Technological, Legal and Environmental. This technique dwells mainly on the external factors which contribute to the success and failure of the plan. It provides different angles by looking closely in the environment where the business operates.

This method is an important tool for strategic management because it looks closely on the environmental factors that affect the organization as whole. There are more opportunities for ideas that could improve current methods or processes since it analyzes a broader range. At the same time, by looking into the external factors it will be easier to track what among the existing products, service or process are no longer working or outdated. It is important for an organization to do this to stay relevant.

  1. COST-BENEFIT ANALYSIS

Cost Benefit analysis is another technique used which assess the benefits and associated costs to arrive in a decision. It usually runs over a given period of time and data gathered are used as basis for analyzing which path to take.

This method involves these basic principles; Project appraisal, incorporating external factors in analysis, and Time bound. Using cost benefit analysis usually takes time since it must complete the set course in order to gather enough and reliable data.

This type of analysis depends on finding and adding all the positive factors which is the Benefits part. Then the same steps are taken to find and add the negative factors, which are the Costs. The difference will dictate whether the plan will suit and generate positive impact to the organization. This technique can be used in any aspects but commonly used for problems with monetary involvement and thus cost will play as a big factor.

  1. DECISION MAKING PROCESSES AND STYLE ANALYSIS

Decision making is the process of making a choice out of all the available options. An effective decision making, foresees the results of each available option, be able to weigh the positive and negative and conclude objectively the best choice.

Different analytical tools and techniques meant to aid the decision making process. It is best to decide decisions with facts from research and statistics, these serve as proof that points are well thought and possibilities are thoroughly explored.

Decision making process follows these steps:

  1. Definition of the problem
  2. Identifying limits
  3. Exploring alternatives
  4. Analysis of alternatives
  5. Selection
  6. Implementation
  7. Establish control
  8. Evaluation

Different people have different ways of making decisions. Decision making involves different styles and success is dependent on how well the organization adapts and embrace it. Here are some of the commonly known styles exercised by different leaders from different companies.

Decision making can be Directive. In this style, the leader has the sole responsibility in making the decision. It is assumed that the one in power has the best knowledge of the problem and can provide the best solution in behalf of the whole organization.

Next style is Analytical. This style still highly involves the leader but supporting information from the team is needed to back up the decision.

Conceptual style is a style where the leader involves the whole team in making concepts of each option and takes higher risks. They brainstorm together and share different inputs and tackling the problem before arriving into a conclusion.

Another style is Delegation. In this style, the responsibility to make the decision is given to a group and not necessarily to the leader alone. The leader acts as a guide and decisions are based on what the group arrived at on consensus.

  1. IDEAL CHANGE MODEL

IDEAL change model stands for Initiating, Diagnosing, Establishing, Acting and Learning. This model was devised to be guide when planning for any change. It has been successful and can be applied for both small and big organizations and proven to be effective in dealing with different types of challenges.

This model is essential when coming up with innovations because of how the method works. It aims to continuous improvement and at the same time reduce defects that are commonly overlooked when implementing something new. The last step, learning, is especially important for this model because it encourages continuity and evaluation that there is significant improvement brought by the change. This also pushes leaders to provide ongoing management.

CONCLUSION

Competition in the modern world of business is constantly changing. It is no longer enough to have good product and services, they are still on the top of the company’s priority, but it is no longer sufficient. Creative and Innovative ideas are constantly needed in order to make sure your company is not left behind. The use of different methods and techniques to analyze these ideas are essential for companies because it provides them solid and tested proof on how effective the ideas are, once applied to the marketplace.

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