Innovate in all parts of the organisation or be beaten


First of all we have to understand what is a competitive advantage? And this concept refers to "a set of factors or capabilities that allows firms to consistently outperform their rivals" (ROBERTS, 2002). This advantage is created when new and better ways to compete in a sector are perceived and they are translated to the market environment (this is known as the process of innovation). In the organisational context, innovation may be linked to performance and growth through improvements in efficiency, productivity, quality, competitive positioning, market share, etc. All organisations can innovate, including for example hospitals, universities, and local governments.

Innovation nowadays has become an important issue for an organization to ensure the leading position of their products in the market. Consider the success story of Nokia... one of the first companies to enter the market for cell phone handsets, now has become the undisputed market leader through its high quality and wide product range, in various countries. Instead of relying on importing products with proven technologies in western markets, it carried out extensive study of its customers, got close interaction with them and developed products based on customer insight. Statistic shows that Nokia's global device market share increased from 32% in Q1 2009 up to 33% in Q1 2010. (Nokia, 2010)

2.0 Significance of Innovation & Innovative Thinking to Organizations

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Today due to increasing competition and accelerated products and service development cycles, innovation factor is now taking the driver seat and playing crucial role in any corporate success. As per the research conducted by Forbes, Ernst & Young and the Wharton School of Business have found innovation to be the important value of any corporate either durable or non-durable companies. In fact results also show that half of the profit of most of the Giant companies of world comes from products launched in last 10 years.

In every industry, the leading companies are the innovators. However the cadre of

innovators keeps changing. For example, Thomas J. Peters and Robert Waterman

(1982) cited that companies like Amdahl, Texas Instruments, Eastman Kodak, and

Maytag as exemplars in their business classic, In Search of Excellence. They achieved

that stage by extensive innovation and market presence for years. Meanwhile, today's innovators such as Wal-Mart (chain of retail shops), Southwest Airlines (good service for low fare), eBay (online auctions), and the University of

Phoenix (degree programs for working adults) are themselves relative newcomers.

Such high turnover at the top suggests that the real problem is not with the lack of innovation, but it is 'Sustained Innovation'.

So now, main concern of any company's management strategy is to encourage innovation through different channel of their company and especially from R&D. We use "innovation" to mean technological change. We are concerned with technological change resulting in practical implementation or commercialization, not just idea generation. This section addresses the importance of technological innovation to today's competitive economy and polity.

Today's worldwide economy depends on technology and technological innovation to an extraordinary degree:

American companies spend over $100 billion annually on R&D; for another data point, the Organisation for Economic Cooperation and Development (OECD) countries spent over $550 billion in 1999 (about 70% by companies, 30% by government).* That research pays off- participating companies in the U.S. Industrial Research Institute estimate average new sales ratio- the percentage of sales attributable to products newly designed in the past five years- at roughly 35%. In other words, $1 of every $3 in their revenue comes from recent innovations.

National economies depend critically on technology. "High-Tech Indicators" ( show that the U.S. once dominated technology-based export competition. Then Japan raced up to become a staunch competitor. Now, other countries are advancing dramatically. Tiny Singapore now exports technology-based products at the level of the European powers. China is advancing dramatically in technology-based exports, but also in R&D that will drive future generations of products and services. And they are not the only ones looking ahead. The 371 expert panellists anticipate that, in another 15 years, essentially all of the 33 countries tracked will be significant high-tech competitors (Fig. 1-1). (Porter, 2004)

Research has indicated that competition combined with strong demand is a major driver of innovation. Intensity of competition is the determinant of innovation and productivity. Innovation, besides products and services, also includes new processes, new business systems and new methods of management, which have a significant impact on productivity and growth.

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Today, we need innovators more than any time before. Every organization and business is feeling the impact of globalization, migration, technological and knowledge revolutions, and climate change issues. Innovation will bring added value and widen the employment base. Innovation is imperative if the quality of life in these trying circumstances is to improve. Innovation will make the world a better place for the younger generation.

3.0 Measures & Recommendation for Enhanced Innovation

What Does Innovation Mean? While it is critical to have good program launch capability, it is equally important to be able to identify the right products to launch and to foster an environment of innovation that keeps a company out of the commodity trap. Why, for example, did the New Domestics get into the large-scale production of crossover vehicles so much earlier than the Big Three? We would argue that they are much clearer about their overall strategic intent and that, at least in this instance; they did a much better job of predicting future product trends. They also took a lot of existing concepts and combined them to accelerate the development of this new product segment.

An indispensable ground to start any business is to make profit and growth of revenue over time and innovation is the central subject in economic prosperity. Businesses, whether dealing products or services, are facing transformation like never before. Introduction of new or improved product decides the fate of any company these days. Innovation is the successful introduction of specific novel and useful things. It typically resides in the lap of creative ideas, but is not identical to it. Innovation involves acting on those creative ideas to make some specific and substantial differences in the sphere in which the innovation has been done.

However, just coming up with something that is 'out-of-the box' doesn't mean that it will always work, because, the thing that is required more than just the generation of a creative idea is to put that thought into a process of action to make a visible difference to the product or service that is considered to be innovated. Hence innovation typically involves risk. A key challenge in it is maintaining a specific balance between the process and product. According to this viewpoint, creativity can be typically considered as the basis for innovation, and innovation as the successful implementation of creative base into a tangible product or an intangible service. Innovation can be easily distinguished from invention. As Invention is the conversion of cash into ideas and Innovation is the conversion of ideas into cash.

Innovation can be viewed well in the context of businesses. As every organization has a unique stance to face any challenge or adopt any modernization and this viewpoint differentiates one organization from the other. The success or failure story of any business depends largely on how well a system or culture is managed within an organization. This 'innovative culture' can often be the difference between a 'successful' and a 'not-so-successful' organization. An organization with a well managed innovative culture almost always expands more rapidly than an organization without this understanding.

In its most basic form, the concept of innovation is hard to define. In an engineering- and technology-driven industry like auto, the temptation is to assume that innovation relates specifically to the product. While new product innovation is critical (e.g. crossover vehicles), there are many other aspects of innovation that are equally important. To help illustrate this point, we identified four types of innovation: Products and Services; Manufacturing Processes; Materials; Business Practices.


Opportunities For Innovation

Examples of Successful Innovation

Product and Services



Technology (R&D)



Adjustable pedals

Electro chromic mirrors


Tire pressure monitors

Fold-flat seats

Manufacturing Processes



Hydro forming

Fine blanking

Laser welding

Digital prototyping




Powder metal

Quiet steel

Nano structure plastics

Business Practices

Management practices

Business design

Lean enterprise

Customer relationship management

Strategic alliances

Corporate development

Value chain realignment

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Table 1 : Different Dimensions of Innovation (Kim Korth, 2010)

Increasingly, companies are establishing innovation networks - made up of offshore suppliers, distributors, customers, freelance scientists, government and university researchers and even competitors. For many firms, this means that some of the R&D role is performed offshore. For example, more than 100 global companies including GE, IBM and Intel have established R&D centres in India during the past five years, and more are in the works. Boeing is co-developing navigation software with offshore technology providers in India. The Eli Lilly subsidiary InnoCentive is working with a number of major pharmaceutical firms to find scientists in Asia, Russia, and the EU with solutions that can reduce the high cost and time it takes to bring new drugs to market (Randall, 2005)

On the other hand, include everyone from the highest levels of the company to the lowest also one of the important point to achieve growth through innovation. Often the most innovative ideas are submitted by junior employees. Apart from that, Accenture's research found a direct correlation between the level of successful innovation within companies and the presence of a chief innovation officer (or an executive who has innovation as a major part of his/her job responsibility). Companies designating one executive to be accountable and leading innovation execution report dramatically higher satisfaction levels across all aspects of their innovation performance. This performance includes developing a product or service pipeline of initiatives and extracting value from innovation programs. Having an executive in this role creates a more focused, continuous process for improving corporate innovation. Companies that don't have such executives tend to be less skilled and lower performing in innovation.

Appointing a chief innovation officer isn't enough. Too often, companies have appointed someone to lead the innovation charge only to run up against the crippling "who owns the budget?" problem. A dedicated budget is a vital component of successful innovation. But there does need to be an adequate level of resources to fund the innovation infrastructure.

4.0 Conclusion

Innovate in all parts of the organisation or be beaten - even looking at reducing the overheads of an organization can make all the difference to competition. Innovation is about doing something that has not been done before and provides potentially more profitable opportunities to create a temporary competitive advantage. However, competitors are likely to respond with their own innovations, so a strategy of innovation needs to be continuing. (, 2010)

Management of an organisation also act as a very important role because it is the basic of a company culture and formulates strategy. Strategy should address the management's commitment to innovation, provide direction and coaching in innovation, build an innovation capable organization which is flexible, and controlled by the results of innovation.