The Challenges Of Innovation Within The Organization Commerce Essay

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Innovation is a process by which an idea or invention is convert into good or services for which people will pay to obtain. Innovation involves deliberate application of information, imagination, and initiative in deriving greater or different value from resources and convert it into a new and useful product. All the businesses today are obsessed with innovation. Companies operating in expending market are always looking for something that will enable them to sustain their continuous grow. The others companies which are operating in a difficult or volatile market must find a way to improve or maintain their market share by coming out with new ideas. Most of industries pray to find the next big thing in the expectation that they can deliver it to the market a little bit quicker than anyone else. [1] (Adam Jolly, 2002)

The five most innovative companies in the world in 2009 are Apple, Google, Toyota motors, Microsoft and Nintendo. Apple the world leader in innovation is always coming out with new products or totally different from those of the concurrent. Some of their products are event totally new product like their latest product the iPad released in US the 3rd of April 2010. This company by doing this is creating new market segment where there is no competition and therefore remain the leader in that segment. By bringing out exciting, new products by combining integrated offerings (hardware, software, and content) excellent design and strong marketing. Apple shows today that it has the ability to change market dynamics and gain significant market share with new-product offerings (Businessweek website, 2010 [2] ).

The challenges of innovation within an organization

Moving from the stage of idea to the stage of execution (production) is the place where most of companies failed. The new idea must be developed and produced by the company in order for them to have what they really want rather than leaving the actual development and production to someone else and then profess to be surprised when the finished product is not exactly what they had envisaged. The procedure needs to be replicable and easily understood internally so that the company can train new hires to execute it. Most of companies, just about all the cards are stacked against the nurturing of innovation, especially the kinds of new ideas and disruptive innovations that generally lead to major changes in the marketplace and within the business. Some of the challenges that are recurrent in innovation are behaviours and it comes from inside the organization:

Indifference and poor leadership: While about every CEO and senior executive of companies pays lip service to innovation, many do not really mean it. They said it would be politically incorrect not to embrace innovation but they do little beyond that. It is not because theses managers are not good or they don't have the competences but the thing is the majority of executives make it to top positions by being very good operational managers by improving products and services to keep up with competitors, meeting sales objectives, supporting existing customers and acquiring new ones, achieving the required financial results quarter after quarter, managing mergers and acquisitions, and so on. Being a good manager is takes a very hard work they must pay attention to detail and organizational discipline but there are some others skills that they need in order to do their job well. They need to shift from being a manager to being a leader in the organization. Management is all about the business results and processes. Leadership is about people. One of the key quality that a manager need in order to be a good leader is passion by taking the urgency to attack and solve the complex problems that the organization is facing. To do so, the manager need to be surrounded by highly talented people, and he need to find a way to transmit his passion to them, so they will buy into the vision of the future he has, by performing at the highest possible levels, and come up with innovative solutions to the challenges of achieving the vision.(Businessweek website) [3] 

Hostility: some companies go beyond indifference. Their initial reaction to any new idea is negative, if not downright hostile. This is particularly true if the idea comes from someone outside their own organization. Individuals and organizations are often resistant to change. Resistance to change is common within human beings. People are scared of the unknown. People think that things are always perfect and do not understand the need for the change. . (Thomas G. Cummings & Christopher G. Worley 2008) [4] They tend to be poor team players Collaborative innovation is not for them. This type of hostile behaviour is hugely detrimental to a healthy innovation environment in the organization. People supporting new ideas, especially if they are potentially disturbing new ideas, are going against what the business is currently doing. Rejection is painful when is coming from people in positions of authority. Senior managers can take care of those new ideas through positive words and actions, or they can stop them on their tracks by being terribly negative and combative.

Isolation: Collaboration is important in order to have innovation in an organization. It helps by providing emotional support and the energy that new ideas need in their very early stages. New ideas are almost always irregular and ill-formed at first. Experience had shown that nothing works better than bouncing ideas off other supportive people. This from side to side dialog is vital in helping to form the idea into something more concrete, comprehensible, and actionable. Then it is more ready to face the tougher challenges and criticisms from the management and others person in the organization.(Innovation-point website [5] ) That is why isolating people in organizational (silos) is one of the biggest obstacles to innovation. Companies that are really caring about innovation do everything possible to break down this isolation and make sure that communication and collaboration are effective within the organization and beyond. Promotion of innovation is very tough, particularly if the innovation is disruptive in nature. The innovation and collaboration spirit does not come naturally to an organization. In order for such a spirit to take place in an organization, it must become an integral part of the company's culture. None of this is easy, but it is what a company must do if they truly want to create a healthy environment in which it will be suitable for innovation to take place. (Tom Peter, January 2009) [6] 

Obstacles to innovation

Many companies would like to be innovative but there are some realities that they have to face. The main obstacles to innovation that we have identified can be listed as:

High cost: the research and development (R&D) is costly for companies because they must have his own laboratory and researchers in order to develop new products. Therefore the need of a research and development department in the organization and the wages of all the persons who will be working in that department is also another factor that discourages many companies. In industries such as high-technology and pharmaceuticals, R&D spending is quite high, because products are outdated or attract competition quickly. In the pharmaceutical industry of the United States, the development phase can cost between $10 to $200 million and approximately one in ten compounds identified by basic research pass all development phases and reach market.(Tripatlas website) [7] 

Lack of qualified personnel: there is a need of competent and skilful person in an organization so that they will help in order to come out with new product or process this lack of qualified workers is forcing the U.S. companies for example to postpone new research projects. Two-thirds of information technology companies surveyed recently said the shortage of high-skilled workers is a barrier to their future growth.(Cato website [8] ) We can say that find the right people for the right place is a challenge for all the organization today. This is why US today encourage High-skilled immigrants to come into the country to resolve this lack of qualified people that the country is facing.

Access to knowledge and technologies: is crucial to all company which need to go into the process of developing new products. This is common for the companies operating in the developing and third world countries. Most of these countries today when ever a company want to establish in their country, the government impose them to make a transfer of technologies so that they could also produce or develop the same type of product. This is what happens with the European plane maker airbus with the first Airbus final assembly line to operate outside of Europe, located in Tianjin, officially opened on September 2008. This production site for airbus A320 Family aircraft is a joint venture between Airbus and a Chinese consortium of Tianjin Free Trade Zone and China Aviation Industry Corporation.(Airbus website,2010) [9] 

The risk factor: many companies don't want to invest a lot in research and development because there is a risk and they know it that some projects will succeed while others will fail. At the end of the day, a company wants to attract and hold investors by given them a return on investment. The return on investment in research and development is not fast and some time they could lose their outlay entirely. R&D always carries an element of risk because it involves trying out new, untried ideas. Another type of risk could be new or modified products and services which tend to be more difficult or costly to develop than anticipated; the development of a product or service that isn't commercially successful; the development of a product that turns out to be impractical for the customers.(Businesslink website 2010) [10] 

Successful innovation strategy

Successful innovation is a relevant problem for firms and policy makers equally. Successful innovation is the foundation of competitive advantage, not only in the high-tech industries, but also in the more traditional and growing industries. Successful innovation is also a precondition for technological change, growth and industrial revitalization. The determinants of successful innovation are thus of particular relevance, since they should be taken into account in the design of specific policy measures, as well as for the selection of innovation development projects with a higher success rate. The characteristics of successful innovation are also important from an innovation management viewpoint, as firms are confronted with different trade-offs between the different modes and organization of their innovative activities, the different nature of innovations and their success. (Christopher Palmberg, 2002) [11] Success is usually defined by commercial criteria at the firm level, with an increasing market shares, productivity growth, or profitability are taken as indicators of success and. Another way of measuring innovation success in an organization is when we look at how individual development projects had succeeded or innovations. In this vast and ever-growing literature successful innovation is defined in different dimensions, ranging from the technical novelty, commercial success, or commercialization and break-even times of innovations. The best example we can take to show the success of a company due to it innovation strategy is apple. We have identified various fields on which apple have control and this help them to achieve their innovation strategy in another word their success story.

Apple use a very reduce team to designs their major products. When we look at Jonathan Ive and his team of a dozen to 20 designers who are the brains behind the genius products that Apple has delivered to the market since the iMac back in 1998 until the Ipad today. New product development is not farmed out across the organization, but instead is creatively driven by this select group of first-class designers. Different companies have different strategies in term of implementing team work as an innovation hand in the organization. Steven Jobs (CEO of Apple corp.) himself has delegated away many of his daily operational responsibilities in order to focus half of his week on the high and very low level development efforts for specific products. By directing the research in all innovation products, Steven Jobs show that he is a leader and the employee within Apple Corporation by transmitting his passion to them and they are all participating to build the vision of the future he has.(Pragmaticmarketing website, 2010) [12] 

Apple owns their entire system. This company is completely independent they don't rely on anyone else to provide inputs to the design and development of their products. They own the Operating System, they own their software, and they own their hardware in another word they own their own technology. None of his competitors or the other electronics manufacturers' organization can easily do what Apple does because they have all of the knowledge and control the intimate interactions that ultimately become the total user experience. There is no other way to ensure such a faultless experience a single executive calls the final shots for every single component.

Apple focuses on a select group of products. Apple acts like a small shop and develops imaginative and good looking products in a manner that makes it very difficult to scale up to broad and extensive product lines. This is mainly due to the level of attention to detail provided by their small teams of designers and engineers. To think that a multi-billion dollar company only has 30 major products is astounding, because their neighbors at that level of revenues have thousands of products in hundreds of different countries. As Jobs explains, this is the focus that enables them to bring such an extensive level of attention to excellence to any of their product.(Uxmanagement website, 2010) [13] 

Apple has a maniacal focus on perfection. They say Jobs had the marble for the floor at the New York Apple store shipped to California first so he could examine the veins. He also complained about the chamfer radius on the plastic case of an early prototype of the Macintosh. You had better believe, given the 10 to 3 to 1 approach for design, that every shadow, every pixel is scrutinized. It's in their DNA to always look at the faultlessness for a product. They are willing to spend the money to make sure everything is perfect, because that is their mission.


In order for an organization to successfully manage its innovation it need to take into consideration some aspect in the organization these are the steps to achieve it.

Define the Desired Future State: the management must come together to develop and communicate what they want their organization to look like in the future. In this design stage of an innovation initiative, senior managers must challenge themselves and each other to do more than attempt incremental improvements. It's relatively easy for senior management to identify issues and challenges in the current state and then define the future state as one in which they have overcome those existing problems.

Continue to Build Alignment: After collaborating to define the desired future state, senior management must design and prioritize the strategic initiatives that will lead the organization to achieve the newly defined future state. These strategic initiatives are derived from the two or three key strategic objectives that must be achieved to move the vision forward. The first step can consist in defining how the organization will achieve its vision and future state.

Integrate the Strategic Initiatives: A key aspect of building support and integrating the strategic initiatives includes a method of evaluation of the business units, sub-units and individual employees on how well they support and help drive progress towards strategic goals. As a result, management teams at high-performing organizations frequently choose to design and implement a business model which helps them to achieve a strategic alignment. (Jim Snare, May 2009) [14] 

Plan and Perform Ongoing Change Management Activities: Institutional disinterest can slowly kill innovative ideas and initiatives. One of the key aspects of building and implementing an innovative business model is by ensuring that extra efforts are put into planning, creating and rolling-out the strategic activities, communications and training plans. These are required to support the overall innovation initiative.

Even though the executive team or board of directors of a company may not be made up of innovators, they can make the smart business choice by insisting on a culture of innovation and support a strategic plan to cultivate it within the organization. The recruitment of skillful and talented person is the oxygen of innovation; find people whose job it is to stay ahead of the curve, develop prototypes and connect future dots. The leading group should be a cross-disciplined team protected from the critical glare of the rest of the company, at least in the early stages. (Jeff James, February 2008) [15]