“Innovation is change that unlocks new value.” (Jamie Notter)
Innovation – how is it described? Many have defined innovation as - change, alteration, revolution, upheaval, transformation, metamorphosis, unconventionality, modernization; a break from tradition and a change of direction.1
The term has been referenced and used more so than ever before, with many seeing innovation as the only solution to promote long term growth and development. The world is changing at an astonishing rate and in order to ensure businesses remain relevant, innovation can no longer be ignored. With the emergence of new technology, the ways in which we interact with each other, the world and organizations continues to change – thus we must too.
We haven’t just seen innovation being introduced into product led organizations but in other sectors too. Let’s take the UAE as an example, where the government has introduced various measures to innovate the public sector and thus promoting a shift to ‘doing things differently’. This has seen the introduction of a ‘smart government’ and the innovation strategy being launched to further promote entrepreneurial spirit and development within the Emirate.
Innovation is much more than developing new ways of working and new products. It has a much wider impact, resulting in enhanced employee engagement as a result of the challenge, improved process measures promoting efficiency and if you get it right, it goes some way to impacting the bottom line significantly. Companies who are highly effective in the early stages of innovation reported that they outperformed on revenue growth, market cap growth and earnings as a percentage of revenue.
The innovation value chain allows organizations to spot the strengths and weaknesses and introduce an integrated flow when embarking on innovation as introduced in the Harvard Business Review2. Hansen states “to improve innovation, executives need to view the process of transforming ideas into commercial outputs as an integrated flow—rather like Michael Porter’s value chain for transforming raw materials into finished goods2.”
As a result of such development, the role of innovation is changing. It is rapidly changing from ‘nice to have’ to ‘must have’. Innovation needs to be effectively managed both internally and externally, to meritoriously take place organizations should promote knowledge management as a key focus – as without this innovation becomes difficult, if not impossible to achieve. Boards should embrace and encourage the notion of innovative thinking within corporations to ensure that products/services aren’t just developed but done so with excellence to promote long term growth.
“We are living in times where the rapid turnover of ideas and products in the marketplace has reached a stage where it is no longer enough to be just the best. Instead, the pursuit of excellence and the search for excellence are the hallmarks of a truly successful and world class organization and hence all companies must undertake efforts to drive innovation and change3.”
“Innovate or stagnate.” (HH Mohammed bin Rashid Al Maktoum)