What generates innovation?

by Masatoshi Matsuda – Senior Consultant, JMA Consultants Inc.

We often talk about innovation with many meanings, areas of reference and implications. Une of the main contexts in which innovation has a primaryrole is company operational, organizational, strategic management. A secondary context is the one of product/service.
They are not the only ones, of course, but these two aspects seem to be interesting  not just for us, as they crop up quite often in conversations with entrepreneurs and people in charge of the companies where we operate. We trust that the elements we are going to point out may be a good starting point for our readers, too.

Photo by Skye Studios on Unsplash

Why innovation does not generate itself even where human resources are not lacking?

When one talks about “innovation”, one refers to a vast range of definitions and images that in the end can be summarized as the “people” of an organization and the “ideas” created by the people that cooperate with it.  If the resources of the same organization prepare themselves by working hard on various experiences and have the opportunity to observe plenty of modus operandi [way of working] as well as seeing work examples every day, it is natural that that the creation of ideas gets fostered and these can aggregate along a specific direction. One could say that the same experience facilitates the birth of different attempts to organize and do things.

Therefore, why in companies that have many HRs, not necessarily things are managed to generate innovation? Directors or heads of organizations often say: “at our company there is no innovation”, but often the difficulty to innovate is not due to the lack of ideas, rather it depends from the fact that the strategic direction of the organization, or the focus and the end of innovation are not clear.

Innovation: why and how

What end should innovation pursue, first of all?

Let’s say that each party involved concentrates on obtaining a position of supremacy on the market and on competitors, on being able to differentiate one’s business on costs, or displaying superior development capabilities of products endowed with sales appeal. Upstream of all this, however, an extremely important issue is the acquisition of a mind share, that is the conquest of an (almost physical!) portion of the (customer’s, partner’s … ) thoughts.

Besides, I find that the most relevant perspectives is the “Neue Kombination” of Schumpeter, more often recalled as Creative destruction, but even a mere “change of perspective” allows in fact to create value by changing the point of view, which shows new room for proposals.

Thus, in some cases A and B could be elements combined to the development of a new technology or process solution, whereas in other cases it could happen that what is new comes along with a start from a precedent and a path forcing to assume a different view on that: what could make a product/service stronger, smaller, longer, quicker… etc. than the existing one? How to operate inverse transformations? etc…The two keys are applicable both in the field of business innovation, and in the case of product innovation, to reset roles and positions, as well as in the opening of new markets, or undertaking business agreements.

How to manage innovation

Even in the presence of successful innovations, the supremacy in the markets often does not last long due to the universalization of both information and technology. Innovation is short-lived and the constant maintenance of a leading position in continuously changing markets requires progressive innovation. I will distinguish this clarification with respect to the two categories of executives and employees.

Executives

  • Innovation Strategy = once a direction of innovation has been defined, one determines the life cycle and designs a range (of products). It is very important to illustrate precisely to employees the vision and the perimeter of innovation.
  • Innovation Management = company culture has a great influence on the reproduction of innovation. Everything is in seeing if one manages to develop innovation while keeping the capital of principles and thoughts inherited.

Employees

  • Genba Innovation = To give rise to elements of innovation it is necessary to let ideas “sprout” in every field.
  • Realize innovation= to sublimate ideas into business activities, the “creation phase” and the “realization phase” must be managed separately. The probability of success increases if as the organization grows also management becomes more specific relative to roles, composition of work groups, leadership, administrative and managerial resources, etc.

 

Leadership inspires innovation

Last but not least, what nourishes the innovation management? The willingness and leadership of company top executives. In order to ensure that the “what to do” is a precise input for employees and it fosters innovation, it is important to create a corporate culture which everyone can acknowledge, of which they feel like sharing values and experiences.

A culture guided and informed by the company managers often proves capable of overcoming structural evolutions, and even to forerun some changes of the times, with innovative and surprising outcomes.

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