Albert Einstein once said, “Innovation is not the product of logical thought, although the result is tied to logical structure.”
In the modern world, unless we are happy being a commodity, innovation is our main source of competitive advantage – doing things better, more quickly and more cost effectively than our competitors. So how do we gear ourselves up for innovation?
Organisations are ecosystems where everything impacts everything. Depending on where the organisation’s strategic direction, it will put together people, processes, technologies and information to get there.
If the goal is to compete using Innovation it needs to put the people, processes, technologies and information in place to ensure that it is better at innovating than its competitors.
There are many types of Innovation:
- Probably the best known and the start of most Innovation projects is Product Innovation – looking for new products for the market.
- Market Innovation refers to looking for new markets for existing products. A good example of this is blue ocean strategy where new uses and therefore new markets are found by tweaking existing products as SWATCH did when they repositioned their wristwatch as a fashion icon and started competing in the fashion market.
- Process Innovation is also popular, when organisations look for better or cheaper ways to do the same thing. It is here where companies often make the mistake of slapping Artificial Intelligence (AI) or Robotic Process Automation (RPA) on top of existing processes. The actual innovation comes from examining the processes and reengineering them for today’s environment and technologies;
- Business Model Innovation is when a company moves from one way of driving revenue to another. Organisations may move from a straightforward sale environment to a value-added service offering with annuity.
Modern innovation models include Management Innovation, where organisations have changed the way that they manage knowledge workers so that they get the most out of their creativity, knowledge, collaboration and Innovation skills. Employees become the capital assets which drive revenue.
When we create Innovation ecosystems, we need to configure our people, processes, technologies and information to achieve product, process, market, business model and management innovation that helps us leapfrog our competition and that requires logical thought and logical structure.
