Innovations

The process of translating an idea or invention into a good or service that creates value or for which customers will pay is called innovation. Innovation involves the deliberate application of information, imagination, and initiative to derive greater or different value from resources. It includes all processes through which new ideas are generated and converted into useful products. In business, innovation often occurs when ideas are applied by a company to further satisfy the needs and expectations of its customers.

The term innovation process refers to the steps involved in generating, exploiting, and applying new ideas. This process is not linear, nor is there a single defined approach. The steps generally include:

1. Coming up with the idea.
2. Choosing and developing the idea.
3. Researching, developing, and testing.
4. Marketing the product or service based on the idea.
5. Observing the product or service being used or adopted by others.

Innovation requires collaboration, ideation, implementation, and value creation.

There are three levels of innovation, and the level you choose will dictate the simplicity or complexity of the journey you undertake. The three levels are:

1. Incremental Innovation: This involves small but meaningful improvements in products, services, and the ways you do business. These are the "new and improved" innovations we encounter every day, such as new flavors or minor enhancements.
2. Breakthrough Innovation: This represents a significant change in the way you do business, offering consumers something demonstrably new (beyond "new and improved").
3. Transformational Innovation: This often involves the introduction of a technology that creates a new industry and fundamentally transforms the way we live and work. This type of innovation may eliminate existing industries or completely transform them.

Successful innovation efforts are built on four key elements:

1. Strategy. The company must establish clear parameters, with the CEO setting objectives for the organization to achieve. Innovation is NOT an ad hoc process. Having an innovation strategy helps guide the organization’s ideation process, ensuring that ideas with potential are pursued while others are ignored.
2. Structure. Innovative ideas can come from anywhere in a company—whether it’s the mailroom, the warehouse, or the person answering phones at the front desk. Innovation efforts should not be isolated to a specific team or individual. Collaboration is key to a healthy innovation process and is essential for generating game-changing ideas. Encourage interaction between employees and loosen formal controls to ignite innovation in your company.
3. Skills. Collaboration happens among people who are open to it and who are effective communicators. The ability to take a small idea and explore its various sides or opportunities is a skill that needs to be nurtured. Identify employees who think outside the box and possess a broad business perspective. Put them in a room together, and see what happens.
4. Process. A structured process is essential for managing ideas from concept to implementation. Many companies struggle with innovation due to the absence of a defined process. The three basic components of an innovation process are: ideation, development, and implementation. Discipline in these areas is necessary to ensure great ideas don’t fall through the cracks and are brought to fruition.

Great innovation starts with effort and is the result of a committed process within an organization. There is no better time to start than now.