Vy Nguyen | 19 Mar 2019
Innovation gives birth to new products, services, processes, methods of management and business systems. Innovation is essential to every business in today's world where we need to constantly make changes in other to compete with other businesses. It is not only a matter of productivity and competitiveness, it is also about adding values to what we offer and improve our people's everyday life.
Introduction to innovation
Innovation is important to organizations of all shapes and sizes. Needless to say, innovation is by far the most important key to the success of a startup. By definition, an entrepreneur is someone who detects a problem and is willing to solve that problem through innovations. Therefore the success of a startup comes from the ability of its entrepreneur to:
Invention vs Innovation
Innovation is taking an old product or technique and refines them into a new and usable one. An invention is called an innovation if and only if the organization, which invented it, manages to bring their invention to the market. The process of turning an invention into an innovation is called innovation management. Maital and Seshadri (2012) also refer innovation as new and better ways of creating value for customers by adding creativity to every part of an organization’s value chain. Maital and Seshadri (2012) explain that the goal of always innovating within an organization is to maintain its competitive advantage “Sustained competitive advantage necessarily requires sustained innovation”. Lee and Trimi (2018) added that innovation is about implementing new ideas or technologies to create new value in different ways than in the past. It's a continuous effort to confront complex challenges therefore innovation is imperative.
The organization gather all the information concerning the market, the customers’ need, the trends, the competitors and everything the political situation. Using all the information, the organization will analyze its threats and opportunities as well as strengths and weaknesses. Based on the analysis the organization will know what they could do innovate.
Once the organization knows what they could do, they have to choose the most appropriate one by measuring the risks and rewards.
The final step is about implementing the strategy the organization has chosen. The organization will plan for the implementation. They have to think the resources they need to implement it and how they get these resources.
Different types of innovation : 4P's model
To succeed in managing innovation, an entrepreneur has to understand different dimensions of innovation. Bessant and Tidd introduced the 4P’s model in which they categorize innovation into 4 different types:
Degree of innovation: Incremental and radical innovation
Once the organization made it choice on what type of innovation they need, they will have to choose how much they want to innovate. There are 2 degrees that the organization could choose when it comes to innovation (Jaime, 2015):
If an organization wishes to survive and grow in today’s environment, innovation is the key to maintain their competitive advantage. Innovation helps the organization to gain competitive advantage over other organizations (Hana, 2013).