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Question Sir,
plz help to knoe about the following question. thank you.
1.‘The concepts of creativity and innovation are often used interchangeably.’ Explain this statement in the light of factors influencing creativity and innovation.
2.Discuss business importance of CSR with special emphasis on quality of management.
3.Write short notes on
a) Scope of Ethics
b) Knowledge Creation
c) Product Life Cycle
Answer LAXMI,
HERE IS SOME USEFUL MATERIAL.
ANSWERS FOR SHORT NOTES HELD UP FOR WANT OF SPACE.
PLEASE SEND THE SHORT NOTE Q AGAIN.
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LEO LINGHAM
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1. ‘The concepts of creativity and innovation are often used interchangeably.’ Explain this statement in the light of factors influencing creativity and innovation.
Developing a systematic innovation strategy from scratch is a challenge many companies are facing in today's fast-paced world.
Begin a Systematic Innovation Practice - Step One
Innovation is frequently discussed and is on almost every CEO’s agenda. Not enough executives, however, know how to pursue and execute innovation. There are ongoing debates about the definition of innovation, its differentiation from creativity, innovation methodologies, measures of innovation, innovation strategy and, of course, the types of innovation. The first step in pursuing innovation is to understand what type of innovation a company needs and how many resources a company should commit to developing a systematic innovation practice.
Types of Innovation
Outcome-Based Innovations
One of the common breakdowns of innovations represents the incremental, radical and general purpose types of innovation. Incremental innovation represents more of a continual improvement when an existing product, process, service or solution is improved creatively. Radical innovation represents the replacement of an existing solution with a significantly different approach (e.g., a transistor replacing vacuum tubes in electronics or email replacing conventional mail). A radical innovation causes a disruption in the current way of doing things. General purpose innovation describes significant innovations that fundamentally change the way of thinking and doing. Such innovations have wide impact, scope of improvement and a broader range of uses (e.g., the discovery of electricity or Einstein’s theory of relativity).
Process-Based Innovations
Four categories of innovation are defined by their processes:
continuous process improvement,
process revolutions,
product or service innovations, and
strategic innovations.
Continuous process improvement innovation represents methodologies such as LEAN . The focus is on incremental innovations. Process revolutions relates to the implementation of new technology, such as RFID, for improving supply chain management productivity. Product or service innovations represent new products or services, such as the iPhone, without changing business models. Strategic innovations include new products or services but with new business models such as Segway rentals or web-based applications.
Operations-Based Innovations
Some organizations differentiate between categories and types of innovation. There are four categories of innovations including
-finance,
-process,
-offerings and
-delivery.
Finance innovation relates to business models, networks and alliances for innovations such as Dell’s personal computer business and supply chain management. Process innovation relates to enabling processes for innovations such as the compensation and benefits packages at Starbucks and real-time inventory management at Wal-Mart. Offerings innovations include innovative product performance through unique features in an automobile, a product system such as Microsoft Office with multiple products and service innovations as seen in Singapore Airlines flights. Delivery innovations include innovations in channel (e.g., Martha Stewart products), brands (e.g., the iPod) and customer experience (e.g., Harley Davidson).
Pathways-Based Innovations
The four types of pathway-based innovations include
-product,
-process,
-positioning and
-paradigm.
Product innovations are most apparent in the mobile phone market with new phones arriving frequently. Process innovations include new methodologies such as six sigma, Lean and TRIZ. Positioning innovation implies repackaging an existing product or service, and branding it innovatively (e.g., the increasing camera capabilities of cell phones could lead to it being branded as a camera). Paradigm innovation represents a shift in thinking and doing. For example, mainframe computers in the late 1970s led to the personal computer, a new paradigm of computing. Today, mobile phones are making conventional landline phones obsolete and Internet phones are in some cases replacing mobile phones.
Hierarchy-Based Innovations
In order to build a portfolio of innovations – and have a strong causative relationship between innovation and allocated resources – there may be a variety of innovations. Depending upon the primary responsibility for managing innovation and key steps in the innovation process, there include THE FOLLOWING TYPES :
-business model,
-managerial,
-process,
-service and
-product.
Of these types of innovation, business model is critical as it sets the direction and the approach of a corporation. MANAGERIAL INNOVATIONS relates to innovative approaches to managing people, technology and resources. Process innovation implies a revolutionary improvement to, or re-engineering of, an existing activity. Service innovation means developing new ways to deliver services or creating new services altogether. Product innovation involves creating products that offer new capabilities for significant economic payoff.
Thought-Based Innovations
While all of the previously-defined classifications have their merits, fundamentally speaking innovation is an intellectual activity. Creativity is a unique combination of two events or ideas – the ability to discover the unique combination is critical. Applied creativity is innovation. The breadth of an organization’s creativity is controlled by people, influenced by the environment and opportunities provided by a company’s leadership.
By reviewing the contributions of great innovators, specifically Einstein, Galileo and Edison, it is clear that Einstein engaged in mostly theoretical innovation, Edison innovated practical or business solutions, and Galileo did a combination of the two. Einstein’s work was more fundamental in nature, while Edison’s work was more tangible. Einstein conducted mostly thought experiments (e.g., riding the light wave), while Edison conducted experiments in his laboratory. Looking at various innovations, they can be classified into four categories based on the amount of effort and the speed-of-thought components (knowledge, play and imagination): fundamental, platform, derivative and variation.
Fundamental Innovation
Fundamental innovation is a creative idea that leads to a revolution in thinking. Such innovations are based on extensive research, knowledge-driven, theoretically proven and lead to follow-up research and development. Such innovations occur with the collaborations of academia, commercial laboratories and even corporations. These innovations may lead to changes in thinking, extend an existing theory or be a breakthrough concept with enormous impact – perhaps even leading to the evolution of a new industry. Examples of such fundamental innovations include Einstein’s theory of relativity, electricity, penicillin, the telephone, wireless communication, the transistor, computer software, UNIX and the Internet. A fundamental innovation has a significant academic component of science, which makes it available for the common good and also less protected, commercially speaking.
Platform Innovation
The platform innovation is defined as one that leads to the practical application of fundamental innovations. Such innovations normally are launching pads for a new industry. Examples of platform innovations include personal computers, silicon chips, cell phones, digital printers, Microsoft Windows, databases, Linux, drug delivery devices, satellites and the space shuttle. The platform component increases the portion of the laboratory or development component more so than do fundamental innovations. Platform innovations launch industries and change ways of life.
Derivative Innovation
A derivative innovation is a secondary product or service derived from a platform innovation. Derivative innovations include new server-client configurations based on a new network architecture or operating system for a cell phone, for example. These innovations are slight modifications of the main product. In the case of Microsoft-like software, the platform is Windows and derivatives are a new office suite; for CDMA-like platforms, derivative innovations are various features available to service providers; for a major satellite system, the derivative innovations are various launching options or capabilities offered to users.
Variation Innovation
A variation innovation is a tertiary-level innovation that requires less time to develop and is a slight variation of the next-level products or services based on a derivative innovation. For example, variation innovations in cell phones are various color covers, ring tones, camera feature and additional software-based optional features. In the case of Microsoft software, variation innovations are applications developed and based on the Microsoft platform and derivative innovations. Typically, the variation innovation occurs close to the customer and may be the candidate for reaching the ultimate in speed of innovation or innovation on demand in real-time.
Interactions Among Thought-Based Types of Innovation
Various types of innovations are achieved by differing degrees of speeds of thought, which consists of knowledge, play and imagination. A fundamental innovation may require a more meditative process to think of theories, concepts or solutions without significant physical experimentation. In fundamental innovation, knowledge and imagination are key components. For example, Einstein’s work was completed in his mind rather than in a laboratory – typically conducting "thought experiments."
A platform innovation involves relatively less knowledge and imagination, but rather more play or experimentation. A variation innovation requires more play than does a fundamental innovation. Fundamental innovations can take a much longer time than do the other innovation types; as a result, more variation innovations will result than will fundamental innovations.
Conclusion
By understanding the types of innovation, an organization can decide its domain of innovation and develop an innovation strategy suitable to produce solutions within the designated type of innovation. The company then can look into the resources that will facilitate particular types of innovation. For example, to develop a fundamental innovation the leadership must understand the process will take a long time, dedicated resources, and overall more endurance, persistence and patience. On the other hand, variation innovation requires more experimentation and/or play, and can be completed in a shorter time. Company leaders must first decide the planned scope of innovation activities in order for the corporation to appropriate necessary resources to facilitate the innovations to come.
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Begin a Systematic Innovation Practice - Step Two
Strategize for Innovation
An organization must look for opportunities for innovation by understanding the types of innovation and recognizing its domain expertise. Common questions asked by a company are why to innovate and what to innovate. Consider an R&D division – employees try to innovate to further their careers, expand their horizons, publish papers or file for PATENTS. As a result, many researchers are engaged in exploration in multiple directions with few aligned to their company’s domain expertise and strategy of sustaining profitable growth.
There are many ways to turn this situation around. The organization’s marketing department should explore new product or service opportunities based on the customer feedback, supply chain interaction, and related industries. Operations staff should look for internal opportunities for innovation to improve efficiency, and productivity through process innovations. Business strategists must look into competitive BENCHMARKING and explore opportunities for business model innovations. Knowing the scope of a company’s products or services shows the myriad of opportunities for product, process and business model innovation. One must assess scope of the innovation based on the fundamental (creative idea that leads to a revolution in thinking), platform , derivative (secondary or product or surface derived from a platform innovation) and variation (tertiary-level innovation that requires less time to develop and is a slight variation of the next-level products or services based on a derivative innovation) breakdowns.
Scout for Innovation
A business must be fully aware of its SURROUNDING ENVIRONMENT and its own ecosystem in order to identify opportunities for innovation by not only completing COMPETITIVE benchmarking, but also looking for CUSTOMER pain, inconveniences, conflicting situations in design, and implicit or explicit demand for new capabilities. Making use of a company’s existing product or services, by making them more convenient, less costly and more fun are simple beginnings for creating innovation opportunities.
Innovation is sometimes thought of as glamorous – looking for the "next big thing." But innovation breaks down into determining what the next big thing is, what it takes to produce it and how to make it a success. In order to expand into future products, a company must first learn the historical trends and EVOLUTIONS of similar products. Performing regression analysis, accelerating the evolving trend and expanding the horizon can help identify new opportunities for breakthrough innovation.
Besides extending and exploring, enlisting established networks can create potential for new innovation.
Analyzing opportunities to innovate helps a business further recognize, prioritize and maximize return on investment. This also helps to define innovation targets in terms of performance, value, price, cost, resources and time.
Strategize for Innovation
Prior to developing an innovation strategy, a company first must develop a baseline performance level. Innovation diagnostics will identify areas of strengths and weakness to incorporate in the strategic planning. For a corporation to institutionalize innovation to sustain profitable growth, a corporate commitment must be made to achieve continual growth in terms of revenue, profit margin, job opportunities and employee development. The main drivers for successful, strategic innovation are profitable growth, intellectual involvement of employees, a CREATIVE and fun culture, and a visionary leadership.
Strategic planning must address the following issues in relation to an innovation practice:
LEADERSHIP
Value proposition
Resources
MEASURES
Identification of key players responsible for the initiative
METHODLOGIES
Organization structure
Roadmap (with toll gates)
CULTURE of creativity and risk taking
Excellence in idea management
Incentives and controls
Rapid commercialization
Sustaining innovation on demand
An innovation initiative should be launched with incremental milestones after the planning and preparation is complete. A company’s innovation plan can follow the target, explore, develop, optimize, commercialize (TEDOC) phases described below:
(T)arget – A clear need for innovation based on opportunity analysis
(E)xplore – Research, benchmark and analyze the opportunity, and gain expertise knowledge in the domain
(D)evelop – Alternative innovative breakthrough solutions to maximize innovative components
(O)ptimize – The final solution for minimal diversion in operations and delivery
(C)ommercialize – Rapid access to the marketplace and customers to ensure premium margins and above market return on investment
Conclusion
Institutionalizing innovation must establish processes for innovation on demand and innovation driving demand for growth. Continually scouting opportunities for innovation and scheduled demand-driven innovation provides a competitive edge to a business and facilitates profitable growth.
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Begin a Systematic Innovation Practice: Step Three
The ART OF INNOVATION is a well-known phenomenon that many people know and practice. Some do more than others, some practice personally while the others do at work, and some do it without knowing that they are being innovative. Similarly, corporate leadership practices innovation inadvertently or consciously. Just like walking, jogging, running or racing utilize different faculties, level of energy and intellect, it is the acceleration of innovation that need be mastered in global competitive environment.
With an understanding of the types of, and strategic planning aspects of, innovation, the next step for a company’s leadership is committing to innovation for its value proposition. The challenge is clearly laying out the value proposition – why should a company commit to innovation, what should be the return on innovation and how does innovation affect employees?
Reasons for Innovation
The corporate objective of making money can not suffice for a company’s meeting its obligations to its stakeholders. Making money by cutting costs hurts employees, making more money through mergers and acquisitions is not necessarily a long-term strategy, and growing business while creating more jobs without making money does not appear to be a viable approach. The commitment to innovation must be driven by sustaining profitable growth and creating jobs. Eventually, business and society do complement each other. Without societal contributions business is a non-value entity in the community; without creating value through businesses a community will not develop.
Innovation to sustain profitable growth requires new products and services to expand opportunities to serve customers – innovative approaches to reduce costs and strive for perfection makes the growth rewarding. New products or solutions can be an activity primarily assigned to dedicated resources with participation from other employees; however, cost reduction and perfection require the intellectual involvement of all employees. A company’s leadership must commit to innovation at the product and the process level, embedding innovative thinking in everything that occurs in the company.
Committing to creating jobs drives a business’ growth. Producing more value to grow profitable revenue is a better approach than making money selling an idea or building a widget by exploiting cheap resources. Creating jobs also requires the leadership to think beyond making numbers. Otherwise, people become head counts that are easily chopped, thus limiting innovation.
Organizational Alignment for Innovation
Once reasons are understood, responsibilities must be assigned to accelerate innovation both in the process and product areas, innovating new product concepts and innovating new process capabilities. The organizational alignment must address the following aspects explicitly:
Revenue growth through innovations
New product innovations
Process innovations
Idea management
Creativity culture
A typical organization includes a chief operating officer (COO), chief financial officer (CFO) and chief executive officer (CEO), where the COO’s role is to make money, the CFO’s is to count the profit and the CEO’s role is not clearly defined. When Lou Gerstner took over IBM’s sinking ship in 1993, he strengthened key customer relationships, besides leading restructuring the company. CEOs normally create revenue growth opportunities. The most common approach for dramatic growth is realized through mergers and acquisitions (M&A). Today, corporations realize that M&A must be supported with strong organic growth through innovative products and services. A path for organic growth must be established that is missing in most organizations. Many organizations hold on to an old innovation strategy too long.
The path to organic growth begins with listening to sales staff, distributors, customers, users and suppliers, observing market trends and engaging employee ideas for identifying new opportunities. Nurturing creativity, enlisting employee ideas, exploring new opportunities and developing new products becomes the way of doing business. Innovative thinking becomes an explicit expectation of every employee. Figure 1 shows the organization for organic growth.
Establishing Key Measures of Innovation
INNOVATION MEASURES vary from company to company. The underlying intent should be to establish a minimal set of measures that inspire innovation, monitor innovation activities and maintain accountability for results. Knowing measures alone does not affect activities, it is the effective use of measures by leadership that will accelerate innovation. At the operation level, measures could be recognition, incentives, ideas per employee and revenue growth. However, revenue growth alone without profit can discourage innovation; revenue growth must be profitable as well. Measures like profitable growth and return on investment in innovation can also be good measures. The returns can be calculated as profitable growth over the investment dollars in research and development, and innovation-related activities.
Protecting Intellectual Property
Businesses need to focus on protecting useful intellectual property. Fundamental innovations that are more scientific in nature may not be protected, while platform and derivative innovations that have significant economic ramifications must be protected. Variation innovations have a limited life and may not be worth protecting. Establish clear criteria for what to protect, what to hide and what to use without protection.
Educating Employees in Innovation
Every person is born creative. People do innovate for themselves, so they are not totally ignorant of the innovation process. People have not thought hard enough, however, to formulate their process of innovation or creative thinking. Innovation has been sporadic and rare.
In order to keep up with the growing demand for innovative solutions and services, employees need to learn a framework of innovation that allows them to utilize their intellectual and material resources to develop innovative solutions when needed, rather then randomly developing an innovative solution. Employees need to accelerate innovation using a holistic process that is easy to apply and good enough to produce significantly innovative solutions that can generate economic value directly or indirectly.
Organizations must establish a training program in innovation for executives and employees. Employees directly involved in design and development must master innovation skills and achieve certain competency levels. Employees involved in innovative improvement must also understand the framework, corporate expectations and use of available resources. Two important aspects of training in innovation are creating awareness to continually identifying opportunities for innovation and inspiring employees for creating usable innovative solutions quickly.
Conclusion
Committing to innovation implies understanding the causative relationship between innovation activities and results, aligning and allowing human resources to innovation activities, establishing key drivers and having a system to protecting intellectual property. Cultivating innovation means creating awareness of innovative thinking through training and education, and nurturing intellectual engagement and innovation through support and resources.
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Begin a Systematic Innovation Practice - Step Four
In the first three steps for developing a systematic innovation strategy, a company prepares to innovate disruptively by creating the environment in which to institutionalize innovation, having its leaders instill a culture that believes in the significance of innovation. Leadership is accountable for the organization’s profitable growth. Successful businesses grow through in-house innovations; the challenge is deciding what to innovate. Companies must learn to identify opportunities for dramatic growth through disruptive innovations.
Identify Disruptive Innovation Opportunities
According to Clayton Christensen, in his book Innovator’s Solution, the disruptive innovation must have predictably higher chance of success. An organization cannot afford to invest resources in a project for disruptive innovation that has a high probability of not being successful. An organization cannot wait for business downturns to trigger an innovation as successful organizations continuously innovate products or solutions. Investing in innovative new products while the organization is doing well is necessary to perpetuate profitable growth.
Innovation Leadership
Identifying opportunities for innovation or new products is hard thing to do. There are businesses in which faster, better and bigger products were designed but never sold. One of the critical acts of leadership is to appoint an innovation leader responsible to lead a team of innovative new products, such as the role Steve Jobs unofficially holds at Apple. A planned approach is to appoint a leader who is interested in innovation, promotes employee creativity, understands new product processes, knows the significance of profitable growth, challenges employees to do their best, enjoys competition and takes pride in success.
An innovation leader provides the necessary resources and aligns the organization for growth through innovation. The innovation leader treats the task of developing new innovative products as projects and institutionalizes innovation through actions promoting employees’ intellectual engagement.
Identifying Opportunities for Innovation
The innovation team works on identifying new opportunities through learning customer behaviors and circumstances, extensions of the current behaviors and expansions of their needs. Studying customer behaviors in a multi-dimensional perspective helps better identify customer pain points, complaints, chronic problems, indecisions, insecurities, stagnations, inconveniences or discomforts. Additionally, competitive benchmarking, SWOT (strengths, weaknesses, opportunities, threats) analyses, and trends in marketplaces, industry performances and adjacent markets or industries can also generate ideas for innovative products. Generating lots of ideas sounds easy; however, generating innovative ideas require thinking without constraints. Many times good ideas are shot down by pre-imposed constraints. It is necessary to separate the definition of requirements from developing solutions, and not allowing the solution to dictate requirements. Once the ideas are generated they can be filtered, analyzed and prioritized for salability of the product to meet the revenue growth requirement.
Avoiding Innovation Failures
Studies have shown that ideas are dime a dozen – there is no shortage of ideas. Breakthrough products come from the distribution of the quality of ideas. The likelihood of identifying that product in advance is small. A culture of continual innovation, therefore, must be created in which a classification of ideas is based on many industry specific factors.
The most important aspect of making innovative products is to avoid FAILURES caused by three factors:
An inability to introduce the innovation to potential users (i.e., the marketing plan),
Poor optimization of design for reproducibility and
An insufficient value proposition to change behaviors due to lack of sufficient innovation.
These failure modes can be avoided by:
Developing a commercialization plan (developed plan with the support of required resources),
Planning operations for reproducibility (designed to virtually perfect the solution) and
Demonstrating the extent of the innovation (researched and purposefully imagined).
Establishing Innovation Projects
Once the opportunities have been identified, analyzed, enhanced and sifted through success filters, potential projects must be defined for new innovative product development. To prevent project delays, a company must deploy a process for innovation that in some way includes the following five steps: target, exploration, development, optimization, commercialization . The commercialization must be a distinct and required step as it is the divider between success and failure, an innovation or simply creativity.
To some extent everyone is creative and innovative. But when asked to be "innovative," it is not easy to produce results. TEDOC represents all key aspects of the successful innovations that one must be aware of – helping develop skills and competency in innovating on demand for breakthrough solutions.
Target
Defining an opportunity for innovation is critical. In order to develop breakthrough innovations, a business needs to know what to innovate. Determining what to innovate depends upon the need for innovation. This need can be found in complaints, nagging or chronic problems, indecisions, frustrations, technical limitations, circumstances and competitors’ organizational limitations. A business should also look at the maturity of its industry, trends in supplier performance, SWOT analyses, industry performance and the available market.
Once potential innovation opportunities have been identified, the innovation team must document key benefits of the solution to be innovated and determine the key measures of its success.
Explore
A company needs to fully, and quickly, research its opportunities to beef up its necessary competencies. The innovation team should identify and research keywords associated with the opportunity for innovation, generate new ideas, answer questions, generate new questions and generate more new ideas. These ideas then need to be combined, filtered, analyzed and prioritized. These selected ideas are analyzed as inputs to the solution to be developed and experimented with for developing solutions. Tools in this phase may include brainstorming, affinity diagrams, failure mode and effects analysis (FMEA), process thinking, etc.
Develop
Innovators need to develop alternate solutions that are significantly innovative. Experience shows that following the "rule of 2" helps stretch imaginations while people experiment. According to the rule of 2, in order for a solution to be a breakthrough innovation, it must affect the performance of the desired features by dividing or multiplying by 2. In other words, if less is better halve (divide by 2) it, if more is better then double (multiply by 2) it. The expected change is expected to force a different approach to the current position.
The extent of innovation depends upon the innovation team’s efforts (the amount of available time committed to the desired innovation), knowledge (domain expertise), ability to play (experimentation) and overall imagination (extrapolation to achieve breakthrough innovation). In order to create a unique selling proposition and barriers or competition, a company must try to maximize innovation rather than just create a minimal innovation. Tools used in this phase include the competency necessary to create new knowledge, creativity for proposing alternative solutions, evaluation and analytical methods, and the facility to conduct experiments.
Optimize
Many great innovations remain marginally successful and have limited shelf life due to an inability to reproduce it effectively and economically. A great design alone does not provide a good return on innovation. The optimize phase focuses on maximizing the economic benefit of the innovation. In the current R&D-driven product development environment this is the most significant step missing for ensuring a product’s success. Due to a lack of optimization in the design or pre-production stage(s), manufacturing operations suffer from design constraints. Today, most designs are quickly verified for their functionality and performance, but only on a limited sample size of potential process conditions during a product’s life cycle. The prototype or pilot run that looks acceptable may result in continual rework and field failures leading to a significant adverse impact on profit margins. The typical used tools in this stage are process management, optimization software programs and the facility to conduct the necessary experiments.
Commercialize
Many entrepreneurs and innovators fail in this phase – an innovative solution exists but not enough people who would value it know about it. Without development there is no creativity, without optimization there is no profit and without commercialization there is no innovation. It is the commercialization of a creative solution that coverts creativity into innovation. Every innovator, therefore, must learn the process of commercialization and develop the knowledge necessary to create value. In the commercialization phase, an innovation team must practice strategic thinking, methods of pricing a solution, messages of value proposition, viral marketing, business planning, and making deals for licensing or selling the breakthrough solutions.
Leadership expert Steven Covey says to begin a task with the end in mind. In the case of innovation, begin innovating with commercialization in mind. Often, commercializing is tougher than discovering the innovative product. The full cycle of innovation, thus, starts from the identification of the need for an innovative solution and ends with the commercialization of the innovative solution.
Developing innovation on demand makes the task of commercialization easier as the innovative solution is already sold. However, improvement in the success rate of demand-driven innovation depends on the speed of the innovation. Once a company masters the process of innovation through practice and commitment, a company can innovate quickly.
Conclusion
Innovating disruptively requires identifying the need, expanding the horizon of thoughts, developing breakthrough solutions by applying the rule of 2, and optimizing and commercializing the solutions to ensure the innovation’s profitable growth. A good understanding of this process improves the speed resulting in making innovation a success with exciting rewards.
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Begin a Systematic Innovation Practice - Step Five
Once a company has invested in deploying innovation through cultural transformation, it is important that the culture of innovation is sustained. Any company should begin its innovation journey with the end in mind; in this case, an effort to sustain innovation must be carefully planned and practiced to perpetuate the culture of accelerated introduction of new products or solutions.
Return on Innovation
Most studies show that it has been difficult to establish a correlation between innovation and corporate performance. Even worse, surveys of CEOs have found an adverse relationship between investment in innovation and corporate performance. Such existing situations and executive perceptions may be a contributing factor for the confusion concerning the topic of innovation, and for a lack of commitment to systematic innovation. The best way to sustain innovation is to ensure there is return on innovation.
Innovation Intent
Many companies consider growth in revenue as return on innovation; many times growth in revenue, however, does not translate into more money for the organization – so there is no return on innovation. Though the revenue growth will somewhat reflect the role of a company’s innovation, it does not say anything about the effectiveness of innovation. To ensure return on innovation, profit growth must also be ensured. Innovative products not only provide more opportunities for revenue growth, they also enable better margins on sales.
Innovation can have multiple dimensions of impact on corporate performance and can be analyzed by the following categories:
Most innovative: revenue growth
Best innovative: profitable growth due to innovation
Managed innovation: a causative relationship exists between the innovation and the resulting outcome
Return on innovation: the financial return on investment in innovation
In order for a company to sustain innovation, it must regularly introduce new products and services with significant innovation components, and emphasize the commercialization of its innovations in order to maximize its return on innovation. As the table above shows, even a look at five companies shows that return on innovation (measured in dollars) is far from being maximized. It highlights the need for institutionalizing innovation, and improving efficiency and effectiveness of the innovation process.
Linking Innovation to Corporate Strategy
Deploying innovation with a clear mandate for expected outcomes will yield random results. In many organizations, research and development and innovation become the end rather than the means to achieve business objectives. Innovation must create value, excitement and return on investment through leadership, planning and execution for innovation.
Corporations have objectives to be profitable on a quarter by quarter basis. The challenge in managing profit by quarter leads to decisions for a quarter that require mostly actions and little thinking. This leads to no room for innovation, while taking actions to cut costs. Such an approach is counterproductive to creating a culture of innovation. Organizations prioritize research and development projects for their importance to provide returns in the short-term. This strategy will haunt these organizations in the long-term.
Organizations must apportion resources for long-term research for fundamental and platform innovations, and for short-term development for derivative and variation innovations. Large organizations that sacrificed longer term technological research and development in favor of shorter term design innovations step into sudden crashing moments. Intel and Motorola are good examples of perennially successful companies in economic trouble due to a lack of fundamental innovations for developing new platform products. Intel needs fundamental innovations in process and manufacturing, while Motorola could benefit from breakthrough innovations in communication technologies.
Linking the corporate strategy to profitable growth will lead to planning for innovation at all levels. Successful companies continually look at their innovations from annual to ten- or twenty-year outlooks in order to perpetuate the culture of innovation. Maintaining profitable growth through innovation will bring purpose to innovation activities.
Accelerate Innovation
In the technology age information has become a commodity, with intelligence a competitive advantage. The ability to continually mine information to extract unique intelligence and create new knowledge must become routine activities. Continual analysis and interpretations of market, process, product and business information can be used to identify new areas of revenue growth and innovation. Corporate leadership must develop plans to introduce innovative products, services or solutions to generate achieve margins and revenue growth. Expectations for introducing new products, solutions and services create a schedule for efficient and predictable innovation – requiring a process that works for the organization consisting of inspiring leadership, creativity culture, idea management, engineering skills, optimization tools, operations capability, marketing resources and economic mindset.
Every organization is an innovative organization to a varying extent. The challenge, however, is to innovate better and faster. Accelerating innovation requires formalizing and optimizing the innovation process by understanding its components, committing resources to the various types of innovations, and driving the success of the innovation process. The leadership must not question whether innovation works, but instead challenge the organization for more innovation.
Continual Renewal of Innovative Practices and Behaviors
The innovation focus must not become only a chief executive officer-level initiative. The culture of innovation requires the establishment of a compelling vision, clear direction and credible challenge for employees to be engaged and collaborate. The leadership must set the tone for positive behaviors in the organization for success that celebrates every employee’s strength rather than look for poor performing employees in the organization. Innovative organizations must aim to enable every employee to excel rather than create a bureaucracy to identify excellent people that could stifle their creativity.
It is the responsibility of the corporate leadership to promote intellectual participation of employees by sincerely listening to employee ideas and rewarding value creation. Setting periodic challenges for employees to overcome, recognizing creativity and rewarding economic success through innovation will drive employee-driven innovative practices.
Most successful organizations also define their corporate values relative to their leadership and employee engagement. The values define decision making and prioritization on a daily basis. These values must incorporate intellectual involvement of employees for creating value for the organization, partners and society. The culture of innovation flourishes where thinking without constraints, execution within resources and celebration with success are practiced. Innovation is an investment that should – and must – pay dividends if led and managed with care.
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How is Innovation different from creativity ?
The term innovation means a new way of doing something. It may refer to incremental, radical, and revolutionary changes in thinking, products, processes, or organizations. A distinction is typically made between Invention, an idea made manifest, and innovation, ideas applied successfully. In many fields, something new must be substantially different to be innovative, not an insignificant change, e.g., in the arts, economics, business and government policy. In economics the change must increase value, customer value, or producer value. The goal of innovation is positive change, to make someone or something better. Innovation leading to increased productivity is the fundamental source of increasing wealth in an economy.
A convenient definition of innovation from an organizational perspective is
"Innovation . . . is generally understood as the successful introduction of a new thing or method . . . Innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services.
Innovation typically involves CREATIVITY, but is not identical to it: innovation involves acting on the creative ideas to make some specific and tangible difference in the domain in which the innovation occurs.
"All innovation begins with creative ideas . . . We define innovation as the successful implementation of creative ideas within an organization. In this view, creativity by individuals and teams is a starting point for innovation; the first is necessary but not sufficient condition for the second".
For innovation to occur, something more than the generation of a creative idea or insight is required: the insight must be put into action to make a genuine difference, resulting for example in new or altered business processes within the organization, or changes in the products and services provided.
Innovation = Creativity * Risk Taking
Creativity is defined as the tendency to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.
Three reasons why people are motivated to be creative:
need for novel, varied, and complex stimulation
need to communicate ideas and values
need to solve problems
In order to be creative, you need to be able to view things in new ways or from a different perspective. Among other things, you need to be able to generate new possibilities or new alternatives. Tests of creativity measure not only the number of alternatives that people can generate but the uniqueness of those alternatives. the ability to generate alternatives or to see things uniquely does not occur by change; it is linked to other, more fundamental qualities of thinking, such as flexibility, tolerance of ambiguity or unpredictability, and the enjoyment of things heretofore unknown.
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2. Discuss business importance of CSR with special emphasis on quality of management.
Corporate Social Responsibility (CSR) is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and the environment in all aspects of their operations. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large.
The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental economic role of businesses, others argue that it is nothing more than superficial window-dressing, still others argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations.
Business benefits
The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise, and are difficult to quantify, though there is a large body of literature exhorting business to adopt measures beyond financial ones , found a correlation between social/environmental performance and financial performance. However, businesses may not be looking at short-run financial returns when developing their CSR strategy.
The definition of CSR used within an organisation can vary from the strict "stakeholder impacts" definition used by many CSR advocates and will often include charitable efforts and volunteering. CSR may be based within the human resources, business development or public relations departments of an organisation, or may be given a separate unit reporting to the CEO or in some cases directly to the board. Some companies may implement CSR-type values without a clearly defined team or programme.
The business case for CSR within a company will likely rest on one or more of these arguments:
Human resources
A CSR programme can be seen as an aid to recruitment and retention, particularly within the competitive graduate student market. Potential recruits often ask about a firm's CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also help to improve the perception of a company among its staff, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering.
Risk management
Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These events can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of 'doing the right thing' within a corporation can offset these risks.
Brand differentiation
In crowded marketplaces, companies strive for a unique selling proposition which can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values. Several major brands, such as The Co-operative Group and The Body Shop are built on ethical values. Business service organisations can benefit too from building a reputation for integrity and best practice.
License to operate
Corporations are keen to avoid interference in their business through taxation or regulations. By taking substantive voluntary steps, they can persuade governments and the wider public that they are taking issues such as health and safety, diversity or the environment seriously, and so avoid intervention. This also applies to firms seeking to justify eye-catching profits and high levels of boardroom pay. Those operating away from their home country can make sure they stay welcome by being good corporate citizens with respect to labour standards and impacts on the environment.
Critical analysis
CSR is entwined in the strategic planning process of many multinational organizations. The reasons or drive behind social responsibility towards human and environmental responsibility whether driven by ulterior motives, enlightened self-interest, or interests beyond the enterprise, is subject to much debate and criticism.
Some critics argue that corporations are fundamentally entities responsible for generating a product and/or service to gain profits to satisfy shareholders.and others argue that there is no place for social responsibility as a business function.These critics point to the rule of corporate law that prohibits a corporation's directors from any activity that would reduce profits.
Other critics argue that the practice cherry-picks the good activities a company is involved with and ignores the others, thus 'greenwashing' their image as a socially or environmentally responsible company. Still other critics argue that it inhibits free markets or seeks to pre-empt the role of governments in controlling the socially or environmentally damaging effects of corporations' pursuit of self-interest.
philanthropy centric view of Corporate Social Responsibility (CSR
AS PART OF THEIR CONTRIBUTION TO THE SOCIETY,
SOME ORGANIZATIONS HAVE BEEN PRACTISING SUCH PROGRAMS AS
-better pay for local workers in the under-developed countries.
-avoiding under-age employees.
-support for local community sports.
-offer of free sports gears for talents.
-sports events sponsorship.
-supporting the construction of sports grounds.
-cheaper brands for selected countries
-local water supply
-community developments like sports etc
-local school sports support
-scholarships for talents
etc etc
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