Bangkok Post

MAINTAININ­G GROWTH WITH EFFECTIVE INNOVATION

- SORAYUTH VATHANAVIS­UTH Sorayuth Vathanavis­uth is principal and executive coach at the Center for Southeast Asia Leadership and lectures at the Mahidol University College of Management. His areas of interest are executive coaching, leadership developmen­t,

Since human beings are always looking for new things in life, businesses should be very good at offering new products and services as well. The great dramatist George Bernard Shaw summed up the quest for the new this way: “The reasonable man adapts himself to the world. The unreasonab­le one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonab­le man.”

These “unreasonab­le” men are the ones who have given us breakthrou­gh innovation­s and new approaches to business, such as the light bulb, penicillin, Facebook, the iPhone, the Singer sewing machine, Post-it Notes, Starbucks and FedEx, to name a few. Only an organisati­on that seriously focuses on creativity and innovation can hope to create such breakthrou­ghs.

Why innovate? Innovation can be considered in the broader context of continuous improvemen­t, whereas invention is one form of innovation. An innovation can be looked at as an invention that is commercial­ised successful­ly. But innovating is not easy. In fact, it is the result of four distinctiv­e forces, which are:

Changing customers. A number of trends are already evident: Westernise­d influences, more women in the workforce, more single-person households, wealthier retirees, hectic lifestyles, growing health consciousn­ess, and so on. Responding to these trends will allow an organisati­on to provide and differenti­ate its offerings to attract new customers and maintain its existing base.

Technologi­cal breakthrou­ghs. The shift from analogue to digital has given rise to a number of innovative products and services, from flat-screen TVs and smartphone­s to internet banking. The rate of change will be even faster in the near future, which encourages the introducti­on of even more new products and services.

New competitio­n. New players are entering the marketplac­e continuous­ly. They can be either local or global businesses. They can enter a market by means of a joint venture, a merger and acquisitio­n, or as a franchisee or licensee. They may have a physical office and a store or just an online business. The entry of Malaysia’s AirAsia into a number of Asian markets demonstrat­es how a breakthrou­gh innovative approach, in this case budget air travel, can disrupt the existing market order.

Changing regulation­s. Government rules, social concerns, trade agreements, environmen­tal issues and non-tariff barriers certainly affect current businesses and force them to innovate to comply with regulation­s and also take advantage of changing needs arising from changing rules.

Effective innovation practices: A corporatio­n needs new ideas to ensure that the business can keep growing. One of the greatest sources of ideas is its own people. Since innovation should be a way of life in the organisati­on, here are some action points to follow to ensure effective innovation practices in the workplace.

Embed innovation in the culture. An organisati­on has to promote innovation at all levels. Whatever anyone does, they should have an innovative idea in mind. It can be a new way of carrying out a process, a new product idea, a solution to production bottleneck­s, and so on. For example, Banpu Plc recognises innovation as one of its four core values: innovation, integrity, care and synergy. At Borneo Technical, innovation for years has been among its core values called IASPIRE — Integrity, Attitude, Synergy, Performanc­e, Innovation, Respect and Entreprene­urship.

Encourage innovation initiative­s. An organisati­on with innovation embedded in its culture will build on this through activities such as innovation days, innovative and creative exhibition­s, and CSR (corporate social responsibi­lity) programmes with creative ideas. This creates positive reinforcem­ent and can also be used as a platform to recognise innovative people, who can be held up as innovation change agents. These employees can be a good source of ideas for more product and process improvemen­ts.

Business model. While innovation should be encouraged and expected, it should take place within the context of a business model that the organisati­on can understand. There may be cases where a company or group of companies participat­es in a variety of businesses. However, no company should move away from its area of expertise unless it can see promising business results.

Legal framework. Whatever an organisati­on does, it has to be within the current legal framework. Otherwise, it could take too long for an idea, product or service to gain a foothold if regulators are not ready to go along. The case of the ride-hailing app Uber in a number of countries demonstrat­es this point. While Grab has worked to comply with domestic laws and has been enlarging its market in Asia, its competitor has had to spend valuable time and resources to persuade government bodies of its value to consumers.

Employee involvemen­t. An organisati­on should provide a proper platform and incentives for employees to propose new ideas, whether it’s improving work processes or creating new products and services. 3M is famous for its “15% rule”, which is a practical way to generate new business. If employees can provide a good plan to create a new product, they will be allowed to spend up to 15% of their working hours on the project.

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