MAINTAINING GROWTH WITH EFFECTIVE INNOVATION
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.