Assessing Innovation
Assessing Innovation
Businesses are under pressure to innovate. Innovation can be approached in two ways: product innovation and process innovation.
Innovation
Innovation is the development of a new idea which leads to the production of a new product or service which can be sold.
For example, Dyson developed the world’s first bag-less vacuum because of its innovative approach to business.
Pressures for innovation
Social changes may increase the demand for innovative and advanced products to replace current products.
Competition may increase a business’ focus on innovation as competitors seek to develop new products and services which will attract customers.
Product innovation
Product innovation involves the development of new products which will be offered for sale to customers.
For example, the development of new camera technology which improves the iPhone is an example of product innovation.
Process innovation
Process innovation involves improving the process of manufacturing or offering a product or service for sale to customers to add value, decrease costs or improve efficiency.
For example, the development of a new factory production line which improves the production of cars is process innovation.
Advantages of innovation
Innovation allows businesses to improve the products in its portfolio which can increase market share, sales revenue, and profit.
Innovation allows a business to improve its processes which can increase efficiency and therefore competitiveness.
Innovation allows businesses to develop a unique selling point which can improve competitiveness and customer loyalty.
Ways to Become Innovative
Businesses can become innovative in several different ways:
Kaizen
Kaizen is an approach to innovation and consists of continuous improvements being made to a process so that over time it continues to evolve and develop.
A Kaizen approach requires the support of employees; however, employees must feel passionate about helping the business improve.
Intrapreneurship
Intrapreneurship refers to individuals who have the characteristics of entrepreneurs but work within and contribute their entrepreneurial ideas to their employer instead of pursuing these on their own.
Intrapreneurship can only lead to business improvements if there is an accepting culture of employee contributions.
Intrapreneurship can motivate employees which supports engagement and retention.
Benchmarking
Benchmarking refers to the process of identifying an area of expertise or specialism within the industry and using this as a foundation to inform and improve the business’ own process.
Benchmarking allows a business to adopt industry best-practice.
Benchmarking assumes a business is able to implement processes from other businesses and this may be a challenge depending on the business, its expertise, and the wider industry.
Research and development
Research and development refer to the process of researching new approaches and products and developing these to satisfy customer needs.
Research and development allow businesses to update and introduce products and services which are reactive to changes in customer demands and technological advancements.
For example, Dyson’s commitment to research and development underpins its product development. Recently, Dyson released its Eye Bot robot which was an innovative product driven by research and development.
