Innovation is not invention. Invention is a result of innovation, but innovation is continuous. It is also not discrete, but a combination of two or more entities.
Importance of Domain Knowledge
In order to innovate, a company must have ownership of its skills and knowledge, and businesses that outsource skills and knowledge are paying to reduce their innovative capability. I just cannot understand why companies do that. It is essential for the long-term survival of a company to be able to innovate.
Take Apple: they have brought in chip engineers to enable the company to develop its own chip technology for use with the iPhone. They could easily have outsourced the chips, but this would have detracted from their innovative capability.
By using sound strategic thinking and doing it this way Apple have ownership of their own knowledge and skills, and hence their own ability to innovate.
Strategic thinking and innovation are partners, and strategies that reduce costs, or at least minimize them, and that focus on profitability, support innovation, as does the effective management of change. A failure to meet change and use it to your advantage will lead to stagnation.
Rocking the boat is preferable to maintaining the status quo.
Innovation resulting in the development of new products is a repeatable process that must be managed by the CEO. In order to achieve that effectively, the talent and skills of employees have to be codified, and the whole process driven and managed by the CEO.
Innovation can be managed and is repeatable.
There two major forms of innovation: innovation of products and services that are marketed by the company, and innovation of processes and procedures that can improve productivity and the overall profitability of the company.
By the effective management of innovation, 3M succeed in creating 300 new products each year, and Merck developed 12 high-selling new pharmaceutical products in 10 years.
As stated at the beginning, innovation is a continuous process, and invention is a discrete outcome of it that occurs at a specific point in time. In order for the volume of inventions that 3M and Merck come up with to be possible, a process of managed innovation has to be instituted.
Innovation must be developed into a repeatable system, and that should be one of the main roles of a CEO: to make innovation a systematic and deliberate process rather than relying on luck or serendipity.
.
‘Helping Leaders build great organisations”
(C) Daniel Lock.
