The emergence, or growth, of innovation-based perspectives in business management will predictably undergo major growing pains in upcoming years. As corporations redefine core processes and competencies to shift towards a more knowledge-based economy, “innovation” will easily become a key buzz-word or a desired magic bullet of sorts. We have already seen the growing trend of “innovation” in various titles (my current job title is that of an “Innovation Analyst,” after all). While sometimes ambiguous and potentially awkward, this gap is a necessary step towards our increasingly knowledge-driven society. Soon, many more companies will whole-heartily attempt to manage and formalize innovation as a necessary and vital part of business.
But my question becomes, how do we turn an existing business in the right direction? Do we simply let a business die while making way for newer, fresher start-ups? It is easy to study corporations like IBM or GE with relatively limitless resources and evaluate their successes and failures as they transition. It is also easy to look at small start-ups and the exciting change they are ushering in. What about everyone in between? I work at a company with 60 people and we have a HARD time changing anything, let alone our core business processes.
The concept of balancing incremental innovation and radical innovation explored in articles like Types of Innovation: Several Types on Many Fronts (HBS Press, 2006) suggest possible solutions. Simply put, incremental innovations are the small but significant improvements on existing products, processes or services (think improvements in computer processors). Alternatively, radical improvements are new ideas that change everything (think “disruptive technology”). Perhaps, in finding the right “mix” of these two areas, businesses will find the necessary returns to justify further innovation. For example, by proactively investing in incremental improvements to an existing product and seeing the benefits, a business may be able to realign their metrics and become increasingly ambitious. I do not see my company increasing its R&D budget to $9 billion (from its current $0), but perhaps realigning the overall organizational goals through strategic, calculated incremental innovation will help steer us in the right direction.
Would love to hear thoughts on this…