Many people think that innovation is related to technology. I would argue, however, that while technological inventions may be innovative, innovation can take place in the realm of the non-technical, also. Does that mean that people and organizations can innovate almost anywhere?
This is the second part of a series of four articles on innovation. This article, Part 2 in the series, “Where to be Innovative“, identifies that innovation can take place anywhere…but needs to be prioritized. Part 1, “What Is Innovation?“ looks at a number of definitions and perspectives on innovation and tries to isolate what innovation really is. Part 3, “Keys to Innovation Success“, looks at the preconditions and critical execution factors for innovation success. Part 4, “How to Be Innovative“, looks at how an organization can intentionally be innovative.h
Innovation can occur in many areas. I picked out five broad areas in an organizational context:
- Process innovation – how the flow of work or movement is structured. This is where supply chain opportunities can be explored. There are also big opportunities in areas where the business interfaces with the customer, such as the sales process, or customer support process.
- Product innovation – focusing on the ‘what’ – and how to make it better. If a company’s primary strengths lie in their products, they will need to intentionally innovate in this area to maintain and extend their position in the marketplace.
- Technological innovation – where to apply new technologies to replace old ways. Most businesses need to evaluate technologies to some extent for opportunities to improve their businesses. Usually this occurs in functional areas such as operations, marketing, administration, and finance.
- Administrative innovation – how to streamline admin functions for greater value. Performing the administrative function more efficiently will always add value. However, the biggest impact will likely be from improving the service provided to consumers of administrative services so that they can do their jobs better.
- Financial innovation – rethinking financial considerations for greater return. How the business is financed, how it deploys its cash, how it handles financial transactions – these are all areas worthy of investigating to improve financial performance.
These areas are by no means exhaustive; the point is that innovation can occur almost anywhere.
And the key is to pick the areas to innovate where innovation might produce the greatest positive impact and at the lowest risk.
An important consideration is the organization’s reason for existence – its purpose and key competitive advantage. Some businesses exist because they have a great product, some have a special process, some have a special reputation in the marketplace. It’s important to understand the core strength of the business and innovate from there.
And that goes back to the organization’s strategy. What are the key leverage points in the business? What are the strengths, weaknesses, opportunities, and threats? The answers to these questions will reveal where the intentional innovation efforts will yield the greatest benefit.
What are the top three areas where intentional innovation could yield the most benefit in your organization?
This Post is Part of the Series: Innovation
This series of four articles teaches about innovation.