June 2024 Newsletter-Innovation, Part One

Key Takeaways from this newsletter:

• Definitions of innovation will be presented.
• A company that practices innovation will realize many benefits which will be enumerated here.

For this month’s newsletter I would like to touch upon the topic of innovation. 

What is innovation?

During my career I have noticed that innovation is both a desire of an organization, and a desire of the technical individuals working for an organization.  An organization is always looking for the next big idea which gives it notoriety and a new business.  For us technical folk, well, we didn’t go to college and maybe grad school to join a company  to work on just the meat and potato projects; we want to work on something cool too, and ideally something that we initiated.

Sounds good, right? Then why does it seem so difficult?

For starters, there isn’t agreement on what innovation is.  Scientists are prone to bringing an idea or prototype to light of something that their organization isn’t working on.  At that point they often think their job is done and it is someone else’s job to figure out what to do with it.  The project is worked on for a while and eventually dies.  So where did this scenario go wrong?  Was that innovation?

I have had discussions with many people on innovation and how to engender innovation, but you need a good definition for starters.   The following are definitions that resonate with me, and again as we all struggle with innovation these may not be the best.

The first is a definition from Wikipedia.(1)  “Innovation is the practical implementation of ideas that result in the introduction of new goods or services or improvement in offering goods or services.” The first key component in this definition is the “practical implementation of ideas.”  Innovation is not simply having a cool idea or designing a cool prototype in the lab.  That idea has to be moved into the marketplace by “practically implementing” it.  But that isn’t enough.  The product has to be new or has to offer an improvement in goods or services.  I don’t agree with it being just “new” as it can be new and not have any customers, so that part of the definition needs a little work.  But an idea that leads to “an improvement in goods or services” can work as part of a definition as this clause presumes a market already exists.

A second definition is from The Knowledge Academy.(2)  “Innovation is creating something new or improving something existing that adds value or solves a problem for customers, users, or society. Innovation can be a product, a service, a process, a business model, a strategy, or a social movement. Customer needs, market opportunities, technological advancements, or social changes can drive innovation. Innovation is not the same as invention, which creates something new that has never existed. Innovation can involve invention, but it can also involve adaptation, modification, or combination of existing ideas or solutions.”  Again, this definition points out that innovation must add value or solve a problem.  And invention alone is not sufficient for innovation.

These two definitions are similar and point out that innovation solves a customer need or provides for a customer want.  To focus on the customer is to take a customer centric approach.  Too often us science types act in a product centric way; we focus on something that is new before concerning ourselves with a potential market.  A better way for the technical people and a technical organization to operate is to look for unmet needs or wants and then work backwards toward potential technologies that could address the need or desire of the customer.

Why is innovation important?

To reiterate from above, all organizations would like to be innovative, and the technical staff within  those organizations would like to be innovative too.  However, innovation is more than a desire; it can be critical for an organization’s survival.  The following benefits of innovation are taken from IMD (International Institute for Management Development).(3)  Companies that innovate are better equipped to:

1. “ Gain a competitive advantage. Innovation can help you develop unique products and services that set you apart from competitors.”  Innovation will help keep your organization ahead of the competition, relevant,  and top of mind.
2. “Meet customer demands.  Businesses that try to better understand and respond to customer needs through ongoing innovation do a better job attracting new customers and retaining existing clients.” Companies that innovate are by definition more aware of their customer needs and desires.
3. “Drive business growth. You’ll position your company to better identify and seize new opportunities. You may also create opportunities to diversify revenue streams or expand into new markets.”  New products and services that make their way into the marketplace will add to the top and bottom lines.
4. “Increase efficiency and productivity. Innovation can result in increased productivity as you find ways to improve existing processes, streamline operations, and implement new forms of technology.”  Innovation isn’t just about introducing new products.  An innovative culture will lead to process efficiencies too. 
5. “Deal with changes. Rather than reacting to changes that catch you off guard, you’ll be better prepared to identify emerging trends and anticipate shifts in the market in advance.”  Companies that innovate will be closer to customer needs and desires.  When a new trend is emerging, the innovative organization will be first to market as opposed to playing catch up.
6. “Attract and retain talent. You can create an environment that engages your workers and results in higher levels of job satisfaction and employee retention. Many top companies give their employees a designated amount of time each week to work on product innovations.”  A company with a reputation for innovation will be more likely to attract top talent, the talent that will have the tools and the drive to develop innovations for the company.
7. “Promote resilience and sustainability. Your business will be equipped to navigate economic downturns and changing consumer behavior.”  New products will lead to more sales which will help out during a downturn.  And if the appetite of the consumer changes, an innovative company will adapt to those changes.

A company that practices innovation and realizes these benefits will be an industry leader and ensure their long-term survival.  Now that we have a better idea of what innovation is and what its benefits are, how do you actually make your organization more innovative?  That will be the subject of Part Two.

(1) Innovation - Wikipedia  Innovation Wikipedia entry.

(2) What is Innovation? A Detailed Explanation (theknowledgeacademy.com)  Sienna Roberts, “What is Innovation?  An Introduction,” The Knowledge Academy (website), December 8, 2023.

(3) Innovation in business: Importance, benefits, & examples (imd.org)   “Innovation in Business: Importance, Benefits & Examples,” “IMD (International Institute for Management Development-website), April 2024.

(photo credit: Lil Artsy)