Creativity and Innovation are the key drivers to organizational success. Change is the inevitable result of this creative and innovative process.
Why is it important to understand the process of creativity, innovation and change? Today’s reality dictates that only those organizations that embrace creativity and innovation management will achieve sustainable competitive advantage in the market place. Peter Drucker, a great management thinker said; “I have continued to stress over the years that organizations that do not innovate will not survive”.
Successful innovations, on the other hand create change in the marketplace and in society. Just think of innovatively disruptive companies such as Uber, Airbnb, Facebook, and many others. In fact, it can be said that innovation isn’t about creating new products. Innovation is really about changing behavior.
However, merely aiming to create change is not enough. Businesses must make the “right” change by choosing the right ideas, create the right products, develop processes that will improve performance, create services that add value and create products that consumers want.
The above statement begs the question; What is the path to desired change?
The chart above shows that first we start out with creativity. We create and invent new ideas and new concepts. We let our imaginations go wild. Whether we use divergent thinking, improvisation, or an aleatory technique, the methodology used is up to the inventor. However, ideas are only the raw material for innovation and change. Ideas do not by themselves guarantee desired change or transformation.
The next step is to embark on a process of critical thinking. We must select the creative ideas that we feel are worthwhile. After we select an idea we feel strongly about, we begin the process of turning that bit of creativity into a product, a service or a process.
If the product, service or process that has been created engenders change in the market place, then and only then can we say we have been successful. A successful innovation is always tied to the question of how markets behave.
“When Apple created iTunes it didn’t just create a faster, cheaper, better digital format for music, it altered the very nature of the relationship between music and people. eBay did not just create a platform for auctions, it changed the way we look at the experience of shopping and how community plays a role in the experience”. (Thomas Koulopoulos 2012)
While creativity is the generation and development of new and useful ideas, innovation is the realization and implementation of those ideas. In other words, if a scientist has a number of ideas on how to build a household robot, this scientist is being creative. However, once the scientist applies those ideas to build that household robot, that is when innovation is employed. The scientist is now an innovator.
Understanding the various levels of innovation, will allow us to some degree predict the degree to which our product, service or process will have an impact on the market place, even on society.
In a broad perspective, we can define four levels of innovation based on the degree to which value and newness is added to the product, service or process. These levels of innovation are:
- Small changes generally based on established knowledge.
• Refinements and modifications to existing products, processes or services. i.e., improvements to television picture qualities.
• Middle-range innovations more significant than simple improvements. i.e., going from black-and-white to color televisions.
• Changes the nature of interactions between core components, while reinforcing the core design concepts.
• Changes in the ways different things are put together into a whole system.
•New technologies replace old existing technology. i.e., Fax machines replacing telex machines. Email replacing fax machines. Radical innovations are for the most part new inventions that can be market disruptive.
We can also view innovation from the perspective of how they affect change. This view is particularly useful today with the advent of disruptive technologies and companies such as Uber, Airbnb, and others.
Incremental innovations involve modest changes to existing products and services. These are enhancements that keep a business competitive, such as new product features and service improvements.
Breakthrough innovation refers to large technological advances that propel an existing product or service ahead of competitors. This is often the result of research and development labs (R&D), who are striving for the next patentable formula, device and technology.
Disruptive innovation is a term coined by Clayton Christensen in his best-selling book The Innovator’s Dilemma, in which he shows that disruptive innovations “result is worse product performance, at least in the near-term. [They] bring to a market a very different value proposition than had been available previously” It describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.
Game-changing innovation transforms markets and even society. These innovations have a radical impact on how humans act, think and feel in some way. Innovations that reach this level are always able to define a new category and fulfill an essential unmet wish or need consumers have.
Types of innovation
Lots of people in manufacturing think of innovation as improving or creating a new product. Those in the service industry, think in terms of the services they offer. However, there are other areas in the public or private sectors where innovation can take place to create or improve offerings.
· Consumer, commercial and industrial products of all types.
· Service innovations
· Hotels and other places of lodging
· Personal services (including dry cleaning, tax preparation, and hair cutting)
· Business services (including temporary agencies and business software developers)
· Automotive services
· Miscellaneous repairs
· Amusements and recreation
· Legal services
· Private education
· Social services
· Membership organizations (including houses of worship and clubs)
Process innovationsJust-in-time inventory management.
• New organizational structures.
• New ways of performing work.
• Business entity
• Corporate governance
• Finance and accounting
• Management innovations
• Changes in management structures.
• Project management
Market or position innovations
- Product life cycle management
- New markets development
- Market positioning