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Successful Organisations innovate constantly

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I had previously tried to differentiate between inventors and innovators. (Why Innovators earn more than Inventors?). Now I am trying to focus on the directions in which innovation can be looked upon for succeeding. Because today as such innovation features in mission statements of every major forward-looking organisation’ in the world, but then there are not so many success stories doing rounds about them. What is missing? How are companies failing on their mission statement? Is innovation failing? No, it can’t be. Is a myopic vision related to innovation becoming its undoing? May be. Then it has to be a broad-based. Innovation is the way forward for success but it has to be a business innovation to succeed. Now what is this new term, business innovation? Lets see…

Mohanbir Sawhney, Robert C. Wolcott and Inigo Arroniz in their 2006 article, The 12 Different Ways for Companies to Innovate in MIT Sloan‘s magazine defined business innovation as the creation of substantial new value for customers and the firm by creatively changing one or more dimensions of the business system. This definition led them to the following three important characterizations of innovation.

  1. Innovation is relevant only if it creates value for customers and by extension for the firm. It makes no difference how innovative a company thinks it is. What matters is whether customers will pay.
  2. Innovation can take place on any dimension of a business system. For example Home Depot Inc., focused on an under-served customer segment while Jet Blue Airways Corp. offered a better customer experience and yet Cisco Systems Inc. had improved its margins through process innovations. Business Innovation comes in many flavours and every flavor is to be savoured.
  3. Successful business innovation requires the careful consideration of all aspects of a business. A great product with a lousy distribution channel will fail just as spectacularly as a terrific new technology that lacks a valuable end-user application to reap its benefits.

So in how many directions and at what parts of a business can one focus on to innovate? How can the innovation myopia be removed? Lets see what they had to say. Following are the dimensions that they talk of in the article. I will briefly touch on them.


Innovation on this front is the most visible and most focused upon. It requires the creation of new products and services that are perceived to be value generating for customers of the moment.


To innovate along this dimension, the company has to re-look at its customers in a new light. They have to discover new customer segments or uncover unmet (and sometimes un-articulated) needs and fulfill them.


A solution is an integration of products, services and information that satisfies a customer’s need. Innovation across this requires a greater integration through the breadth and depth of assortment of different elements.


A company can redesign its processes for greater efficiency, higher quality or faster cycle time or even re-looking at the entire business delivery chain and customizing it so that the benefits of speed to market, access to full potential of an ever competitive talent pool and the freedom and flexibility to remodel as per the strategic requirements are realized.

Value Capture

In other words, identifying potential sources of revenue. A company creates value in every business process it undertakes to deliver a product, but it charges for the product only. To innovate along this dimension, the company can discover untapped revenue streams, develop novel pricing systems and otherwise expand its ability to capture value from interactions with customers and partners.

Supply Chain

A supply chain is a stream of connections that moves goods, services and information from source to delivery of products and services. Innovation here can be in form of streamlining the flow of information through the chain, changing its structure or enhancing the collaboration of its participants. An example – Is Effective Operation Management behind success of Apple?

Points of Presence

Points of presence are the channels of distribution that a company employs to take offerings to market and the places where its offerings can be bought or used by customers. Innovation in this dimension involves creating new points of presence or using existing ones in creative ways.

Customer Experience

For innovation in this direction, companies will have to rethink their interface between the organization and its customers to deliver a more complete and satisfying interaction experience.


They are the symbols, words or marks through which a company communicates a promise to customers. The company has to leverage and constantly strive to extend its brand in creative ways to keep it fresh and inviting to its customers.


Organizational innovation often involves rethinking the scope of the firm’s activities as well as redefining the roles, responsibilities and incentives of different business units and individuals. Bring excitement by constantly changing and improving ways of doing business.

Innovation happens never along one dimension, always more dimensions and directions become involved. Only by being consciously aware of it and striving towards each of them can a firm increase its innovation quotient. Traditionally most firms’ innovate on the lines of what the whole industry is looking doing or what they have been doing in past. It’s a paradox that, they are looking at change without changing the way to look.

But when a company identifies that and pursues innovation in each of the directions, that others may have not even thought of, it can change the basis of competition and leave other firms at a distinct disadvantage. This looks dramatic because each direction requires a different set of capabilities that needs to be developed from scratch and when they reap the benefits, the competitors are dumbfounded. Apple has been very much successful at this (How to Innovate Like Apple).

In that article, Mr Chris Morrison gives a crash course on how to be successful like Apple at innovation. He basically gives the following 4 tips.

  1. Clear Your Mind
  2. Build Your Fortress
  3. Cultivate Your Elite
  4. Don’t Rush, Don’t Dawdle

As such they look random. They aren’t. I won’t brief about it as such this post has become too long already. So to know more read the article by clicking on that link. It’s definitely worth your time.

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