Director's Message

Innovation is Everywhere

By Jim Shillenn, IRC Network Director

If you pick up any business magazine or recent book on business management, you can't help but observe that the word “innovation” permeates nearly every edition. Whether it's strategy innovation, management innovation, product innovation or process innovation, we are all starting to get the message that innovation should be a core business process in our organizations just like accounting, production, quality, marketing, sales or distribution.

While making the decision to be an innovative firm versus a mediocre firm may seem to be relatively easy, the business challenge is determining what innovation really means and how to implement and manage innovation.

Innovation is nothing new. Consequently, there is a long history of documenting, communicating and honoring innovation. What typically gets firmly embedded in our minds from these accounts is that innovation means bold, breakthrough inventions or disruptive discoveries that create a dramatic shift in technology-producing Nobel Prizes for scientists and handsome profits for companies that introduce the innovative products to the marketplace.

For a company with no R&D department or no chief innovation officer, this view of innovation can be discouraging and disheartening creating an environment where being a cost-driven, low-margin firm seems like the only option.

Unfortunately, the concept of innovation has been described from this point of view much too frequently, leaving many businesses to be confused about what innovation really means and often seeing innovation as irrelevant to their day-to-day struggle to compete. Fortunately, innovation has a much broader meaning and application in the business world than it does in academic, entrepreneurial or big company research labs.

Innovation can be applied to a whole range of business processes in your organization. It can involve the implementation of multiple levels of change from incremental process changes, which impact the bottom line, to breakthrough products that can move a company from a small, privately held firm to a Fortune 500 firm that is a bellwether for the major financial markets.

Definitions vary for the concept of innovation, but the common elements of most definitions include something new or creative that is implemented and results in a positive outcome, which builds value for the business. With this perspective, innovation can be applied to any business process, including administrative processes, manufacturing operations, quality, marketing and sales, human capital and workforce development. It can also be applied to establishing collaborative partnerships, developing new services and the more traditional way of thinking about innovation in the area of developing new products.

Innovation cannot succeed if it is structured as a sporadic initiative that gets attention when things slow down or desperation is taking hold. It's not a process that consists of putting a suggestion box in the break area or waiting for a flash of brilliance from your sales manager. For innovation to be successful, it must be structured like any other business process so that innovation becomes as natural to the company as reviewing sales figures. Many companies have learned the hard way that unsystematic efforts produce disappointing results.

Innovation is not free. It involves investment in time to determine which ideas have the most value and costs money to implement. Companies invest many millions of dollars in equipment, quality, HR and other operating processes. Astonishingly little investment and attention goes into processes for innovation.

For innovation to work, leaders must also create an environment where ideas are encouraged and rewarded and they must be able to listen to not only their customers and sales force, but to every person who works in their company. If your company culture is based on all ideas coming from the top, you will need to implement remedial changes to company culture before meaningful innovation can happen.

How does your company begin to implement innovation? Fortunately, there are many books and other resources available for how to introduce and manage innovation in your firm. The cover story on page six provides some additional perspective on how to implement innovation and resources that are available - like Pennsylvania's Industrial Resource Centers (www.pairc.net), which can help establish your innovation process.

Ultimately, becoming an innovative and successful firm is a matter of leadership. It begins with a clear vision for success and valuing the ideas and creative energy of the people who work for you. It involves discipline and a commitment that doesn't throw in the towel at the first failure or idea that falls short of expectations. Innovation is a continuous process and an investment that is virtually guaranteed to eventually pay off.