Hi and welcome to week 5 where we will be discussing innovation and competitive advantage.
So what exactly is innovation? Wikipedia defines innovation:“as a new idea, device, or method."
However, innovation is often also viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs”. Quite often people think that innovation is only coming up with something new but innovation can also be just looking at a different way of doing things that can lead to an efficiency in the business. So, as the management text states “innovation in and by organisations occurs in two broad forms: process innovations, which result in better ways of doing things; and product innovations, which result in the creation of new or improved goods and services” (Schermerhorn et al. 2017).
To come up with different ways of doing things or to create a new product or service requires a level of creative thinking and providing people with the time and freedom to think. In this busy and ever changing environment that we work in, quite often managers are expecting team members to be creative but don’t provide them with any time or a format in which they can be creative.
One example is the simple brain storm session. Bringing people together for an hour or so to brain storm an issue or problem can have a far greater success rate to solve the issue than someone trying to solve problems off the side of their desk when they aren’t given the time to think through the issues properly.
In my previous role I used this technique quite a bit as I am a strong believer in many heads will beat one head every time! Managers need to be looking at ways to create an environment that allows for team members to be creative and to come up with new ideas and be supportive of team members and make sure they follow through. What I mean by following through is that the ideas that the team come up with are implemented or feedback is provided back to the team member as to why an idea was not implemented. If team members come up with ideas and then nothing happens, soon enough the ideas stop coming.
My previous employer was extremely supportive of creativity in the workplace even to the extent that an incentive program was introduced for all employees. This consisted of a monetary reward if employees were able to creatively find ways to decrease the operational costs of the business. A target was put in place and if employees collectively met that target each year they were given a bonus. To make it fair for the employees that were actually coming up with the new ways of doing things that saved on operational costs, the employee was given a gift voucher as well as receiving the bonus if targets were met.
When looking at an innovation process for an organisation the management text provides Hamel’s wheel of innovation which includes the following five steps:
1. “Imagining – thinking about new possibilities; making discoveries by ingenuity or communication with others; extending existing ways.
2. Designing – testing ideas in concept; discussing them with peers, customers, clients or technical experts; building initial models, prototypes or samples.
3. Experimenting – examining practicality and financial value through experiments and feasibility studies.
4. Assessing – identifying strengths and weaknesses, potential costs and benefits, and potential markets or applications, and making constructive changes.
5. Scaling – gearing up and implementing new processes; putting to work what has been learned; commercializing new products or services”. (Schermerhorn et al. 2017).
In your e-portfolio using the three phases of reflective thinking, where in your workplace have you demonstrated innovation or creativity?
Please watch the following clip by Ken Robinson and answer did you grow out of creativity or not?
Ken Robinson | Do Schools kill creativity | 19.24 mins
So we have spoken a bit about innovation and creativity but we also need to cover off on disruptive innovation. Wikipedia defines disruptive innovation as “an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leading firms, products and alliances”. A couple of examples of disruptive innovation are Uber and AirBnB. The following clip provides a case study of Uber and AirBnB.
Discovery 15: Disruptive Technology Panel: Uber & AirBnB Case Study | stop at 23 mins
An organization that has a culture of innovation will leverage off that to gain competitive advantage. The management text defines competitive advantage as “anything that a firm does especially well compared to rival firms” (Schermerhorn et al. 2017). Competitive advantage is key component to the survival of any organisation but how does an organisation go about developing competitive advantage? Please watch the following clip that provides some insight into developing competitive advantage.
How to Develop Competitive Advantage | 3.30 mins
Please watch this clip by Professor Julian Birkinshaw who outlines how competitive advantage has changed from the industrial era to the knowledge era and beyond.
The changing sources of competitive advantage | 15.18 mins
Creating competitive advantage is not just for the private sector, please watch the following interview with Donna Bain, CEO of Self Help workplace
Please proceed to the series of Donna Bain interviews
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