Innovation of products, services, processes and core competencies
Innovation is defined as ‘bringing in new methods and ideas.’ People in a High Performance Organization (HPO) are continuously innovating products, services, processes and core competencies thus constantly creating new sources of competitive advantage for the organization (see also HPO Factor: Continuous Improvement and Renewal). They rapidly develop new products, services and processes to respond to market changes. To be able to do this, they encourage creativity through cultivating an environment of learning, openness to change, challenging of old methods, an attitude of continuously seeking improvement, and an obsession with innovation. People in an HPO foster generating and experimenting with new ideas and then excel at implementing these. They continuously innovate current core activities while simultaneously developing new activities, and look for both incremental and disruptive innovations. They know what the unique core competencies of the organization are, master these and then develop and renew these. They stick to what the company does best, keep core competencies inside the organization and outsource non-core competencies.
IDEAS TO GET STARTED WITH INNOVATION
The three most important sources of innovation are employees, business partners and customers, in that order. It is therefore important to create the conditions under which these three stakeholders can be as innovative as possible. This is what you must do.
- Create space for entrepreneurship in the organization: make sure there is room for taking risks and making mistakes, create excitement for trying new things, make room for learning, actively encourage employees to come up with ideas, let people step outside well-worn organizational pathways, encourage trying unusual and ‘crazy’ approaches, ask people to do things they have never done before, welcome uncertainty and luck.
- Create space for creativity: make sure there is diversity among your employees, cherish mavericks, see customers and partners as part of your business and involve them too, make use of open source social media to involve stakeholders in generating new ideas, create an attitude of ‘it can always be improved’, don’t stop at ’very good’ but keep improving.
- Create a customer-centric orientation: don’t just listen to your customers but really understand them, their needs and wishes, their situations, their points of view, and then think about how you can address these.
- Create organizational room for innovation: clear away organizational barriers (such as rules, procedures, formal approvals, cost allocations) that prevent creating the aforementioned spaces, make resources for innovation available, and actively reward innovative ideas.
- Create room for trying out things: don’t launch a new idea on a grandiose scale but first pilot them and learn from problems and mistakes, then try again and again.
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