Innovation - the Solution to Business's Real Problem: Uncertainty

Abstract

As much as we desire control and predictability, uncertainty is a permanent fixture in business. While conditions may seem unfair at times, it’s important to remember that most people are exposed to the same effects.

Constant and evolving influences are putting pressure on decision-makers to act in much shorter timescales than most leaders would like. The ‘interconnectedness’ of business, driven by globalisation, means that something happening in one part of the world can have an immediate impact on organisations elsewhere.

An event occurring in one country is instantly reported around the world and stories are accessible via the internet almost in real time. The net result is that there is frequently little or no opportunity for reflection before important decisions need to be made. Surviving and thriving in this environment demands a different mind-set and new attributes in today’s leaders. The answer is Innovation either following them and eventually acquiring them or encouraging innovation inside and facilitating swarming.

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The main competition in business, in the past and now, always comes from innovation. What’s less certain to companies is how to respond. This, however, can be a great opportunity. Many firms have converted problems into opportunities only because of their R&D efforts. These companies eventually became technology leaders as they created a churn in the market.

The world is moving on only through scientific inventions and discoveries which are result of sustained R&D effort. Only this leads to long term business sustainability. By changing to the environmental needs, social needs, tastes and preferences of customers companies can come out with successful innovations and sustain in the business for the long time.

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Today’s mantra for uncertainty is change innovation. Change is the only permanent solution for business uncertainty, vulnerability, complexity and ambiguity.

(Keywords: Innovation, uncertainty, opportunity, change, problems etc.)

Introduction

As much as we desire control and predictability, uncertainty is a permanent fixture in business. While conditions may seem unfair at times, it’s important to remember that most people are exposed to the same effects. There are transformational entrepreneurs who generate some uncertainty in business. This uncertainty must not be exaggerated it is relatively low for incumbent business but is increasing and thus must be considered. One way of dealing with this non-probabilistic uncertainty is to have an adequate decision policy regarding the uncertainty, and the answer is Innovation, either following them and eventually acquiring them or encouraging innovation inside and facilitating swarming.

Why Innovate?

Entrepreneurs and business leaders are constantly striving to get ahead. One of the major “tools” in the toolbox of every business leader is innovation. Innovation often provides a much needed competitive advantage. That is because we recognize that innovation demands change and change is always challenging. Change is especially difficult when things seem to be “good enough”, because changing “good enough” requires us to take a risk. That said, it is true that innovating is risky business. In the face of making a change, we must let go of “good enough” to potentially gain a competitive advantage.

The reality is, however, that refusing to change is far, far riskier. For example – can you imagine a bank not offering mobile banking? Or an electronic store that doesn’t sell the newest gadget? As consumers, we intuitively understand the importance of businesses keeping up with changes, but as entrepreneurs and business owners, it can be difficult to risk “good enough” to face complex changes that require a great deal of time and resource to implement.

Innovate Anything

The truth is, innovation doesn’t have to be difficult. Innovation is actually so simple that it can be applied to anything.

The following are examples of success through innovation:

  • Technology companies triggering a paradigm shift by impacting industries

A. Apple – changed music and consumer electronics

B. Uber – changing the taxi business

C. Airbnb – changing the accommodation industry

D. Amazon – changing retailing

  • Technology companies creating new markets / industries

A. Google – with “ Search, etc. ” for a much better online experience

– changed the Advertising world with Adwords

– impacting the mobile, car, utility, etc. industries

B. Facebook – established the ” social network ” market

C. WhatsApp – established the personal communications market

D. Steam – established the online market for licensing games

Understanding Innovation Management

What besets today’s companies? Is it a lack of innovation or an inability to cope with change? Or, is it the incompetence that underlines the failure to anticipate change and stay ahead of the curve? Either way, businesses need to identify where they are going wrong because innovation as a business strategy is here to stay. The rules of the game have changed. Traditional practices and concepts do not hold water anymore.

For survival, innovation is almost obligatory (Drucker, 1999). An innovation process “connects upstream idea valuation to downstream production and release to market.” Once a well-defined innovation strategy that aligns with business goals is in place, the next step will entail managing it effectively. Like any business function, innovation can be managed.

“Innovation Management is about more than just planning new products, services, brand extensions, or technology inventions. It’s about imagining, mobilizing, and competing in new ways,” says Idris Mootee, author of Design Thinking for Strategic Innovation.

This discipline of managing the innovation process harnesses creative ideas and uses them to build a steady pipeline of innovations that are reliable, repeatable, consistent, and profitable.

Innovation management programs for different companies will vary significantly. For instance, an emerging business is likely to be focusing on one main product, unlike a mature organization that is looking to fortify its position in the market or find new, disruptive innovations. Rapidly growing firms could be looking for ways to extend their core businesses. Deciding between developing new innovations for the future and revitalizing their existing offerings can be tricky.

Finding the right balance is key.

Importance of Innovation Management

Innovation plays an important role in an organization’s success. Market leaders derive a significant proportion of their income from new products, according to Forbes. Innovation can take the form of a major breakthrough or incremental improvements to existing products. Solid management can help organizations encourage and support innovation and realize the commercial benefits from it.

Stimulating Innovation

Organizations can encourage employees to innovate by allocating time and rewarding effort. ‘3M, the company that pioneered scotch tape and post-it notes, derives up to 30% of its revenue from products launched in the past 5 years,’ The turnaround time for new products in toothpastes (dental care products) has considerably shortened. Many firms have converted problems into opportunities only because of their R&D efforts. These companies eventually became technology leaders as they created a churn in the market.

All the modern inventions –laptops, palmtops, music players, iPods, mp3players, automatic washing machines, dishwashers, water filters are all examples of R&D efforts that had a successful outcome. Who would have thought that mosquitoes would provide an opportunity for new product development in the form of mosquito mats, repellent creams, vaporizers etc.

Digital photography has made the conventional technique redundant. Computers have confined the typewriters to the museum. E-mail has rendered the snail mail defunct.

The world moves on only through scientific inventions and discoveries which are result of sustained R&D effort. Only this leads to long term business sustainability. Sometimes R&D efforts are also necessitated to meet the regulatory norms eg: green technologies that reduce pollution. Hybrid cars, electric cars, catalytic converters in cars are examples of successful R&D efforts.

Some companies are technology leaders, while others are followers. Some industries prove to be laggards (they are the ones to wake up to the market realities a way bit late).

Ten Ways to Innovate:

  1. Look for opportunities.
  2. Be courageous.
  3.  Look for new ventures.
  4.  Find a better way.
  5.  Base it on values.
  6. Outsmart the competition.
  7. Solve a problem.
  8.  Recycle and reuse.
  9.  Maximize scarcity.
  10. Create a brand.

How to Manage Innovation

Innovation has become management’s new imperative. Everybody wants to be the next Apple, Google or Netflix, nobody wants to be Kodak, Blockbuster or US Steel. These days you must, “innovate or die,”. You’ll feel inspired, then scared and try to innovate that suits your business.

A clear set of principles for action are needed. What good is Steve Job’s unfailing design sense? when I can’t even get my outfits to match? How can Google’s technological supremacy be relevant to me when I can’t even figure out my TV remote? In other words, we need to take innovation down from the presentation screen and into working life. Here’s how to do that.

Top of Form

Six Key Levers To Succeed In A VUCA World

For succeeding in a VUCA (volatile, uncertain, complex and ambiguous) world. stringent action towards the execution of six key operational and strategic levers can come in handy.

  1. Operational excellence the number one factor. Companies such as Maruti Suzuki have set an example, wherein the CEO has greatly reduced the distance between the team leader and the team. The attention and obsession to detail has helped in creating a virtuous cycle that has helped the company.
  2. The second is innovation. Understanding the complex Indian consumer and then addressing need gaps is key. the Godrej example here, in is Godrej’s innovation with hair cream. ‘The company went a step forward, and understood the process to the extent that at the end it was able to offer hair cream at one-third the market price. It is not producing for the rich but for a larger mass,’.
  3. Choices and tradeoffs is the third important lever. Companies have to understand and accept that they cannot be everything to everyone. ‘Everyone wants to be a conglomerate, but it does not work for most people,’. An example of a company, that made the hard choice but benefitted in the long run, is Bajaj Auto. Bajaj knew that it cannot succeed in both motorcycles and scooters, and choose serve the larger segment of motorcycles, and then focused on it to get it right. ‘Now, Bajaj Auto is number one or two in the 66 markets where they are operating in. They may not have the highest numbers of sales, but has the highest profits,’.
  4.  The next is alignment. In a conglomeration of countries and cultures, ensure the people understand company and its value proposition, which is very critical.
  5. The next thing the organizations require is Leadership and courage, and their leaders capacity to take calls on what to do and what not to do is another lever.
  6. Finally, agility and serendipity are also here to play their role. companies are required to excel along these six levers to succeed in India and in global markets.

Conclusion

“Innovation Management is about more than just planning new products, services, brand extensions, or technology inventions. It’s about imagining, mobilizing, and competing in new ways For survival, innovation is almost obligatory (Drucker, 1999). An innovation process “connects upstream idea valuation to downstream production and release to market.” Once a well-defined innovation strategy that aligns with business goals is in place, the next step will entail managing it effectively. Like any business function, innovation can be managed.

Organizations can encourage employees to innovate by allocating time and rewarding effort.

Innovation has become management’s new imperative. Everybody wants to be the next Apple, Google or Netflix, nobody wants to be Kodak, Blockbuster or US Steel. These days you must, “innovate or die,”. You’ll feel inspired, then scared and try to innovate that suits your business. A clear set of principles for action are needed. In other words, we need to take innovation down from the presentation screen and into working life.

Bibliography

  1. Bobe, B. (2002). Nouvelle économie, Mythe ou réalité [New economics, myth or reality?].ISUMA, printemps , 2002 , 17–23.
  2. Brézillon, P., Pasquier, L., & Pomerol, J.-C. (2002). Reasoning with contextual graphs. European Journal of Operational Research, 136, 290–298.10.1016/S0377-2217(01)00116-
  3.  Schumpeter, J. A. (1974). Capitalisme, Socialisme et Démocratie . Paris: Petite Biblliothèque Payot.
  4.  Indian Management,vol58,Issue 3,pg no 39-41
  5.  https://economictimes.indiatimes.com/news/economy/indicators/uncertainty-and-volatility-greatest-challenge-for-indian-companies-report/articleshow/50188836.cms
  6.  http://fortune.com/2012/08/08/businesss-real-problem-uncertainty-uncertainty-uncertainty/
  7. www.businatomy.com.
  8.  https://www.bain.com/insights/challenges-and-growth-strategy-in-an-era-of-continuous-uncertainty-the-economic-times/
  9.  http://timkastelle.org/blog/2013/03/a-brief-introduction-to-uncertainty-in-business/
  10. https://www.inc.com/magazine/201904/helaine-olen/customer-client-wrong-complaint-conflict-satisfaction.html

Cite this page

Innovation - the Solution to Business's Real Problem: Uncertainty. (2021, Feb 05). Retrieved from https://studymoose.com/innovation-the-solution-to-business-s-real-problem-uncertainty-essay

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