There are several major business, economic and market circumstances and trends that have forward-thinking companies exploring innovation opportunities beyond traditional new product development initiatives. The major circumstance and trends driving these initiatives include:
- Business Model Innovation – companies are exploring innovative options to transform their business models for increased competitiveness, disruptive operating models, greater connectedness with customers, and other strategic initiatives. These are high-risk / high-reward initiatives that often involve acquisitions and divestitures.
- Services Innovation – product-oriented companies are increasingly turning their attention to services innovation for competitive differentiation, product augmentation, additional revenue opportunities and increasing profits. Service-oriented companies are exploring opportunities and undertaking initiatives to innovate how they package, offer and deliver services.
- Process Innovation – economic conditions, increasing costs, competitive pressure and other factors are driving companies to take a critical look at how they do business and processes that haven't been revised or updated for many years. The opportunities for productivity, efficiency and performance improvements are tremendous. Adoption of new technologies, automation solutions and digital collaboration are frequently included in process innovation initiatives.
- Enterprise Innovation – companies want to connect innovation initiatives with corporate business objectives. This means that CEO-level objectives can be driven, propagated, managed and tracked through all areas and levels of the enterprise. This ‘top-down' approach across the enterprise for driving innovation and managing portfolios ensures that R&D and other investments align across the organization and support overall corporate objectives.
“Companies"
[are] making a conscious effort to pursue innovation. A sense that change is all around drives an orientation toward innovation in strategy and execution. This is a belief that surfaced again and again throughout the survey and interviews.”
Research from Forbes Insights and BMO Harris Bank Harnessing Innovation to Jumpstart Growth, September 2012
- Increased Operating Plan Cadence – most companies are realizing that the traditional annual operating plan (AOP) done in spreadsheets and presentations is not effective and does not systematically drive relevant action and results. Companies want to increase their operating plan review and update cadence to quarterly with integration that directly drives and connects monthly and daily operational activities with a feedback and performance loop.
- Agility – companies are exploring and developing innovative ways to improve agility in responses to increasing disruptive and unplanned events from their markets. This requires the ability to quickly assess a situation, make fact-based informed decisions and then implement appropriate actions and/or initiatives to respond quickly and constructively. The use of big data and analytics are key innovations to support an agile organization.
- Product Innovation – While companies are looking at the abovementioned innovation initiatives, product innovation is still front and center for generating sustainable and profitable growth. Many companies are finding that a large proportion of their portfolios rely on incremental innovation such a line extensions that do not produce sustainable results and contributions from these products. Sustainable gains are elusive due to cannibalization, commoditization and disruptive alternatives from competitors, particularly innovative smaller companies and start-ups. Organizations need the right tools and processes to sustain a continuous cycle of innovation and new product development to develop and bring highly innovative products to market on time, on budget and with greater performance results.
Innovation - it's more than new product development. Which of these trends and influences is your company facing? Which of these or other innovation initiatives is your company pursuing and how are they going about doing it?
Please share your thoughts, feedback and ideas on this topic.
