When a corporation reflects on its business strategy, ‘innovation’ is one of the most repeated words in the analysis.
A recent article published by MIT argues that innovation is not, in itself, a strategy for transformation or to improve business, but rather an instrument at its service.
In particular, the article defends the impact of innovation on three important variables in corporate transformation:
– Direction or detecting the need to make changes in a business.
– Activity or adopting new ways of doing things to reach goals.
– Magnitude, understood as its association to positive measurable results.
Netflix is a paradigmatic example that illustrates a radical change in the business model (direction) for the same marketed product (audiovisual content) but a different format (rental DVDs vs. streaming), and an emphasis on user experience: from home, using algorithms to recommend content… (activity). The result (magnitude) is a staggering penetration in homes half-way around the globe.
In contrast, the video rental chain Blockbuster illustrates the other side of the coin, and how remaining static around one business only can lead to a company’s disappearance.
Strung together, the three variables have a high impact and highlight the need to stimulate corporate innovation as a key element in a company’s evolution and competitiveness.
Is it only innovation if it yields results?
That said, to bring the three variables together, organizations need to answer two questions:
Is the change adapted to the objective? In other words, are the time and effort invested adequate, do they enable the organization to meet expressed needs?
And: Are the advantages found sustainable over time? Which is to say, does innovation’s direction and activity enable lasting magnitude, or new iterations that continue to provide competitive differentiation?
Whoever is capable of fine-tuning both variables, according to the article, will achieve magnitude and maximize returns with less effort.
For their part, those who obtain only a relative advantage, fruit of not adjusting to the aim, will only be able to change some part of how they do things, without achieving notable results.
Lastly, those lagging behind and slow to respond will merely get a glimpse of the need to transform their business but will be unable to pinpoint where and set in motion the pieces to do so, let alone adapt or differentiate themselves.
The process of linking our reimagined business with a new transformative model for operations, in a positive sense, entails a new way of doing things at the organization level, and a strategic alignment of all people in the organization with the new aims.
The use of corporate innovation programs allows for innovation that is linked to the various objectives and areas within an organization in transformation, involving all its people in that transformation and facilitating change in a new direction, activity around that new direction and, most importantly, magnitude.
Free eBook: features and keys in the launch of an innovation program