Updated: Jun 28, 2019
Source: Assink 2006
Recently, I came across an advert that said in very bold letters Automate = Innovation. It just horrifies me to realize that many consider innovation being equal to automation.
Innovation is firstly, not a fancy/shiny new thing. Innovation may include automation, but the reverse, may not be true. Automation is not necessarily an innovation.
Many are confused between the concept of differentiation and innovation. Differentiation is the process of providing higher buyer value than others. This typically entails higher cost and would mean higher quality as well. It could very well be that you make a higher margin on such products/services. This is represented by the solid line in the curve below. Value innovation on the other hand means moving to a different cost - value frontier; you could be providing more value at a lower cost. Automation may get you there but not necessarily true.
Source: Renée Mauborgne and W. Chan Kim (Blue Ocean Shift)
Creating value innovation requires an organization to go beyond the combination of existing markets and existing capabilities.
1. You must create disruptive business practices in a new market (not geography) using existing process/technology/capabilities
2. Introduce disruptive technologies in your existing market using new concepts, process or technologies.
Ofcourse if you are technology led organization, you could work on breakthrough innovation that targets new markets as well as new technologies.
None of this is serendipitous activity. Creating value innovation on a sustainable basis requires organization to have a robust innovation management system. Magnus Penker and others at Innovation360 have studied what innovative capabilities must be in place to explore and commercialise modern opportunities. The framework developed by them provides one of the most comprehensive approach to building innovation capabilities in an organization.
Source: The Innovation360 Framework, Magnus Penker 2011(c)
Innovation isn't a shiny new thing, it's not the province of a few creative minds and it's not the output of an exclusive "innovation lab". Innovation is a systemic activity where organization need to have a clear strategy and approach, the right leadership and processes. Luckily, these can be developed by any organization.
If you would like to explore this topic further or understand how your organization can build it's innovation capabilities reach out to firstname.lastname@example.org (+919791033967) or email@example.com.
The author is a management consultant, who focuses on innovation management and blue ocean strategies. He can be reached by at Krishnan@thinkhorizonconsulting.com or by phone: +919791033967. Check out our website www.thinkhorizonconsulting.com