1. Innovate, Innovate, Innovate.

Economic activity is driven by change by a constant flow of new products and services
created by self-interested. As new products and services are produced, old ones fail and
disappear. New companies come into existence constantly, replacing old ones that sink
into business oblivion.

1.1. What is innovation and why does it need to be renewed?

Innovation refers to creating more effective processes, products, and ideas. For a
business, it could mean implementing new ideas, improving services or creating dynamic
products. It can act as a catalyst that can make your business grow and can help you adapt
in the marketplace.

By innovation, we mean changing your business model and making changes in the
existing environment to deliver better products or services. Successful innovation should
be a part of your business strategy, where you can create a culture of innovation and
make a way for creative thinking. It can also increase the likelihood of your business
succeeding and can create more efficient processes that can result in better productivity
and performance.

Changing technology and constant innovation make it extremely difficult for companies
to survive and prosper over any substantial period of time. Technology continually
proves to be a driving factor in the need for change. To quantify the recent impact, look
at the facts:

 90 percent of the world’s data has been created in the last couple of years.

 More than 570 new websites are created every minute.

 8 billion devices will be connected to the Internet by 2020.

These changes have led to a new age of innovation across business models and industries,
allowing new businesses to enter the market and disrupt incumbents in serious ways. 
 1.2. Advice for businesses:

A successful enterprise in the future must be able to produce more new ideas, constantly.
Innovation, creativity, and adaptability are traits that are more important than ever,
precisely because they’re more common than ever. A business’s most successful
competitors have these traits. Business conditions change with every new innovation, and
you will survive as a business only if you can adapt (i.e., innovate).

Note carefully, the role of innovation is to help customers create value, but creating value
alone is not enough, but must make customers feel those values.

To overcome the hype and to focus on profitable innovation, we have to keep the
customer’s future behavior firmly fixed in our minds. We have to constantly be aware of
what it is actually like to be that customer; and we have to be willing to act in the
customer’s interest, even when it sometimes means giving up short-term value for the
enterprise itself.

Trying to create a climate of innovation is good advice for a business as well. One of the
obvious first steps, to encourage innovation, is to staff the company with more creative
people, either by hiring more creative people in the first place or by teaching people to be
more creative, if that’s even possible. The problem is that no one really knows what
creativity is or how it happens.

1.3. Example of successful innovation implementation:

Apple is a great example of an organization that effectively embraced innovation at

multiple key points in its lifetime. In the ’90s, for example, the company was on the
verge of bankruptcy, but managed to stave it off by partnering with Microsoft—a
company long seen as the enemy. This move effectively shaped Apple’s entire corporate
philosophy and led to the introduction of the iMac, which was an overall turning point for
the company. Apple, long regarded as one of the world’s most trusted brands, also has a
reputation for creativity, consistently ranking first in polls of the world’s most innovative
companies, even with an occasional disappointing product launch. According to one
assessment, four factors have driven Apple’s inventiveness:

1. It relies on “network innovation,” regularly involving outsiders in its creative process,

from technical partners to customers and others, rather than simply locking engineers
away in the research and development (R&D) department.

2. It is ruthless about designing new products around customer needs with as much
simplicity as possible.

3. It understands that customers don’t know what they don’t know; that is, breakthrough
innovations will often fly in the face of what “the market” is saying. The iPod, for
instance, was originally ridiculed when it was launched in 2001.

4. Apple has learned that one secret for constant innovation is to “fail wisely.” The
iPhone rose from the ashes of the company’s original music phone, designed with
Motorola. The Macintosh sprang from the original Lisa computer, which failed.

1.4. Failing wisely:

Failing wisely. That’s an important clue for setting up a climate of innovation, because
every new idea has a high probability of failure, but without making the attempt, the
small proportion of successes will never be discovered, either.

To keep the company’s chief financial officer from going apoplectic at the thought of
supporting a froth of “creative destruction” and intrapreneurship, we should probably
classify business failures into two different categories:

1. Fiasco failures are the result of stupid mistakes, lack of homework, laziness, misguided
decisions, or incompetence, but

2. Wise failures are the result of well-executed smart ideas, based on carefully considered
risks.

Conclusions:
For business, a productively creative person must also be extremely goal oriented, able to
recognize and define problems clearly, and capable of putting information together in
many different ways to reach solutions.

Regardless of how creative the individual employees are, no enterprise can simply
command people to “innovate.” It doesn’t work that way. All a firm can do is create an
environment in which innovation is encouraged to flourish—a climate of innovation. To
facilitate this, an enterprise may decide to organize somewhat differently, and it should
encourage creativity and experimentation with its policies, in addition to hiring people
who are more likely to be original thinkers in the first place. But in the end, no firm’s
creativity can be commanded. It must spring up from the culture.

Link: https://www.northeastern.edu/graduate/blog/importance-of-innovation/