Innovation is one of the cornerstones of business. It is important to note that innovation is the process of “creating something new or unusual, the application of scientific, technological, economic, and social principles to existing things… for the purpose, among others, of improving their operation, product, or service.” Innovation is the driving force behind virtually every successful business venture.
Innovation is most commonly defined as “the bringing together of experience, knowledge, and ideas for the accomplishment of a common goal”. The true innovation process begins with the idea and then the integration of those ideas into the business. While some executives may promote the idea of innovation as a way to solve problems quickly and effectively, most of the time that type of innovation is not necessary, nor does it ever produce the desired results.
In order to truly achieve innovation in business there must be a clear strategy and a series of predetermined steps that leads to innovation. Most often, what occurs is that an individual or group of people are exposed to new market opportunities, come up with an original idea or a new concept, and then pursue that idea or concept through the appropriate channels to introduce that concept or idea into the marketplace. Without such an initial innovation strategy and direction, there is no way to measure success or lack of success with any given idea or innovation. If there was no measurement of success, there would be no incentive for innovation. In other words without a plan to implement the new ideas and concepts, innovation becomes a haphazard event, almost certainly not disruptive, which drives away investors and prevents the formation of true innovation.
Therefore, there must be an underlying framework in place before any kind of venture can become disruptive, such as a business needs to have a core purpose, there must be a plan for implementation of that purpose, there should be metrics to measure that purpose, there should be stakeholder involvement to develop that plan, there should be the creation of a vision or a statement of purpose that drives the innovation, there should be metrics to measure how successful the implementation is, there should be stakeholder engagement to build upon the innovation and create new value chains, and finally, there should be a process to capture and funnel all of the value created. In other words, without these key elements, creating new value by introducing new technology or new ideas is meaningless. In fact, without this framework there is very little meaning to the creation of any new innovation. Otherwise, an entrepreneur or venture capitalist would not be willing to invest in an idea or new technology.
Therefore, in order to create value and create true innovations, there must be a series of steps laid out in a planned and methodical innovation strategy. These steps should include: developing a vision or a statement of purpose, developing a plan for implementation, measuring the results of implementation, measuring the impact of the implementation, establishing a means for capturing the value created, and finally, funneling the value captured into the future. Each of these steps is important, but they cannot exist without the next element, which is stakeholder engagement. Without stakeholder engagement, there will be no innovation. Stakeholders are individuals that get involved in the innovation process and serve as a catalyst for innovation.
In conclusion, to truly define innovation, one must take into account the steps that must be taken to create new ideas, the steps that need to be taken to foster an innovation process, and the steps that need to be taken to capture the rewards of those innovations. There are many different ways in which we can measure innovation. However, for the purposes of this article we will focus on describing the different types of measurement used. We have also looked at the steps that are required for an entrepreneur or venture capitalist to create new ideas and concepts. Finally, we have looked at the methods by which stakeholder engagement is vital to an innovation strategy.