When bringing a product to market, a number of key strategic questions need to be answered satisfactorily long before substantial costs are incurred for commercialization. These questions are simple to ask but complex to answer, and business analysts and market researchers will spend a considerable amount of time approaching them via research models and careful financial consideration. While these questions are key considerations in the commercialization process, remember that they should have been answered long before the commercialization stage.
After all, if the need is not sufficiently widespread or the market not sufficiently developed, there is little reason to have pursued a given innovation in the first place. Offering employees challenges, freedom, resources, encouragement, and support can help them to innovate. Strategies capable of producing innovation require resources and energy; it is therefore necessary to discuss in your business plan the organizational structures and practices you will put in place to encourage and support innovation.
Amabile points to six general categories of effective management practices that create a learning culture within an organization:. Innovation : Cartoon shows the challenge of translating innovation designers to economic success. You will likely find that you need to generate hundreds of ideas to find ten good ones that will create value for your organization.
This is part of the creative brainstorming process, and it should be encouraged. It should be the responsibility of every individual in the organization to come up with ideas, not just the founder or key staff. Here are some suggestions to encourage the flow of ideas. Encouraging creativity helps keep staff happy. If they think something is important and has the potential to create a financial payoff for the company, let them follow their idea. People perform best when they are driven by inspiration and encouraged to push their boundaries and think outside the box.
But employees cannot do this when they are being micromanaged. Employees need to feel independent enough to own their innovative thinking and to pursue the ideas they are passionate about. In fact, if management effectively fosters a creative and open environment, innovation will happen naturally. Creating a participation-based environment means creating smart teams, encouraging open dialogue, and minimizing authority. Criticism is productive and should be encouraged, but it must be used constructively.
One of the most powerful tools for promoting employee creativity and innovation is recognition. People want to be recognized and rewarded for their ideas and initiatives, and it is a practice that can have tremendous payoff for the organization. Make it clear that compensation and promotions are tied to innovative thinking. You may have an innovative culture in your organization, but you also need to familiarize staff with some of the hallmarks of continuing innovation. For example, you could educate employees at regular training sessions on topics such as creativity, entrepreneurship, and teamwork.
Each session might conclude with the assignment of an exercise to be performed over the next few working weeks that will consolidate lessons learned. Your aim here is to give employees a taste of innovation so they will embrace the process. Encourage employees to take advantage of coffee breaks, lunch breaks, and taxi rides.
Often great ideas that can lead to innovation will happen outside the places where we expect them to happen.
Also be sure to encourage laughter at meetings because laughter is an effective measure of how comfortable people feel about expressing themselves. Skip to main content. Organizational Culture and Innovation. Search for:. Adapting and Innovating Benefits of Innovation Innovation may be linked to positive changes in efficiency, productivity, quality, competitiveness, and market share, among other factors. Learning Objectives Identify the organizational benefits derived through enabling internal innovation. Key Takeaways Key Points Innovation is the development of customer value through solutions that meet new needs, unarticulated needs, or existing market needs in unique ways.
Innovative employees increase productivity by creating and executing new processes which in turn may increase competitive advantage and provide meaningful differentiation. Clarity about and understanding of roles, increased responsibilities, strategic partnerships, senior management support, organizational restructuring, and investment in human resources can all enrich organizational culture and innovation. Key Terms efficiency : The extent to which a resource, such as electricity, is used for the intended purpose; the ratio of useful work to energy expended.
Characteristics of Innovative Organizations According to recent research, companies that make a commitment to innovation are exceptional performers in their respective industries. Learning Objectives Outline the critical success factors and characteristics of an adaptable and innovative organizational culture. Key Takeaways Key Points Being receptive to new business ideas means being receptive to the idea that mistakes are a necessary part of the process.
Everyone in the business needs to keep an open mind and develop the capacity to look at things with fresh eyes. It is likely that some successful innovations will result from chance discoveries. Managers must understand that employees too mired in routine work and too criticized for trying new methods will inherently fail to create innovations that may drive organizational growth. Key Terms innovation : A change in customs; something new and contrary to established customs, manners, or rites.
Types of Innovation There are three main modes of innovation: entrepreneurial value-based, technology-based, and strategic-reflexive. Learning Objectives Outline a categorical overview of the potential ways in which innovation can be pursued and identified. Technology-based functional innovation occurs when the development of new technology drives innovation. Other types of innovation include: incremental, architectural, generational, manufacturing, financial, and cumulative.
Speed of Innovation Companies compete to adapt their products and services to incorporate new innovations first. Learning Objectives Recognize the challenge inherent in adopting new ideas and the subsequent considerations pertaining to the speed of pursuing them. Key Takeaways Key Points Speed of innovation can pose a major challenge for organizations responding to external change. Profits depend on speed of innovation and the ability to attract customers.
Big corporations used to dominate, but now industry leaders are often small, highly flexible groups that come up with great ideas, build trustworthy branding for themselves and their products, and market them effectively. A first-mover in a given innovation captures the obvious advantage of tapping into a new market before the competition. This can also allow the first-mover to capture the new technology for its own brand.
First-movers encounter high fiscal risks in integrating a new product or services into their distribution, and failure often means sunk costs. Late-comers to the game can simply observe the success or failure of other competitors and make a more informed and less risky decision.
Cannibalization : The reduction of sales or market share for one of your own products by introducing another. Sustainability Innovation Sustainability innovation combines sustainability endurance through renewal, maintenance, and sustenance with innovation. Learning Objectives Describe how organizational culture adds value by generating an innovative approach to sustainability issues. Key Takeaways Key Points Sustainopreneurship describes using creative organizing to solve problems related to sustainability to in turn create social and environmental sustainability as a strategic objective and purpose.
Solving sustainability-related problems is the be-all and end-all of sustainability entrepreneurship. Passively heated houses, solar cells, organic food, fair trade products, hybrid cars, and car sharing are all examples of sustainability innovations.
Key Terms sustainability : Configuring human activity so that societies are able to meet current needs while preserving biodiversity and natural ecosystems for future generations. By reviewing a project at the end of each phase or stage of development, you can identify products or services that are unlikely to be successful before resources are wasted.
If the product or service fails to meet established criteria, the project is ditched. If it meets them, resources sufficient to enable it to reach a next, predetermined, stage are allocated. A range of government grants and tax breaks is available for research and new product development. It's essential to keep a close eye on costs when you develop new products and services to avoid them spiralling out of control.
You should:. Remember that your costs could include staffing, materials, technology, product design, market research, prototyping and incremental overhead costs. Project managers are essential to ensure the successful development of new products or services. They'll be responsible for:. Your project manager should draw up a critical path for the completion of key tasks. SMART specific, measurable, agreed, realistic and time-limited objectives can help to control and co-ordinate the development team's advance along this path and stages can be used to monitor progress.
Clark, K. B. and S. C. Wheelwright, eds. The Product Development Challenge: Competing through Speed, Quality, and Creativity. Boston: Harvard Business. How do top product development companies gain competitiv The Product Development Challenge: Competing Through Speed, Quality, and Creativity.
However, flexibility must be built into your plans. Any number of unknowns can come into play and result in, for example, a change in the project's specifications or expected completion date. Our information is provided free of charge and is intended to be helpful to a large range of UK-based gov. Because of its general nature the information cannot be taken as comprehensive and should never be used as a substitute for legal or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business.
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Guide Develop new products and services Share on:. The lifecycle of products and services Developing your ideas Match products and services to market needs Pricing your proposed service or product The project development process Creating a project team Investment and cost control Manage a development project.
Will your new product or service meet customers' specifications?
For example, consider its design, ease of use and performance benefits. How technologically feasible is the product or service? Can you meet the design, resource and manufacturing requirements? Are you clear about what you hope to achieve with the new product or service? Does it meet the strategy outlined in your business plan and play to your business' strengths? The benefits - or value - to the customer of your product or service compared with what the competition has to offer.
Will the price be one that customers are prepared to pay? Whether or not you're first to market. Is your product or service revolutionary or are you following a market trend? The selling channels you want to use, which will affect your promotional spending and distribution costs. The speed with which you want to establish your product or service. The expected lifecycle of your product or service.
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