Innovation as a Process
By Amir Gal-Or
There is a tendency to confuse creativity with innovation. Let’s try to be clear. Creativity represents the ideas and innovation represents the process whereby creative ideas evolve into reality. Creativity is an innate, personal quality – you either have it or you don’t. Innovativeness, conversely, can be learned, developed and fine-tuned within an organization.
Here’s the problem though. If not focused, the process of innovation can end up being a real mess. In fact, most organizations struggle with the innovation process as it is not clear whose responsibility it is to lead the effort. Is it the marketing department? Perhaps the products department? No, it must be in the research and development department. It can be awfully confusing.
Another reason for the potential mess is the lack of coordination between the departments of any given organization. Smooth transitions from department to department in terms of information flow and task assignment are at best challenging.
At Infinity, we have had a few cases where the strong ideas of one company eventually materialized into innovative success, however mainly due to the innovative talent of another company. For example, we were working with a gaming company that had this great, creative and original idea for the PC casual gaming industry. It had access to all the various possible resources. However, due to the lack of a comprehensive process, this same company missed the social gaming opportunity and never quite made it into the Apple games industry. They had the makings of all of the right stuff, but no one in the company had the vision to do a proper numbers analysis and work with a diversified management team. Instead they relied on intuition and habits. As a result they lost the opportunity to lead a market and are now trying once again to identify the next hot trend. And, they may in all likelihood still be able to experience success, as all of the organization’s various departments are now well coordinated and focused on one clear target - profit from the existing PC market, while preparing and coordinating efforts for the next big thing.
As innovation can be learned, it also stands to reason that a company actually has the ability to nurture and grow a “culture” of innovation by creating an open door policy for employees to challenge the ideas upon which existing products are built as well as the process that built them. These challenges breed creative thinking and ultimately have the possibility to result in a better, perhaps even more advanced model. If companies are welcoming, give incentive and perhaps even reward those who dare to challenge the status quo of product invention, then others within the company will follow suit, inspired by the fresh air of innovation.
This is easy to say but difficult to implement. Breeding an innovative culture within its companies remains a challenge in China, given the importance placed in traditional culture on keeping harmony and respecting those senior and/or older. As a result, Chinese companies with a fresh view, a creative outlook and an innovative spirit, constantly and inevitably hit a proverbial glass ceiling without hope of breaking through to reach the light. There is fear that the vast majority of breakthrough innovations will cause damage to the existing power structure.
Culture is often referred to as the "mother of all institutions". Considering, we should not presume that such a strong entity will change readily or overnight. Rather we should focus on dividing the process into stages: to begin, encourage the creation of a defined structure where team members may exercise creativity and innovation and even be rewarded by those senior or older for certain "out-of-line thinking”.
A successful innovation is one that has gained support from all origins of the organization and from the Eco system around the company. These include media, government and services providers. Internally, the most effective support for process comes from the confidence placed in leadership of the innovation initiative, which must start from the top management and be led by highly respected individuals or teams.
Two others critical segments of innovation which need to be defined and communicated with are the developers (mostly in R&D department) and the executers (operation and marketing). The leaders of the developers are the ones who take the initial idea and challenge it in terms of technology, production, market and financial implication. From there, they need to communicate with the executers, again the operations and marketing departments. And aside from the usual functions, the the executers may also need to periodically alert human resources to the need for new talent and systems required as the organization continues to grow and its developments advance.
At one of our material companies, we decided to take their high purity powders and create a new product - an electronic high end capacitor. The point of this innovative initiative was to create a situation whereby we could enjoy the high margin afforded by a “product” in place of the limited and low margin potentially gained by a ‘material’. The result of such a planned process was a new organization, new hires, new training and new market channels. It took a long while before success was realized. Nevertheless, in retrospect, it proved to be the right move for the long term.
