What is Corporate Innovation?
There is often the confusion that creativity and innovation are practically equivalent concepts and have a few different nuances. They may be closely related, but they are not the same; corporate innovation requires creativity to seek novelty. However, there can be innovation without creativity and creativity without innovation.
Corporate innovation – Another frequent confusion is to mix its themes of innovation in businesses and organizations with entrepreneurial activity. When innovation becomes specific to a functioning organization, it is necessary to specify particularities about how projects develop because entrepreneurial activity often generates confusion It is not the same to start from scratch to create a new scheme in an organization.
Although starting an idea from scratch and developing it within an organization may coincide in method and tools, the context and execution are essentially different. Innovation offers new products and services that deliver value to its users and a viable business model for a business organization.
As you can see, this definition has three aspects that should explore:
New products and services. This is one of the aspects where creativity can be a fundamental point for developing new problem solutions or solving problems not addressed or not addressed effectively. All these are slopes for the creative solution of challenges.
Deliver value. Something extremely creative would be useless if it did not offer a real differential value to users, solving challenges directly related to their needs. The term users are used to broaden the vision of the concept of the customer because it is increasingly common for the purchase decision and the use of products and services to be shared: customer, user, decision-maker, influencer, etc.
Viable business model. When these users appreciate the value received, they are willing to pay for it, managing to sustain economic value over time.
Innovation, therefore, is not based on the generation of new ideas converted into new products or services but on the ability to generate value for specific people with a business model that allows them to generate wealth.
If any of these three elements: novelty, meeting needs, and generating economic value, there is no talk of innovation. For a company, the invention consists of generating incremental profits through two paths:
- a) With the development of new products or services that people want to buy.
- b) Make adjustments to the operating model to generate greater efficiency with current products and services.
The severe problem in many organizations, even those that invest in research and development, is reaching the end of the race with products or services that customers do not appreciate and are unwilling to pay for. For this aim, it is essential to have evidence that these new ideas or proposals can generate greater profitability, either by generating additional income or by reducing costs or expenses.
Then, innovation for a company implies novelty and solving challenges to problems or wishes of the users involved. With a business model capable of generating wealth.
When we talk about innovation to generate greater efficiency in the operating model, people who have a burden in operation are very relevant because they have excellent accumulated knowledge about how things work and train to detect areas of opportunity. While this type of innovation is necessary, it is not the one that causes the most growth or transformation.
When it comes to new products or services, they should be developed by a team. However, other than the operation team because it is difficult for the operational team. To seek to get out of the core business of the organization, due to the risk involved. And also, due to the management of uncertainty that it requires. Sometimes staying in the same line for fear of change is usually a drag on the speed of change in an organization.
Combining the current business operation with the discovery of opportunities outside. And also, the core business requires an ambidextrous mind that is not usual in most people. For this reason, it recommends that this type of innovation conduct by a team other than the operating team.
As you can see, corporate innovation has certain peculiarities; novelty requires generating value for customers and wealth for those who propose it. Thus, it clarifies that true innovation is what reaches the market and accept by customers. There is no innovation without a need. There is no innovation without customers. However, there is no innovation without generating value for customers and the organization that proposes it.
Corporate innovation has several paths: the formation of internal work teams, better known as entrepreneurs. When the entrepreneurial activity carries out through external startups, either promoting their projects or investing in them; this activity determines as a corporate enterprise.
Both paths usually have their advantages; it is convenient for each organization to define its best alternative and if both models can coexist. Both require method and praxis to achieve positive results.
Also Read : Machine Learning: Meaning, Kinds, Reinforcement, and More
Review Corporate Innovation: Products, Services, Business, and More.