Organizational Innovation and Strategy


The eventual role of implementing strategy in all companies is increasing profit or/and market share and here innovation plays a big role.

If we respect and train our people to be innovators then achieving to our objectives should be smoother.

1. But what innovation exactly means and how many types of innovation exist?

Meaning: Anything that brings new idea, product or service is considered as innovation.

Generally innovation is about connecting things together to get a better or different result.

When Jeff Bezos started selling books on-line he just connected the needs of people with internet and on-line shopping. He made it easier, smoother and in many cases faster!

The question is - are all innovations useful?!?!

In one reply, I should say NO!

Those innovations that are pushing up metrics considered as sub-pillars of our balanced scorecards should be considered and implemented.

2. But how many types of innovation do exist?

Types: Majorly two.

Let's make it clear. I am not talking about innovation in general. It's about organizational innovation and also I wouldn't like to make you limited with these two types!

Basically, my intention is just categorizing ideas and helping you to recognize them for practical and positive changes in your organization.

1. Incremental Innovation: This is a bit easier. We have it when we add something to another idea to make it better. For example: Processed food. The basic was there but someone tried to make it ready, probably cheaper and flavored.

2. Disruptive: One of the examples can be Amazon as we discussed above. Jeff Bezos started connecting what people wanted with internet but the reason that we call it disruptive is that many small bookshops couldn't compete with Amazon and his way of selling. Basically in the beginning the idea was just selling books on-line and it was incremental innovation but later it got completed by opening a new angle in the market and competing with traditional market players.

Anyway, if you are a lucky CEO and you are getting too many suggestions which they all seem great but you do not know how to prioritize them there are two simple ways to put them in row:

1. Look at all four pillars of your balanced scorecard and figure out in which one you are behind. If the innovation can push up that specific metric higher then try to implement it.

2. Disruptive innovations create sustainable competitive advantage. You bring something new and you grow up your market share. That is awesome. Go for it ; ))

At the end, I would like to ask you not to forget your innovative employees. They are your business partners. Take good care of them.