What is Innovation?
The answer to the question of what is innovation is based on the fact of creating value. This basic starting point will enable us to better understand what innovation means.
Innovation in short; is an innovation that adds value. If we need to emphasize the value creation part especially; not every innovation or every invention can turn into an innovation. When it comes to innovation, a process of getting patents, making and difficult to come to mind comes to mind. However, innovation itself has many types and various applications.
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Innovative thinking; businesses can be more open to change and innovation and as a result, they have the courage to invest in creativity and new ideas. It can certainly be confirmed that innovative thinking in any business leads to growth. Innovative thinking is simply a thinking system based on creative problem solving to find new ideas and new ways to solve problems.
Innovation that touches invention and patents is innovations with a high level of innovation, which is called radical innovation. It is possible to achieve innovation and innovative products with small but highly effective additions and changes in existing products and processes. What stands out in innovation; It is not the first time in the world, but the plan to add value to the consumer and the user.
Types of Innovation
Innovation types are collected under 5 main headings according to the scope of change:
- Product Innovation
- Marketing Innovation
- Service Innovation
- Organizational Innovation
- Business Model Innovation
Electric toothbrushes are an example of product innovation. The electric toothbrush performs the same function as the normal toothbrush, but today, with the introduction of technology into our lives, a point that people normally do not think or care about was taken into consideration, and tooth sensitivity was put on the table, and the automatic stop function was added when pressed too much. In addition, by including functions such as measuring the tooth brushing process and giving feedback to the user when it is sufficient or insufficient, developing an app connected to the toothbrush, the ability to see the time spent by the user for dental care, the interaction was created between the user and the product. Toothbrushes, which can measure data and present them to the user, seem to have the same function as a conventional toothbrush, but offer much higher quality oral care with digitalization.
Product innovation is among the most researched innovation types in terms of innovation. Innovations in the field of product innovation include everything from the features offered to the quality of the product. Innovations in this area revolve around complementary products and services that can add real value to a core product. It may contain both improvements in existing product segments and completely new features. The key point in product innovation is to try to add significant value to the product as stated in its definition. Development of innovative products or product features should be based on.
Examples of Product Innovation
If we detail the product innovation with examples;
- One of the best examples of product innovation is that a famous electronics company has launched a new type of display that is flexible enough to wrap like a newspaper.
- The first electric vehicles introduced to the automobile market are also an example of product innovation. Nowadays, longer-range batteries are also emerging as product innovation.
- Cell phone manufacturers tend to release a new version of their phones every year. In doing so, the manufacturer tries to offer something unique. Product innovation is about improving what you have. You get customer feedback and turn it into an improved product.
Marketing innovation covers all innovation management activities that contribute to supporting the market success of new products and services. Considering that the main task and mission of innovation is a market success, it becomes clear that innovation marketing plays an extremely important role in the innovation process. Thus, marketing innovation involves a wide range of tasks, particularly all activities that relate to the customer and market orientation, and ensure the successful marketing of a new product or service.
Here, the product or service may be the same as before, but the way it is presented to the consumer can be very different. For example; Let's think of a baby shampoo bottle, it may be customary to lift a cap and pour it into your palm or your hair while taking a shower yourself, but you should have both hands free when using adult shampoo bottles while bathing a baby. But while bathing a baby or a child, you race for seconds, and at a stressful point, opening and pouring the shampoo with both hands can become a problem. That's why baby shampoos are offered in pump bottles. In fact, a more practical and faster packaging design has been made here. The product inside is the same as the product in the cap baby shampoo, but there is a packaging innovation created to provide a more accessible experience with the user experience in mind. There should be no difference in the formulation of the product. Innovation can be achieved with the ease of packaging provided between the product and the user relationship.
To give another example, for example, a new product of a company has been released and it is a marketing innovation to attach it to the packaging of the product that the consumer often prefers and gift it with it. The aim here is to warm the customer to the newly released product and to ensure that the new product is preferable while always purchasing the preferred product in the next shopping. In marketing, many different applications can be encountered every day.
Examples of Marketing Innovation
As examples of marketing innovation;
- Developing a new marketing strategy that generates changes in the way a product is designed or packaged, or even other decisions regarding price or promotion, is an example of marketing innovation.
- Examples of marketing innovation in terms of product distribution would be the first implementation of the franchising system, direct sales or retail sales, and product licensing.
- It is a good marketing innovation for a company that wants to digitize its marketing processes to use marketing automation, as a result, to increase its sales further or to get to know its customer base better. Knowing who opened the e-mails or not, and in this way, the company provides information to customers about a new product, within the scope of those who open the mail and those who do not. Its most important reflection makes the company question whether there is a mistake in its service and product.
Not every organization offers a tangible and visible product to its consumer. There are also many institutions and organizations in the service sector. For example, house cleaning can become a big problem, especially in big cities, as the majority is at work, at work, or in traffic during the day. It can be very difficult to find a reliable cleaner employee compared to a small city. Accordingly, there are websites that offer this service. This application, which is close to the user, in the desired price range, can make payments online and offers reliable services, can be given as an example of service innovation. A fully professional service is offered here. The way this is presented to the customer is provided in a digital environment in accordance with the needs. These applications, which can be reached by many people rather than the limited resources that acquaintances can offer, provide an efficient service to the customer by providing them with the reference of a company.
Service innovation is a type of innovation that involves the creation and promotion of new services for customers. Service innovation revolves around the customer experience and starts with service innovations. Innovations in this area improve the features of your product or service, whether by making it easier to use, emphasizing overlooked functionality, or fixing common problems. Even if the services are not actively sold as in production companies, not every company is actively sold to their customers in logistics, complaints, sales consultancy, etc. It continues to serve on the subjects. This is where innovation comes in when it comes to differentiation and customer enthusiasm.
Examples of Service Innovation
- Vehicle manuals are notoriously large and cumbersome. A good example would be that the automotive company took an important step towards providing the best service to its customers by designing a personalized application that not only replaces the manual but also tracks everything related to a car and driver.
- An eyewear company introduces a technology that creates a 3D model of their faces to help their customers find the perfect glasses and finds the glasses best suited to their face shapes, where they can try the glasses virtually before making their decisions, and will again be an example of service innovation.
It is a type of innovation that includes the improvement of processes through continuous improvement and the development of new solutions. Organizational innovations affect the process and organizational structure. These can be organizational process innovations or management innovations. It is a process where innovation is penetrated within the company and its effects can be seen.
At this point, when organizations think that organizational structures that have been going on for years can no longer adapt to new business models, new business processes, they are inadequate at certain points and limit themselves, companies may want to change their organizational structure completely and have a structure that is open to innovations and adapts quickly to different applications. At this point, innovative work is done on the basis of departments, employees, and the hierarchy within the company is called organizational innovation.
Examples of Organizational Innovation
Examples of organizational innovation include:
- new tools to measure customer satisfaction or optimize delivery processes to reduce costs.
- Lean manufacturing, whose main features are simultaneous engineering and just-in-time delivery, discovered as the number one reason for the excellence of the Japanese auto industry is an example of organizational innovation.
- The implementation of production systems created to order with the ultimate aim of integrating sales and production processes is another example.
Business Model Innovation
The business model is a phenomenon related to how the firm delivers the product or service it offers to the consumer and how it generates an income from it. For example, the purpose of the bitcoin application is to provide a service, but a new business model is being introduced while offering that service. Uber does not have a vehicle of its own. The aim is to match and bring taxi drivers and customers together. The Uber application creates the income model by taking a commission from taxi drivers. Instead of making the extra mileage while the extra vehicle is empty, the taxi driver reaches the closest customer and gains maximum profit with minimum free time. On the customer side, it is a big problem not to reach a taxi in times of trust or need.
Through the application, you can see the license plate, driver, and identity information of the taxi that comes to you, and you can rate the driver. In this way, with an application, a point is reached where both sides can meet with a trust relationship. The problem of trust can be a problem not only for customers but also for taxi drivers. This application can provide maximum efficiency by ensuring the safety of taxi drivers. Here, a business model that is very different from running a classic taxi stand is presented. Thousands of taxi drivers and customers are brought together daily. It is very similar to service innovation but here the main strategy is to create a business model.
1- While making innovation and designing the process of the product, it is necessary to include the user in this design phase. Because with the eyes of the manufacturer or designer, some ideas about the use of the customer can be obtained, but the point that the customer needs cannot always be interpreted correctly. It is important to include the consumer in the processes in order to capture unobservable details.
2- There must be a strategy included in innovation. Every company has a mission, vision, and strategy. Accordingly, an innovation strategy must be defined in accordance with the company's strategy, general goal, and structure. The important point here is; companies have data and strategies regarding their routine activities, but do they have a strategy for innovations they want to implement in the upcoming period? In what area do they want to innovate? In which area do they want to offer different products and services to their customers and users? They need to be framed because innovation is an open-ended and endless field. If priority areas are determined and issues called innovation development can be determined, it may be possible to direct the studies and teams here more clearly, to create more accurate resource use and thus to get faster results. An innovation strategy associated with the company strategy must be prepared and defined.
3- Another important point is patience. In order to be competitive in routine business processes and to be able to respond to the market faster, it is a priority for institutions and organizations to develop products quickly and to advance processes rapidly, and new studies and practices are always carried out to move faster. But innovation is different from routine work, it's about breaking routine. For this reason, speed in routine processes should not be expected in the innovation process. Especially in companies, when a new innovation team is set up, at the end of the first year, “What did you do this year? What conclusion did you make? ”Are asked. innovation is not just the work of a single team in a company that includes employees in the innovation job description. Innovation can be made and innovative processes can be created in all units of the company. Given this, innovation can be considered as a cultural transformation. Although there are innovative processes in the company, even if innovative ideas are created, implementing them can be a long process. It may not always be at a point where quick results can be obtained. Rushing can create a disadvantage, as it is a process that requires a little more patience and effort than current business plans. It is necessary to focus on what kind of outcomes are targeted in the long term.
4- It is always necessary to see progress as steps rather than as a result. The goals in innovation should always be broken down into milestones. Sometimes the result cannot be reached from there, but the lights at the end of the tunnel can be caught. Therefore, as in many business management principles, it should be taken step by step by dividing the targets into measurable milestones. Because there is much more uncertainty in innovation processes. Sometimes it is possible to work on a product or process that has never been produced and worked on before. Since uncertainty is very high at this point, milestones will always be a guide and senior management is important in terms of providing realistic outputs.
5- It is possible to be very wrong by moving fast. Since the uncertainty in innovation is very high, sometimes it may be necessary to try methods and methods whose results are not sure. The most important thing to be aware of here is to quickly determine whether a result can be obtained by using a very small resource as soon as possible in the newly tried method and method, which can prevent major losses in the innovation process. The main goal is never to reach the conclusion without making any mistakes. There will be mistakes, and it will be possible to build a stronger process with the teachings of these errors. Therefore, it is an important principle to do a lot of trial and error with minimum resources.
6- It is not compulsory to create a dedicated team for innovation, it is possible to create a team by gathering people who are open to innovation and whose ideas are applicable. In this way, the processes proceed more homogeneously by taking into account the company culture is known. Apart from this, it is very important to have people who have worked in change and management projects before when building innovation teams. Because change management and innovation show parallel similarities. For example; When a firm's financial processes are moved to a new platform, many obstacles can be encountered when first implementing an innovative process. Since there will be uncertainty and question marks when employees move from the order they are accustomed to and comfortable with to a new order, the change management team should support them in this regard and be there for a smooth transition to the new system, clarifying the uncertainties. In fact, what is expected from the innovation team is very close to these. So if there will be an innovation in the company, the team that will adopt it first and realizes the closest understanding to the process will be the people who were previously in the change management teams. As we mentioned at the beginning, all departments can adapt more easily to this process by adding employees working within the company and who are open to innovation. Because people can get used to the processes in a more motivated way when they are guided by colleagues they know. In this way, there will be no need to recruit extra new colleagues for the newly formed innovation team and the process will proceed in a healthy way in a chain. Therefore, friends with high adaptability, who are keen on innovation and change, who can take the flag about innovative processes in the company, and lead other colleagues, are one of the key points of the business. Although there is a separate dedicated team for innovation, it may not be very easy and fast to reach everyone and manage the right message in a company where hundreds of thousands of people work, since the resources of the team will be very limited. Therefore, employees who can take this process with friends in the other team are very critical for the company.
7- Always a single model related to innovation may not open every door in all processes. It will be more efficient to diversify models and methods in innovation and to design separate processes for each field of activity. It can be inconvenient to carry out every activity with a single model. You should be open to trying new solutions.
Innovation management is always one of the competencies that all organizations should have, regardless of the sector and company scale. Innovation management can be defined as a holistic and systematic approach to the innovation development activities of the organization. To give an example about the necessity of innovation management; Although the processes, strategies, and things to be done in hospitals were certain, innovative processes had to be developed with an unpredictable virus surrounding the world. Most people could not go to the hospital for their ailments, unable to risk transmission of the Covid-19 virus. As a result, private hospitals developed an innovative process and started to perform pre-examinations online.
They tried to protect both the physical and mental health of the patients by preventing the delay in the intervention of the disease or the disturbing situation by taking the patients into the preliminary examination. This can actually be regarded as an innovation in terms of business model and service. Hospitals did not have a separate department for innovation, probably customer requests or business development teams defined the need and implemented such an application. In addition, family meetings, job interviews, lectures, etc. innovative solutions were created during the pandemic process.
This innovative process coming to hospitals will continue after the pandemic. Because people have gotten used to this service and people who are at work, people who are difficult to go to the hospital or do not have free time will want to get their services by pre-examination by choosing the online system.
Why is Innovation Management Necessary?
It is not possible for us to protect our commercial existence with routine business processes. For example, when the list of the world's top 100 companies 20-30 years ago is compared with the current list, we see that companies such as chemical companies, pharmaceutical companies, petroleum companies have completed the first 100 in the last 20-30 years. But in the last 10 years, technology companies have started to replace all companies. Technology companies have shaken the throne of companies and sectors that have existed for centuries and never thought to be shaken, thanks to digital content, new business models, and new services that are completely created even though they do not offer products to consumers. At this point, we can clearly see that the priorities have changed in commercial and sectoral terms. Where does this take us? We see that even companies that we see as guaranteed the continuity of their revenues and whose growth and commercial activities will continue without interruption can fall behind the trends and cannot bypass some thresholds.
One of the best examples explaining the necessity of innovation is the Nokia company. Going back to 10-15 years ago, almost everyone had a Nokia mobile phone at home and it was a brand that conquered the hearts of the consumers with its durability. However, with the development of technologies and equipment, they cannot continue their existence because they cannot calculate the future trends of the customers because they cannot correctly read the trends in terms of diversifying their products in terms of innovation management and strategic decisions they make with new products. They experienced a shrinkage that no one could foresee. Instead, many different brands have entered the market now and their revenues are much higher than before. At the moment, we can say that mobile communication and mobile devices are not a part of my life, they cover almost all of them. Even the computers and the popular device of the last period, tablets have gone aside, but everyone has a mobile phone. As the age of use for this has come down too low, a serious market has emerged and it is getting bigger. Firms that we say that nothing happens here, never stop their activities, may come to the point of closing. This is a great example of innovation management as a phenomenon that should be considered regardless of the scale and service of the firm.
A company of SME-scale can always turn into a large-scale company with the right strategy and the right innovation management. This is all about offering the right product to the customer at the right time with the right strategy. Here, they can develop their product and service areas within the scope of what the consumer needs. In order to understand these, they must be in a very close relationship with their consumers and use their limited resources very accurately. All of this is possible with innovation management. SME companies and family businesses can continue to grow at very small rates by continuing routine work here. In order to achieve aggressive growth, they need to introduce new and unorthodox services or products. For large-scale companies, they need to place and care about innovation management in their strategies and priorities in order to maintain their positions, expand into new areas and achieve success in new fields of activity.
For the Successful Innovation Management
The most important of factors that impact the management of Innovation It is the ownership of the process by the employees within the company. Since a new product or process is mentioned here, it is very important for employees to adapt and not resist this change from a point outside the usual order. Showing resistance is a common situation. This resistance can also be in experts, senior management, middle-level managers. Since senior management is also the decision-making authority, there may be no solution when there is resistance here.
In the middle level, it may be more difficult for the personnel with many years of experience to break from their usual order because they believe that the methods they have known and applied so far are the most accurate and efficient. Therefore, the resistance in middle-level managers can be strong. Employees at the beginning of their careers in the company are usually younger and have less trouble adapting to new trends. These generalizations may not be true for everyone under all circumstances. Here is what needs to be done; To create an effective group of people who will adopt innovations, changes, and new processes first, to establish a core team, and start working with them first. Then, gradually ensuring that other employees own the process with the contribution of this first established team may be the best solution method.
It is also very important for the top management to own, believe in the process, and transfer resources. Generally, when employees want to implement a new process, senior management may not want to allocate resources for it, or the middle level may believe that the processes up to now are more correct. At this point, it is necessary to prepare studies that will emphasize the strategic importance of following innovations and new trends and creating innovative processes. It may be necessary to clearly demonstrate the commercial effects of this on the company and its effects on the customer base that companies appeal to and gain their support.
When results are expected, this is very important. It is necessary to set realistic goals. This can be very difficult if the firm wants to achieve very large goals in a very short time. The process should be defined within reasonable goals.
What are Innovation Management Practices?
Although it is not very new, one of the very common methods used in small, medium, or large scale companies in the world is the Stage-Gate System. Although it is not an approach that covers the whole of innovation management, it is used very often especially in product and service innovations. For example, companies such as Pepsi, which operate globally and almost everywhere in the world, can also use it in SME-scale companies. The aim here is to design the process from idea to product with all its components and to design and systematically advance a single flow for all new ideas and projects. In this way, with a phase transition system, it is possible to manage the process from the pool of new ideas until these products reach the customer concretely.
Focus group work is a group formed by consumers or employees within the company. For example, there are 100 customers who report a complaint about a product to the call center, and after that product has been improved and released the first prototype, customers who report a complaint may be asked to call and test the revised product. Thus, before the commercialization phase, arrangements can be made by receiving feedback from them on whether the need is met or not.
Open innovation is one of the important applications. In open innovation, a channel is created that is open to all consumers and stakeholders, and suggestions can be requested in a specified specific area, or it can be requested to convey ideas on each subject. Separate teams can be set up to evaluate subsequent suggestions, and those deemed appropriate in these outsourcing ideas can be commercialized.
Apart from that, innovation can be done with the partnership of two companies. For example, software and hardware firm can come together to launch a new product that touches both service innovation and product innovation. Thus, innovation can occur when two companies develop in certain areas. What is meant to be emphasized here is that it may be possible to create different innovations with the contributions of all stakeholders in this ecosystem by considering the innovation process as an ecosystem with both suppliers, other companies, and consumers. Because when you try to introduce new processes only from the perspective of your own company, you may get stuck at some point. Here, the more stakeholders are involved in the process, the more different points of view there may be. The company must have a door opening to the outside.
Common Mistakes in Innovation Management
First of all, mistakes can be made at the strategic level. For example, before an innovation or R&D center is established, it is necessary to conduct researches on which field of studies can be carried out and the suitability of the fields according to the company strategies. When working at the project and idea level without such a work with the support of senior management at the strategic level, resources may be used to create results at points that diverge far from the company's goals. Therefore, in order to progress more systematically, it is necessary to set commercializable targets in line with the company targets.
Generally, quick results can be expected from senior management. Waiting for results without knowing the needed time and source can be another mistake. Most of the time, the commercial output of a comprehensive innovation project can take 2-3 years or more, and an idea that can achieve commercial success is abandoned if the project is terminated without enough time. Accordingly, all the resources allocated because the project is abandoned are wasted.
On the contrary, when a very successful project is realized with a very innovative idea and the project is presented to the market at the wrong time, the expected result may not be achieved. Therefore, market research should be done ahead of time by trial and error with a lot of experimentation with minimal resources. In unsuccessful projects, the documents can be examined in detail by examining the documents in detail and tried again after the errors are detected, and the resources can be increased, while in a successful project, the resources can be increased to achieve even more success. It is necessary to analyze the mistakes by examining them as much as the successes because the fine details found are perhaps the starting point of a new innovative process.