Innovation areas that companies have ignored

New venture division, new communication system or new workflow procedures are forms of innovation. FOTOSEARCH 

By SCOTT BELLOWS

Desires for innovation dominate most executives’ strategic plans. New markets, new products, new technology, new approaches all could make a firm more competitive than others in the sector.

Last week, Business Talk explored the components of creating an innovative firm. Today we continue the journey with identifying types of innovation.

Take the case of Rono. She stepped into a new leadership position in a well established service sector firm.

Rono took the post because she felt that she could propel the institution forward with innovative programming and tackle new markets.

Once she started work, Rono noticed that employees did not discuss new and creative ideas during meetings. Even in one-on-one conversations, staff rarely brought up any new or original idea.

Pondering whether the institution had retained a whole cadre of lacklustre employees, Rono decided to dig deeper.

What she discovered surprised her. Workers feared bringing new ideas to her office. The workplace did reward creativity and instead fostered employees keeping their heads down and not bothering anyone else.

Organisational culture specifically carried a disincentive for innovation through punitive measures for speaking out of turn.

If you think of innovation, what aspect of creativity comes to mind? Invariably, most executives think of product innovation which entails the development of a new product or an improved take on an older product.

However, managers forget that many other aspects to innovation exist in order to achieve product innovation.

Executives often overlook organisational innovation.

Organisational innovation involves a new venture division, a new internal communication system, a new accounting procedure, a new organisational structure, or new workflow procedures.

In Rono’s example, a new human resources system that rewards innovation intrinsically and extrinsically needs implementation.

Rono may start off by Googling “process maps” and start to map out how decisions occur in her firm.

An approval process that requires too much executive or management input at every step actually stifles creativity.

The firm should enable employees to progress significantly towards an innovative goal without too much micromanagement interference.

If existing managers in Rono’s company cannot withhold meddling in every step of employees’ actions, then an innovative organisational restructure may be in order.

Firms also must improve process innovations that create new manufacturing processes, such was the case with the first iPhone, or new service delivery models, as exampled in McKinsey & Company’s new African Delivery Hub in Nairobi.

Rono may also look into management innovation that in Kenya famously includes TQM (total quality management) systems, an enterprise resource planning software, or business process re-engineering.

Production innovation includes the East Asian concept of quality circles. Edward Lawler and Susan Mohrman define a quality circle as a group of employees that meets regularly to solve problems affecting its work area.

Additional production innovations includes the ever elusive just-in-time manufacturing system that every undergraduate learns about but grocers and manufacturers try to implement to varying degrees of success in Kenya.

Also, new inspection systems or new production planning specialised software improve production. Additionally, Kenya excels at service innovations that involve new online banking or mobile money additions to existing platforms for example.

Commercial or marketing innovation incorporates new sales approaches or new financing arrangements to offer products on credit.

Marketing innovations in Kenya range from online sales, peer-to-peer sales, SMS sales, mobile application sales, as well as all forms imaginable for advertising. Kenya retains some of the most creative multi-sided advertisers in the world.

Predict actions

In Europe and North America, marketing psychologists even study shopper behaviour in department stores and online sales sites to such an extent that they start to predict customer actions.

As an example, researchers know that when Western consumers enter a store, their natural tendency leads them to look at products first on the right side of a store. So market innovators place the most complicated and interesting products on shelves on the right side of stores.

Further, marketing psychologists test different music reactions and the impact on shopper behaviour.

Does a fast song, slow song, older song, or a newer song played over the shop speakers cause shoppers to buy more or less products? Similarly, does spraying various fragrances into the air increase or decrease shopper propensity to buy