Innovation-Productivity-Change: A measured approach

With the ever changing global business landscape, carved by technological advances and the ongoing challenging times of recession companies are struggling to keep their heads above the water to breathe and survive. There has been a shift in the philosophy of productivity, a shift which has the potential to render the big ones helpless and the small ones with all the power. The shift is that of Innovation.

Innovation has become a buzz word with every new kid on the block, challenging the big and established ones on the grounds of innovation. Responding to the change and threat associated with innovation, firms today have become more experimental than ever with huge involvements in terms of resource and capital commitment.

Productivity is another aspect that drives the decisions of a firm. Productivity is enhanced when a process is repeatedly used with minor correcting changes that enhance the ability of the process and not the process itself. The Human mind on the other hand has the inept tendency of standardizing things, activities and processes so that they can be replicated with lesser effort. But when the underlying assumptions and rules of a set process change, the result is an emotional response of aversion towards the stimulus of change.

Thus Innovation leads to change in the standardized adopted process and is always associated with the factor of change and managing this change effectively is crucial for success.

Considering the high stakes and the level of involvement that firms are witnessing and showing in current crisis a firm needs to have a calculated approach towards innovation and must look at various aspects of innovation, align it with its needs and possible consequences. The article shares some aspects that a firm should consider and evaluate when it comes to innovation.

Need for Collaboration: Stand alone Innovation is of no use unless it is implemented to achieve the value it has the potential to create. Before a firm goes for innovating within itself, it should explore the opportunity of collaborating with other firms who may have similar innovations available. This is important as in tough times optimal usage of resources and capital is crucial for survival.

Maintaining Rationality in experimentation:

Innovation calls for experimentation with set rules and guidelines. It is important to understand that experimenting with rules and procedures may not always lead to innovation and productivity. A firm must constantly measure the direction and magnitude of innovation with the purpose of innovation. Failure to commit resources to the right innovation efforts may lead to huge loss of capital.

Alignment between Innovation and Need: In tough times “need” is the rule and only things that are based on “needs” survive, the rest just vanish. Before going for innovation the firm must identify the NEED first and then move in the direction of catering to the need. The traditional approach of creating a need if it does not exist may not work in challenging economic times as the only thing that drives business in tough times is the need that is urgent or the one which brings immediate results to the business.

Ensuring Optimal Use of Innovation: Innovation if not put to use is like a NON Performing asset which has the potential to generate value but is not able to. So for firms which successfully innovate, and create value for users, using the innovation to produce results within the business is crucial.

Managing and Enduring Change: Innovation is always associated with change, and humans have an inherent aversion towards change. For a firm to actually achieve the result of productivity improvement , managing change is crucial as this change will require additional commitment of resources to make it enduring with respect to employee acceptance. Failure to adopt the change will lead to further loss of investment.

When to STOP Innovating: A firm should know when to stop innovating and start replicating. Innovation without replication is incomplete and a firm can benefit from innovation only after it replicates the learning gained from innovation. A constant innovation cycle may not always help. Innovation in a process that is replicated many times over will always lead to increased productivity.

Vishal Shukla

Information Technology Management

December’08