Complete Sports traditionally focused on products for team sports, such as soccer, football, baseball, etc. They have decided to expand into the camping marketplace, but understand they will face stiff competition. Complete Sports tackles this by (1) developing a new, reasonably priced, style of tent-one that can be suspended above the ground, and (2) creating a new marketing strategy for these tents though a variety of non-profit organizations, such as Boy Scouts and Girl Scouts.These are examples of process and product innovations. Define each of these types of innovation. Then identify and explain each of the seven components of an innovation system.

Question

What will be an ideal response?

Answer 1

Product innovation is the introduction of a good or service that is new or has significantly improved characteristics or intended uses; a process innovation refers to the implementation of a new or significantly improved production or delivery method. Evidence from firm innovation surveys suggests that the share of firms with a product or process innovation varies significantly across countries and that firms often adopt mixed modes of innovation, meaning that they combine product and process innovations.

Research and practice have identified seven components of an innovation system: innovation strategy; committed leadership; innovative culture and climate; required structure and processes; necessary human capital; human resource policies, practices, and procedures; and appropriate resources.

Create an Innovation Strategy:  Many companies fail in their improvement efforts because they lack an innovation strategy. An innovation strategy, which amounts to a plan for being more innovative, requires a company to integrate its innovation activities into its business strategies. This integration encourages management to invest resources in innovation and generates employee commitment to innovation across the organization.  

Commitment from Senior Leaders: One of the biggest lessons we have learned from our consulting experience is that the achievement of strategic goals is unlikely without real commitment from senior leaders.

Foster an Innovative Culture and Climate: A recent survey by the Boston Consulting Group identified risk-averse culture as the key obstacle to innovation. Academic research also supports the conclusion that an innovative culture and climate are associated with the creation of new ideas and products. These findings reflect the fact that innovation requires experimentation, failure, and risk taking, and these are all aspects of an organization's culture. Many senior leaders understand this link.

Required Structure and Processes: Organizational structure and internal processes can promote innovation if they foster collaboration, cross-functional communication, and agility.

Develop the Necessary Human Capital: We defined human capital in Chapter 14 as the productive potential of an individual's knowledge and actions: a person factor in the Organizing Framework. Research has identified several employee characteristics that can help organizations innovate. For example, innovation has been positively associated with the individual characteristics associated with creativity, creative-thinking skills, intrinsic motivation, the quality of the relationship between managers and employees, and international work experience.

Human Resource Policies, Practices, and Procedures: Human resource policies, practices, and procedures need to be consistent with and reinforce the other six components of an innovation system. Companies that know this are more likely to be innovative and to have higher financial performance.

Appropriate Resources: Organizations need to put their money where their mouths are. If managers want innovation, they must dedicate resources to its development. Resources can include people, dollars, time, energy, knowledge, and focus.