Are innovation departments a thing of the past?

Innovation evolution

Dealing with change and continuous improvement requires a revolving innovation cycle. How you approach the rise of innovation is crucial to the success and even the survival probability of a business. Customers lay down the law when it comes to products and services; a dominant factor that should weigh with your innovation processes. In what setup could you best unlock innovation?

Companies and organisations have been improving their businesses for hundreds of years, trying to gain an advantage on their competitors. More importantly, most of them succeed in servicing their customers better and finding innovative ways to add value. Companies that can’t cope with the changing environment will always fall in decline and cease to exist. Conclusion: innovation is the only way to go if you want your company to remain healthy.

Survival in R&D mode

The creation process of new products and services has changed a lot over the years. Following the industrial revolution, individuals were grasped by the technological possibilities and started their own companies based on what they invented. Most of the car manufacturers have humble roots; once a mechanic started to build a car in his own small shed. When companies identified that new products and services were vital for their survival, they institutionalised their innovation into R&D departments channelling their improvement efforts. Along the way,  the technology and the environment needs became more complex. A laboratory and knowledge accessibility were key in the development of new products. With the advent of the information technology this started to change.

information technology

Innovation in the information and technology age

Today access to information is easy and anyone can use information technology to alter their vision of the future into a viable concept or product. Because the number of people engaged upon innovation is much bigger, chances are that someone will develop a disruptive innovation that will conquer your market. When that hits you, will you know where it is coming from? No, people develop in their own niche and suddenly go on a growth spree driven by social media. So the question is, can you still use innovation departments to develop new products and services?

The answer is twofold.  Often you can and in some cases you must. The (information) technology hiding under the cover of our devices becomes more complicated every year and the same holds true for production processes of food and medicine. Advanced developments require extensive knowledge of the field, laboratories to create, test prototypes, proof of concepts, and most of all perseverance. Finding and developing practical applications for fundamental research takes time and resources and finds a comfortable home in an innovation department. Remember though, that this type of innovation is mostly inward out. Researchers look at products, production processes and advances in science and think of how they can improve.

In the end the customer decides what they want from your company, or another company when you can’t deliver. And if they cannot find a proper solution to their need, they may even create something new themselves. So on the other hand you do need a different approach to innovation: outward in.

Voice of the customers

Voice of the customers as innovation engine

You can empower innovation and make it easier when you use existing building blocks and everyone – including your own customers – can make use of it. Knowledge of customer needs and problems is essential in innovating your products and services. Customer facing staff is therefore paramount in helping your innovation efforts. Why not give them the means to experiment with new products and services if they encounter enterprising customers who want to help you improve your services?

How you organise innovation depends on your business, business drivers and customer expectations. If your business involves translating fundamental research into tangible products, then you need a physical innovation department to manage your efforts. But why not create a virtual innovation platform in all other cases where you can bundle creativity, customer knowledge and staff passionate to innovate your products and services?

 

Arjen van Berkum is columnist, motivator, bon vivant, innovation fan and visiting lecturer at Delft University of Technology (TU Delft). He is founder and Managing Director of Betula Services. At Betula Services they believe in co-creating the best possible value chain. They have the answer to complex issues surrounding Resource Management, driven by innovation, leadership, HR processes and performance management. By making you successful Betula Services gradually phases themselves out - the result of co-creation.