What is the relationship between failure and innovation in a firm?
Some innovative developments come after failures. Some of them come as a result of the knowledge learned by making mistakes. While most innovative developments require good planning and research, some spontaneously emerge due to circumstances.
How can the sources of innovations be classified?
Currently, there are studies that group different innovation sources in various ways. The 7 most widely used sources are suggested by Drucker (2002). Four of Drucker’s innovation sources are obtained from the firm’s own or sectoral resources, the other three are obtained from the environment. These sources can be listed as unexpected occurrences, incongruities, process needs, industry and market change, demographic changes, changes in perception, and new knowledge.
What are the factors important to innovate in a firm regardless of the innovations' sources?
Regardless of its source, communication between business departments is important to innovate. Also, the culture of the firm is decisive in the use of sources. The firms need creative people to use their sources innovatively. Regardless of the source of innovation, the capacity to use the opportunity is related to the innovation culture of the firm, and the human resources who can think innovatively.
What are the inside sources of innovations?
We can divide the inside sources into four groups. These are unexpected occurrences, incongruities, innovation based on process needs and industry and market change sources.
How do you describe the unexpected occurrences as a source of innovation?
Unexpected occurrences refer to an unexpected success, failure, or an unexpected external event. Unexpected occurrences as a source of innovation are the ability to use the information obtained as a result of the success and failure of the firm. Unexpected successes or failures can be considered an important resource in finding innovation opportunities. Many firms do not tend to transform the results of their success or failure into innovation. However, every hint of success and failure brings the firm one step closer to innovation.
Can you give an example of an innovation as a result of a failure?
Famous Kellogs corn flake is a new product story that comes after a failure. Back in 1894 Dr. John Harvey Kellog and Will Keith Kellog were working at the Battle Creek Sanitarium. The patients were on a strict diet at that time, especially coffee. Instead of coffee, they planned to offer patients a substitute made of granola. Will had left some boiled wheat that got stale by the time he had returned, and instead of throwing it away, he put it through rollers to try and make wheat sheets, but he got flakes in the process! This step produced the first form of corn flakes. As can be seen in this example, the source of innovation can come from an unexpected place.
How do you define the inside sources of innovations?
The sources in the company itself or its sector are called inside sources.
What are the most common example of incongruities?
The most common example of incongruities is the gap between what firms think and what customers expect.
What is the relationship between innovativeness and operational processes in a firm?
The operational processes of firms should be analyzed not only for efficiency and productivity but also for improvements and innovation. In some cases, firms do not feel the need to look over because their processes work. However, firms should always overhaul their processes. In this way, the operational processes of the firms will be more flexible. Improving processes will also provide the company with a competitive advantage by identifying potential innovation opportunities.
How does an emerging market effect innovation?
Newly formed markets are open to change and innovation. The emergence of a new market or the radical change of a market brings important innovations. For example, this is the story of Google’s birth. Google has caused a radical change since its launch and shaped the search engine market. Before Google, search engines weren’t very popular. In a very innovative move, Google presented all the information on the internet to users. In this way, it both shaped the market and took its place among the most valuable companies in the world.
What are the outside sources of innovations?
These sources are demographic changes, changes in perception, mood and meaning, and new knowledge.
Can you give an example about how income rate may effect the firms' decisions about the areas of innovation?
For example, with the rapid development of China’s economy in recent years, its per capita income has also increased. This changed the variety of products demanded in the Chinese market. Now, the number of people demanding luxury products in China is more than in many countries in the world.
How do demographic changes affect innovation?
Any change in the population, for example in terms of average age, dependency ratios, life expectancy, family structures, birth rates etc. means demographic changes which is one of the most important variables for firms. Firms need to take the demographic structure into account while analyzing their markets. One of the best ways to understand future market trends is to follow the demographic variables of the market. Most of the improvements or changes in the company’s production processes are designed according to potential future changes. Therefore, it is important to follow the demographic change.
What does a company's corporate reputation cover?
A company’s corporate reputation is the sum of all the views, perceptions and beliefs held about the company based on its history and its prospects in comparison to close competitors.
What is the major reason that foster the changes more than ever nowadays?
Over the years, there have been significant changes in the way people perceive the world. These changes are happening faster than ever due to the power of social networks today. People can change their perception of a particular product, brand, or industry overnight.
What are the driving forces of charges in public perceptions?
Perceptions can change over time. Public perception changes due to cultural changes, globalization, and scientific developments. For example, the negative health effects of carbonated drinks, tobacco, or sugar were previously unknown to the public. But now, people know more about healthy eating and are demanding more. There may even be changes in the laws over time. For example, products that are harmful to health can be advertised only on certain channels.
What is the most important reason for firms' investment in research and development?
Companies allocate a significant part of their income to research and development expenses today. The most important reason for this is to obtain new information.
What are the customer-oriented strategies?
The strategies, based on the requirements and expectations of the customers, are called customer-oriented strategies. Companies that make innovation by following this strategy include customers in the processes. If companies involve the customers in the process while determining their innovation strategies, they will achieve successful innovation management.
Can you give an example about how a company's effort to have their consumers involved in the processes help its innovation?
Haier is a leading Chinese manufacturer of white goods such as freezers and stoves. While observing its customers, the firm found that they used Haier washing machines to wash the vegetables they had grown in their garden. Turning this unexpected use into a new application, the Haier development team came up with a new wash cycle designed specifically for vegetables.
How does a supplier help a firm's innovativeness?
Suppliers and distributors can also provide information that includes key opportunities for innovation. For example, improvements made by suppliers in the materials can be a source for some innovations related to the product or service that the business will produce.