Category: #commerceinnovation

Some theories about Innovation that I frequently use

Posted on by Mariona Luis Tomás

I write here some references to theories about Innovation that seem relevant to me, not for historical reasons, but because I use each of these theories depending on the context in which I find myself, and all of them are current and make sense to me.

  • Schumpeter’s theory of innovation: Economist Joseph Schumpeter proposed the concept of “creative destruction”, where innovation, particularly in the form of entrepreneurial activities, drives economic growth by replacing old industries and technologies with new ones. He highlighted the role of entrepreneurs as key drivers of innovation.
  • Diffusion of innovations theory: developed by Everett Rogers, this theory explores how innovations spread through society. It classifies individuals into groups based on their willingness to adopt new innovations, including innovators, early adopters, early majority, late majority, and laggards.
  • Open innovation: Coined by Henry Chesbrough, this theory challenges the traditional model of closed innovation by emphasizing the importance of collaboration and knowledge sharing with external partners, such as customers, suppliers and research institutions, to drive innovation.
  • Resource-based view (RBV): This theory, often applied in the context of business and strategy, suggests that a company’s unique resources and capabilities are essential for sustained competitive advantage and innovation. Innovations arise from the effective use of internal resources.

Innovation types and their relevance in determined industries

Posted on by Mariona Luis Tomás

Though Oslo Manual only identifies four types of innovation (product, process, organization and commercialization) here are several types of innovation, each with its relevance to various industries. Understanding these types of innovation can help organizations identify opportunities to drive change and stay competitive.

Here are some key types of innovation and their relevance to different industries:
– Product innovation involves developing new or improved products or services. It’s highly relevant to industries such as technology, consumer electronics, pharmaceuticals, and consumer goods. For example, companies like Apple continuously introduce new versions of their smartphones and laptops, showcasing product innovation.
– Process innovation focuses on improving internal processes and operations. It’s crucial in manufacturing, logistics, and industries where efficiency and cost reduction are paramount. Automotive manufacturers, for instance, have implemented robotic automation and lean manufacturing techniques for process innovation.
– Service innovation pertains to creating new or improved services and customer experiences. It’s significant in sectors like hospitality, healthcare, and financial services. Companies like Airbnb disrupted the hospitality industry by introducing a new platform for travelers to find unique accommodations, showcasing service innovation.
– Business model innovation involves rethinking how a company creates, delivers, and captures value. It’s critical in industries facing disruption or seeking new revenue streams. Netflix transformed the entertainment industry with its subscription-based streaming model, an example of business model innovation.
– Marketing innovation focuses on how products or services are promoted and delivered to customers. It’s vital in the advertising, media, and retail sectors. Social media platforms like Facebook and Instagram have introduced innovative advertising and targeting techniques, driving marketing innovation.
– Organizational innovation relates to changes in an organization’s structure, culture, or management practices. It’s relevant in all industries but particularly critical in traditional or bureaucratic organizations looking to foster agility and adaptability. Startups often embrace flat hierarchies and flexible work cultures as forms of organizational innovation.
– Technological innovation involves the development of new technologies or the application of existing ones in novel ways. It’s highly relevant in industries like information technology, healthcare, and energy. Tesla’s advancements in electric vehicle technology are a prime example of technological innovation within the automotive industry.
– Social innovation addresses societal challenges and seeks to improve the well-being of communities and individuals. It’s important in nonprofit organizations, public sector initiatives, and socially responsible businesses. Microfinance institutions that provide financial services to underserved populations represent a form of social innovation.
– Sustainability innovation focuses on reducing environmental impacts and promoting sustainable practices. It’s crucial in industries with significant environmental footprints, such as agriculture, energy, and construction. Companies in the renewable energy sector, like solar and wind power providers, exemplify sustainability innovation.
– Cultural innovation involves the creation of new cultural norms, trends, and expressions. It’s relevant in creative industries like fashion, entertainment, and art. Designers and artists who introduce new styles and trends contribute to cultural innovation.

Understanding these types of innovation and their relevance to different industries helps organizations tailor their innovation strategies to align with their specific goals and challenges. Successful innovation often involves a combination of these types to address various aspects of a business or industry.

Innovation: New ways to provide value to customers

Posted on by Mariona Luis Tomás

The challenge of defining innovation is a problem that often comes up and that I like to revisit from time to time since, how could I support my clients effectively if we have different ideas about what innovation is?

I try to answer this question by sharing a common vision of what innovation is and what it is not before starting to work on it, this way my clients and collaborators and I can move in the same direction and use the same parameters to work.

Some “classic” definitions (the most used, the most referenced) of the term “Innovation” could be the following:

Innovation is the “Systematic use, as an opportunity, of changes in society, the economy, demographics and technology.” (Peter F. Drucker, 1985)

Innovation is a “New, or significantly improved, product (good or service), process, marketing method, or organizational method, in the company’s internal practices, workplace organization, or external relations.” (Oslo Manual, reference publication on Innovation of the OECD and the European Union, 2005)

Innovation is the “Activity whose result is the obtaining of new products or processes, or substantially significant improvements to existing ones.” (UNE 166000 Standard, “Terminology and definitions of R&D&I activities”)

Innovation is “New ways of offering value to the customer” (O’Hare, 1988)

Innovation is “creation or modification of a product, and its introduction into a market.” (Real academy of the Spanish language)

If we look at these definitions of innovation, we can see that they all have the following parameters in common:

The sense of newness. An innovation implies some new way of doing things, there is a sense of something new in the concept.

The process vision. It is not a moment of inspiration, a brilliant idea, but a systematic approach to identifying and implementing ideas.

Orientation towards marketing. If the market does not buy, we are not innovating. There has to be someone willing to “pay” for this new way of doing things.

The simplest definition that we have seen that fits with the practical and results-oriented approach is: Innovation is New Ways of Systematically Delivering Value to the Customer. This definition brings together the sense of novelty (new forms), the process vision (systematically offering) and the marketing orientation (customer value).

Some more nuances, to be oriented:

About what innovation IS:

  • “New” doesn’t mean no one has done it before. If it has not been done before in this context, then it is considered new.
  • It must have the clear purpose of solving a problem, satisfying a need or satisfying a desire.
  • Innovation is in doing, not just in thinking or conceptualization. Simply having the idea does not constitute an innovation.

About what innovation is NOT:

  • Small adjustments and improvements to an existing process are not the same as innovation.
  • Invention, which becomes innovation when it is successfully brought to the market.
  • Technology. Not all innovation involves technology, either as a facilitator or as a result. The use of new technology does not necessarily mean that innovation has occurred.
  • Creativity: Creativity is having a great idea. Innovation is about EXECUTING the idea.

Thinking about an organization’s strategy starting from its purpose.

Posted on by Mariona Luis Tomás

In recent years, I have participated in defining the strategy of various organizations: an audiovisual cluster, a chemical cluster, a research institute, a public company, different businesses… and recently also an engineering college.

I was thinking about what I could share regarding the definition of the strategy of organizations that do not depend on a single person, the owner, the executive, or the entrepreneur, but rather on a collective.

One of the elements to consider in defining the strategy of these types of organizations is the importance of the narrative: in my view, building a strategy shared by the collective involves carefully listening to the different elements of the collective and putting words to the organization’s song, crafting a story about what the organization is and what it aspires to be, and what its role is towards the collective and society as a whole.

In this same line, once we have the organization’s narrative, its song, it is fundamental to identify its purpose, which is the reason why it must continue operating in its environment, what society and the planet would lose if the organization disappears. The purpose, to me, is more about the organization’s life meaning, it is the organization itself that defines it, and it is not the same as the organization’s mission, which is the meaning given to the organization by the elements that constitute it. In the end, it’s about observing what life gives you to offer what life asks of you, and the purpose would have to do with what life asks of you.

The traditional structure of strategic planning includes an internal analysis (who we are, what we want, with whom we can have it, and how) and an external analysis (political, economic, social, technological, ecological, and legal factors that affect or can affect the organization’s activity, among others). These internal and external analyses are usually summarized in a SWOT diagram (Strengths, Weaknesses, Opportunities, Threats) of the organization, and from there the mission, vision, and objectives of the organization for the next period, usually about 3-4 years, are defined.

In a highly changing environment like the one in which organizations usually operate, one might think that it makes less and less sense to define and specify what the organization will do in the next 3-4 years, since in most sectors the level of change is too high to maintain the same organizational trajectory for so long. In my experience, it makes a lot of sense to do the internal and external analysis and detailed definition of the purpose, mission, vision, objectives, and other elements at least once every 10-12 years because this contributes to creating a narrative about who the organization is and what it wants to do, as a general approach, and to reach consensus among the different agents on this approach.

However, once this is done, it can be observed that the purpose of the organization is practically the only thing that does not change. That is why, as part of the strategy and thinking about shorter-term planning, I like to represent the organization’s business model canvas, how it is now, and the business model canvas of how it can evolve in the next period, to pull it in that direction. With this tool, one can organize and imagine where the organization can evolve and establish objectives and key expected results that lead the organization to be what it is called to be.

Doing an annual review of the canvas and a proposal of what should change constitutes a short-term strategic planning model that I believe allows organizations to adapt much better to the intrinsic instability of the times we live in. The simplicity of the model makes it much easier to convey what is important for the next period to all involved, allowing them to align much better with the organization and pull together in unison in the same direction.

An online course on innovation management

Posted on by MLT-gestion-web

The first project that arrived in this new stage is a request from MIA University, an online university based in Barcelona, and there are a total of 12 30-minute videos on innovation management.

It may seem like a lot of time, a lot of content, something difficult to design and execute. It had been a long time since I organized my knowledge and experience in innovation management to tell it to someone else, so I decided to broaden the focus and not only talk about the innovation management process, but also include other topics such as innovation culture, organization of collaboration, the scaling of innovations implemented in lean mode, reflections on ethics and sustainability of innovation and the identification of innovation trends of interest to organizations.

The result is a fairly complete course that starts from the following description:
Innovation is the lifeblood of successful organizations in today’s rapidly evolving business landscape. This comprehensive Innovation Management course equips students with the knowledge, skills and strategies necessary to drive innovation within their organizations.

The objectives of the course are:
● Understand the fundamentals of innovation
● Develop innovation strategy and planning.
● Manage the innovation process
● Perform Innovation Knowledge Management
● Implement innovation metrics and performance measurement.
● Create a culture favorable to innovation
● Understand open innovation and collaboration
● Think about the implementation and scaling up of innovation
● Carry out ethical and sustainable innovation
● Know future trends in innovation

Managing innovation goes far beyond the diagnosis process, innovation plan, project management, knowledge management. It talks much more about people and attitudes than about tools and technology (although it also talks about tools and technology!). And he increasingly talks and will talk more about reflection, ethics, sustainability and foresight, which is the ability to look to the future and identify impact innovations to build the world we would like it to be.

Innovation Management Process

Posted on by InnoBalears

Many people think that innovating only has to do with inspiration, creativity and good ideas. But Innovation has a lot more to do with hard work, systematization, and ability to implement the good ideas that anyone can have.

With this in mind, we can define and implement in almost any organization an innovation management process, that identifies subprocesses that involve all the organization staff.

The first subprocess of innovation mamagement process is Current situation analysis, this is, try to think about the organization innovation level within its sector (this would be the “innovation degree”) and its attitude towards innovation (this would be the “innovation capacity”).

Once this thinking process has started, it is time to identify and priorityze the innovation projects that will improve the company situation in innovation degree and capacity.

The third step in this process is to find ways for project financing, and this ways can go through public funds, risk capital, banks, private capital and so on. Every way is worth a look.

Next, comes project execution, and you can read my october article “Innovation project management” for further information. This is about clearly defining, executing and closing projects implementation.

The project implementation can lead to some results that you might want to protect through intellectual property rights in order to guarantee the income of your investigation. How do you protect each type of result is what you have to think next.

Finally, we have the last step of letting others know how we play in our organization, this is, Innovation Difusion subprocess. The fact is that our stakeholders want to hear that the organization fights for a better society, and as Rosenberg says the results for society have now to do with force, capital and techology.

All these subprocesses make no sense if they do not come supported by a clear, simple and effective knowledge management process, that will let you know the current situation of your organization, what projects make more sense in this current situation, how can you finance them, who can execute them, how can you protect them and what story do you have to tell about them.

The Innovation Management process is not that complicated, is it?

Innovation project Management

Posted on by InnoBalears

As far as I have experienced, Innovation cannot be successful without being structured as a Project. Companies can develop their day-to-day activities in a fuctional way, this is, each department just doing their job and a manager that integrates the activity of all these departments.

But innovation projects (which are, as I already commented in some other article, the ones that are going to guarantee the market position of the company in a long-term basis)must be structured as projects.

A project can be defined as a group of activities developed in a concrete period of time using several resources and oriented to get determined objectives and results.

There is a lot of Project Management bibliography, but when we talk about small projects there are three phases one has to consider:

DEFINITION AND PLANNING PHASE, oriented to clearly define the objectives of the project and the results expected (which are not usually the same: a project can be “develop a new service”, and results expected could be “enter a new market segment” or “increase sales”), the deliverables that will generate the project, the management structure, the project team and the project planning, once a business case has proved that the project makes sense for our organization.

PROJECT CONTROL AND FOLLOW-UP PHASE, mainly including activities like risk and problem management, change management, documentation management and (last but no least) financing and economical management.

CLOSING PHASE, basically oriented to analyse the project profitability, to prepare knowledge transfer and to evaluate the performance of people in the project.

Common sense is key for project success (just like for any other business activity), but it is amazing the amount of innovation projects launched by companies without a business plan to support them. Let’s start by planning and a lot of money and emotional pain will be avoided!

Topic of the week: The Innovation Process

Posted on by InnoBalears

Lately I’ve had some meetings where a well-situated bussiness man asked me what is really Innovation and how could we talk about Innovation in a tangible way. Innovation is a process. Innovation is an attitude.

To make it tangible, let’s talk about the process. The Innovation process starts with a diagnosis of current situation, any bussiness manager can do this (and does it systematically) on his or her business, this is, staying aware on what happens around my company, how do my competitors move, what techology can make my bussiness easier. To systematyze this process one can subscribe to a good periodical review on the sector, assist to determined events, listen to any provider that comes up with new ideas, support consultants pressure to buy the new bussiness aplication (and buy it if it is really worthy), etc.

Next step is to develop once a year (at least), and according with the analysis performed, a list of innovation projects that could make sense for my company, and characterize them in a developed-enough way so that one can have an idea of how much (more or less) should they cost and how worthy they are for the bussiness. With these criteria on mind one can prioritize the list developed.

The third step includes projects financing, this is, getting the resources that will guarantee projects implementation in the right way. There are several institutions that lend money to develop projects and determined governments give financing facilities, but never lose of mind that the most important risk and the work is for the bussiness manager. This point, financing, might change the initial priorityzation made in our list of projects, as depending on public policies one may be able to finance project number 3 in our list…

Until this point we haven’t actually started to work on the project, we just have thought of it! Now it is when Project Management process starts with its steps of Design, Implementation, and Testing and all the substeps that the concrete project needs, until it is completely implemented and working on the actual environment.

But the Innovation Management process includes two more steps, which are as important as the ones already presented and which are normally ignored by many companies, that do not take the benefits of them. The questions one answers with these two steps are:
1) How do I protect the results of the project? Maybe you don’t want or you can’t protect them in the traditional patent way, but with a confidentiality contract or simply keeping the secret you are already defining the Innovation Project Protection Policy for your company. There are many ways of maintaing the competitive advantage derived of the project, you just have to find which one is good for you.
2) How do I let my customers know that I am working for them and contributing to the development of knowledge in the world with the development of these projects? This is the last step of the innovation process: difusion. Maybe the innovation process developed doesn’t have a direct impact on customers, but sure they are willing to know that every day you work to improve what you do.

I think that if you look at Innovation as a process you can think of tangible results: if you can’t think of them you might not have innovating attitude, which is the basis to survive as a company in this world of today. We will see how to get innovating attitude some other time.

Topic of the week – Dream Society

Posted on by InnoBalears

Basing on a comment heard from one of the most important investigators in Spain I discovered Rolf Jensen and his Dream Society. The comment was a question: how are the touristic sectors innovating? Traditionally, in industrial sectors, innovation is the result of more or less clever ideas perfectioned by hours of problem solving. It’s about things, so it’s more or less easy: just a matter of time.

What happens in touristic sectors? The type of product we have is about people’s feelings, their emotions, so it is not a matter of time any more, it is about creating new emotions, at that precise moment, through not so direct means (no mahines, no screw-drivers, no computers neither schemas, only people interacting at last).

I read something about Dream Society and my friend Bel Llodrà gave me the reference on Rolf Jensen (www.dreamcompany.dk), the ideologist. I thought I had discovered the panazea of what I had thought till that moment, the maximum component. I read the articles coming up the web page and I read The Dream Society (1999), the book.

The main thesis Jensen presents is that people historically have passed through several phases of needs coverance: hunters and gatherers, agriculture implementation, industrial revolution, society information. What is next, he says (and I agree), is the Dream society, the society where people will be ready to pay more for an emotion than for a determined technology asset. Jensen describes many examples, but one of the most clear to me is the one that speaks of watches: currently all watches are ready to perform perfectly their function in an accurate mode, but one can find a wide variety of prices to perform the same function (tell you what time it is).

He applies this theory to marketing areas, and here we get to the point: industrial revolution or information society have had an enormous impact in the world, and I think the impact Jensen describes is not the impact of a world-wide dimension (as the other historical changes were).

I think the impact of the Dream Society (maybe we should call it the emotion society) will be world-wide, and people will be willing to pay less for technology and more for feelings and emotions than they have ever been. Technology is suppoused to go through, and, from some time ago on, people will want to hear the story behind.

Let’s apply this vision on tourism. We have seen a big change on tourism demands in the last years that has had a big impact on traditional mass tourism destinations. Now that we have realised that what people want to buy are emotions, we will have to change the operations side of the business in order to provide emotions. This is (for example):

  • Telling stories instead of presenting products in the marketing side
  • Asking what type of emotion is the customer feeling when he or she gets our service
  • Changing the satisfaction survey questions (if you look at them you will realise thay are all about functionality (is it clean?), not about feelings (how did you feel when you got in the room: dark?, sad?, nervous?, happy?,…)
  • Training the company people in order to be able to tell stories themselves about who the company is

I think this would be a good beginning for a lasting and loving customer- company relationship and an excellent way to identify and understand how can touristic companies innovate to improve their competition position in the market.