In the past few years, innovation has become a business buzzword. Simply put, innovation is the process of coming up with something new and useful. The main difference between innovation and invention is the customer acceptance of the product and service. In invention, the goal is newness while in innovation, usefulness.
Innovation has 2 kinds: incremental and disruptive innovation. Incremental is slow development just like how cellphones have developed over the years. At first, it only has 2 major features: call and sms. As years went by, it added a camera, internet, then became a small computer to be used as a work station. While disruptive is behavior-changing. Disruptive happens when there is a new technology involved; such is the case of the Internet. When the Internet came, it paved way for faster and more efficient communication. It changed how we do banking and commerce.
In my definition of innovation there are 3 important words: process, useful and new. This is the lens by which we are going to approach this article.
Process. Every successful innovation goes through research to find areas where innovation can happen. Also in the process is synergizing the creativity and energy of the individuals within the organization.
New. Every successful innovation must be an improvement therefore it has to be new. New can be the market or the companies process.
Useful. There has to be mass acceptance in order for the innovation to be successful.
Innovation can be applied both in small or big businesses.
An example of a small business innovation is that of what some Ramen bars did to their products: they turned their products into ready to cook frozen goods. That is an example of innovation because they offered a different experience to the customers. They were also able to reach a different market by partnering with distributors and logistics companies.
For large companies, what comes to my mind is that of Cebu Pacific. Before they came to the market PAL was dominating the Filipino market but Cebu Pac’s fare innovation made them a serious threat to PAL. Because of their innovation, more Filipinos are able to fly and experience going to other countries.
Innovation goes beyond creativity and design; it is a careful study, and research into target customers, so that something new can be offered.
Innovation & Entrepreneurship by Drucker