Win with Advanced Business Analytics: Creating Business Value from Your Data

WHAT IS INNOVATION?

After the financial crisis in 2008, the majority of companies were seeking new ways to get back to profitability. Innovation was seen as a key way to make this happen. Innovation is the creation of better or more effective services, technologies, products, processes, or ideas that are accepted by markets, governments, and society at large. Roy Luebke’s article titled “Peter Drucker on Innovation,” from the blog Innovation Excellence, underscored that Drucker identified seven sources of opportunity that will ultimately drive innovation:

1. The organization’s own unexpected successes and failures, and also those of the competition.

2. Incongruities, especially those in a process, such as production, distribution, or incongruities in customer behavior.

3. Process needs.

4. Changes in industry and market structures.

5. Changes in demographics.

6. Changes in meaning and perception.

7. New knowledge.2

Oftentimes, there is confusion about the difference between innovation and creativity. To be clear, creativity is about coming up with great ideas, whereas innovation is about bringing those creative ideas to life through execution and converting the ideas into a successful business. In the book The Other Side of Innovation, Dartmouth professor Vijay Govindarajan outlines very convincingly that an organization’s capacity for innovation is its creativity multiplied by its execution. Research on Fortune 500 companies found that organizations believe their companies ...