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The 12 Different Ways for Companies to Innovate

The 12 Different Ways for Companies to Innovate. MIT-Sloan Review Dec 2006. What exactly is innovation?. Product and Technological Innovation:

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The 12 Different Ways for Companies to Innovate

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  1. The 12 Different Ways forCompanies to Innovate MIT-Sloan Review Dec 2006

  2. What exactly is innovation? Product and Technological Innovation: • Best practices get copied, encouraged by benchmarking. Consequently, companies within an industry tend to pursue the same customers with similar offerings • Thus, viewing innovation too narrowly blinds companies to opportunities

  3. Business Innovation • Business Innovation’ is far broader in scope than product or technological innovation • Business Innovation is About New Value, Not New Things. • Innovation is relevant only if it creates value for customers — and therefore for the firm.

  4. How good is the Innovation • Customers are the ones who decide the worth of an innovation by voting with their wallets. • It makes no difference how innovative a company thinks it is. • What matters is whether customers will pay.

  5. Systematic Business Innovation • Business Innovation Comes in Many Flavors. Innovation can take place on any dimension of a business system. • Business Innovation is Systemic. Successful business innovation requires the careful consideration of all aspects of a business.

  6. A 360-Degree View

  7. Traditions and Innovation • Traditionally, most firms’ innovation strategies are the result of: • simple inertia (“this is what we’ve always innovated on”) or • industry convention (“this is how everyone innovates”).

  8. Innovating Along Dimensions • Innovating along one dimension often influences choices with respect to other dimensions. • Brand innovation, for example, might require concurrent innovations along the dimensions of • customer experience, • offerings and • presence.

  9. Approach and Communication • As such, selecting and acting on dimensions that define a firm’s innovation strategy requires: • a deliberate, portfolio-based approach that • must be communicated clearly within the company • as well as to external constituents.

  10. Ultimately, the innovation radar could guide the way companies manage the increasingly complex business systems through which they add value, enabling innovation beyond products and technologies.

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