Ways of becoming an Innovative Organisation

• Kaizen (or continuous improvement) is a policy of implementing small, incremental changes in order to achieve innovation, better quality and/or increase efficiency
• Kaizen relies on small steps rather than significant changes which tend to happen with R&D
• Kaizen uses everyday ideas on innovation from ordinary workers rather than major technological change
• Kaizen focuses on methods rather than outcomes
• Kaizen employs the talents of the workforce rather than using expensive consultants
• Four ways of becoming an innovative business

  • kaizen
  • research and development
  • intrapreneurship
  • bench marking
• Research and development is the scientific investigation necessary to discover new products or manufacture new processes, and the procedures necessary to ensure that these new products and processes are suited to the needs of the market
• R&D helps to develop new products
• R&D allows unique ideas to be protected and therefore companies benefit as they have monopoly power usually for 20 years
• R&D lets new inventions and patents help businesses to achieve on a large scale
• R&D that improves production processes can lead to higher profit margins
• R&D can improve the reliability and durability of a product
• R&D can excite and motivate the workforce
• Intrapreneurship is acting like an entrepreneur within a large organisation
• Intrapreneurship occurs when business encourages its employees to demonstrate these traits within the working environment
• The biggest difference between intrapreneurship and entrepreneurship is the rewards of intrapreneurship tend to go to the business rather than the intrapreneur
• Intrapreneurship is expensive for businesses
• Intrapreneurship allows for:

  • support from senior managers
  • excellent two way communication
  • an innovative working environment
  • rewards
  • ownership of projects
• Benchmarking is the process of setting competitive standards, based on the achievements of other firms, against which a business will monitor its progress
• The benchmarking firm tends to focus on the companies that are best in its industry, but for specific functions a company might compare itself with firms in other industries
• Benchmarking

  • select the process or activities to be benchmarked
  • identify the firm that is best in class, against which to benchmark
  • gather data from both firms and analyse performance gaps
  • establish a reason for these gaps and set targets for improvement
  • agree and implement new strategies and review the results
  • continue the process, it should be a neverending process
• Benefits of benchmarking to enhance innovation

  • a business can see what is possible to achieve
  • data from other firms can provide ideas and inspiration
  • it can identify areas where the business is not keeping pace
  • cost advantages can be achieved through innovation and more efficient methods and reduced waste can improve competitiveness