Innovation Improves Profitability for NJ Manufacturers
Economist Joseph Schumpeter believed entrepreneurs and technological innovation were the root causes of economic growth. He coined the phrase “creative destruction” to describe how a capitalist economy grows. New products and technologies destroy their predecessors and result in the overall growth of the economy.
Corporate growth depends on the innovative capacity within a company. This measures the level of invention and the potential for innovation in an organization. Innovation is based on factors such as entrepreneurship, research & development and strategic partnerships. An innovative environment created by management must support these functions.
Importance of Systematic and Systemic Innovation
Systematic innovation methodically analyzes and solves problems focused on identifying the right problem to be solved, then coming up with a solution without being prevented from taking the most productive steps. Structured innovation reduces risk and increases the likelihood of success.
Innovation should be systemic as well. Complex interactions of many different people, organizations and environments foster innovation and growth. Systemic innovation is important because ideas are now hybridized from a variety of different sources. The results are new and better products.
Systematic Innovation Reduces Risk
Most people can understand how innovation improves operations, but they do not understand how risk is reduced. There are many ways systematic innovation reduces risk:
- Systematic innovation aligns innovation to strategic goals. A clear strategic goal and documented scope provides a framework for innovators, increasing their chance of success.
- It affirms that executives are committed to innovation. They help build an environment that supports innovation by providing resources, funding and interest in projects. Resources are not wasted on products near the end of its life-cycle.
- Employees are formally trained in the “language of innovation.” They are given the tools and techniques to reduce risk and be successful.
- Systematic innovation reduces risk by understanding customer wants and needs. Identifying and validating new needs and creating ideas based on these needs greatly reduce the risk of failure.
Seven Qualities of Innovative Companies
- Innovative companies have a process in place to create new products and services. At its core the company promotes entrepreneurship and creative thinking.
- They understand business is accelerating. The time to market and production process will need to speed for a company to be competitive.
- Management should strive to create an open leadership environment The world of business too complex for a few people to have all the answers.
- The world as we know it has actually become smaller as a result of the Internet. Innovative companies use it to compete on a broader stage.
- Connectivity is one of the biggest drivers of innovation, as information is exchanged on almost a real time basis.
- Information systems should be set up to deliver critical data as fast as possible.
- A trained, educated workforce is critical to innovation management. As technology improves the cost of education will continue to decrease as on-line education becomes more convenient and less expensive.
Become more Innovation through the Destination Innovation Management System (DIMS)®
Innovation management is critical to the growth of your company. A systematic approach to innovation will help your business grow and compete in today’s marketplace.
The Destination Innovation Management System (DIMS)® is an exclusive program created by NJMEP in conjunction with other MEP centers in order to provide U.S. manufacturers with a systematic and sustainable approach towards a continuous generation of new products, marketing concepts, and/or process improvements